Author: Altan Tutar, CEO of Nuffle Labs, CoinDesk; Compiled by: Deng Tong, Jinse Finance
In the past year, the user base attracted by the crypto industry has grown exponentially, with monthly active addresses increasing from 70 million in 2023 to over 220 million in 2024, a twofold increase. With over 300 chains now live, the ecosystem should be able to cater to user needs sustainably and attract all types of users. However, within this vast ecosystem, much of the activity and liquidity is locked within multiple Ethereum Layer 2s.
In its current state, Ethereum resembles Europe in the early 1500s, a time when Europe experienced breakthroughs such as the printing press and advanced shipbuilding, enhancing resource management. Today, the thriving DeFi ecosystem on Ethereum is equipped with primitives like lending, staking, and re-staking. However, just as Europe faced challenges of resource scarcity and over-utilization, Ethereum also faces obstacles in making other assets work in its home (Layer 1).
As a result, the current blockchain ecosystem remains fragmented and frustrating. While chain abstraction has become a trend, and many projects have made progress, solutions like intent often involve sorters that favor large participants when filling orders between blockchains, leading to centralization. Moreover, no additional utility is created for users, as most solutions focus merely on exchanging assets.
Despite having an impressive technological foundation, we have created an environment where digital assets are restricted rather than empowered. Top blockchain resources like Ethereum are underutilized and constrained by strict architectural boundaries.
To achieve true interoperability by 2025, we must take a step back and re-examine blockchain modularity from a fresh perspective.
The Illusion of Modularity
The common analogy of comparing blockchains to 'LEGO bricks' oversimplifies the complex technological landscape. Unlike unified building blocks, blockchain components are complex systems with specific dependencies and intricate interoperability challenges.
Consider a practical scenario: transferring assets between different blockchain networks should be simple. However, the current solutions (like basic token swaps) offer very limited functionality. The technology requires a more nuanced and sophisticated approach.
Emerging technologies are changing this narrative. Advancements in universal messaging alternatives and transaction finality are creating a more organic and unified ecosystem. The ultimate goal is not just to connect different parts, but to create an infrastructure that allows different networks to collaborate easily.
2025: The Year of Utility and Accessibility
Looking ahead to 2025, I expect a dual approach to address the current and future fragmentation issues. To attract users and build a sustainable user base, infrastructure should be integrated into the background, allowing users to focus on the applications themselves without getting caught up in the technology behind them.
Currently, users are unable to optimally utilize their assets due to complex bridging solutions that hinder easy cross-chain asset transfers. Instead, we need to provide users with a way to maximize their returns while contributing to the ecosystem. This can be achieved by allowing token holders to freely transfer their assets from one chain to another without bridging, through solutions like re-staking. As re-staking expands beyond Ethereum to connect multiple Layer 1 and Layer 2 networks, this is an area of increasing interest for users.
Projects will focus on enhancing and interconnecting existing infrastructure rather than splitting the ecosystem with new, competitive blockchains. This approach will inject new life into currently dormant chains, driving activity and creating real value.
In addition to improving the underlying infrastructure, user experience will also be a focus. We will see applications seamlessly integrating blockchain capabilities, allowing users to interact with complex technologies without realizing their complexities. The infrastructure will become invisible—a powerful backend that supports a smooth frontend experience without technical friction.
Creating a Global Market
While 2024 marks a time of widespread acceptance in the industry, as evidenced by increased investment in assets like Bitcoin, true adoption requires an inclusive vision. We should not only build financial tools but also create a globally interconnected market where every asset can reach its maximum potential.
The future of blockchain is not about individual chains vying for dominance. It is about creating a collaborative, fluid infrastructure that empowers users to unlock their economic potential by building a future where currency and value operate seamlessly.
