Author: a16z Research Team
Compiled by: Deep Tide TechFlow
Editor's Note: a16z has published a 'Major Ideas' list based on its partners' opinions in AI, U.S. dynamics, bio/health, cryptocurrency, enterprise, fintech, gaming, infrastructure, and more, highlighting themes that technology developers may focus on in the coming year. Below are some key points that excite the a16z cryptocurrency team. For a look at policy, regulation, and more for 2025, see this piece from November 2024.
AI needs to have its own wallets for autonomous actions.
As AIs evolve from NPCs (non-player characters) to protagonists, they will begin to act as agents. However, until recently, AIs were not truly capable of autonomously engaging in market activities such as exchanging value, revealing preferences, and coordinating resources.
We have already seen that AI agents (like @truth_terminal) can trade using cryptocurrencies, opening doors to various creative content opportunities. But AI agents have even greater potential, not only to realize human intentions but to become independent network participants. As AI agent networks begin to manage their own crypto wallets, signature keys, and crypto assets, new interesting use cases will emerge. For example, an AI could operate or verify nodes in decentralized physical infrastructure networks (DePIN), such as assisting distributed energy. Other use cases include AI agents becoming truly high-value players in games. Ultimately, we may even see the first blockchain owned and operated by artificial intelligence.
Introducing 'Decentralized Autonomous Chatbots'
In addition to AI having wallets, there is an AI chatbot operating in a Trusted Execution Environment (TEE). TEEs provide an isolated environment for securely executing applications, allowing for safer distributed system designs. In this case, the TEE is used to prove that the bot is autonomous and not under human control.
Further extending this, the next big idea here is Decentralized Autonomous Chatbots (DACs). Such chatbots can build followings by posting engaging content, whether entertaining or informative. It will build followings on decentralized social media; generate income from the audience in various ways; and manage its assets in cryptocurrency. The relevant keys will be managed by the TEE running the chatbot software—meaning no one can access these keys except for that software.
As potential risks increase, regulatory measures may need to be introduced. But the key lies in decentralization: operating on a permissionless node set and coordinated by consensus protocols, chatbots could even become the first truly autonomous billion-dollar entities.
As more people use AI, we will need unique forms of authentication.
In a world filled with online impersonation, scams, multiple identities, deepfakes, and other realistic yet deceptive AI-generated content, we need 'proof of humanity'—to help us verify that we are interacting with actual people. However, the new problem here is not fake content; it is the ability to produce this content at a lower cost. AI has significantly reduced the marginal cost of producing content that contains all the cues we use to judge whether something is 'real.'
Therefore, there is now a greater need than ever for a method to digitally and privately link content with people. 'Proof of humanity' is an essential component of establishing digital identity. But here, it becomes a mechanism for increasing the marginal cost of attacking an individual or compromising network integrity: obtaining a unique ID is free for humans but expensive and difficult for AI.
This is why the 'uniqueness' property of privacy protection is the next big idea in building networks we can trust. It solves not just proof of humanity but fundamentally alters the cost structure of attacks by malicious actors. Thus, the 'uniqueness property'—or Sybil resistance—is an indispensable attribute of any proof of humanity system.
From prediction markets to more efficient information aggregation.
In 2024, prediction markets will become the focus due to the U.S. elections, but as an economist studying market design, I do not believe that prediction markets themselves will bring revolutionary changes in 2025. Instead, prediction markets pave the way for technology-based distributed information aggregation mechanisms that can be applied across various fields, from community governance and sensor networks to finance.
The past year has proven this concept, but it is essential to note that prediction markets themselves are not always ideal for information aggregation: even for global 'macro' events, they may not be reliable enough; for more 'micro' issues, the prediction pool may be too small to provide meaningful information. However, researchers and technologists have developed many incentive frameworks over the years that encourage people to share their knowledge authentically in different informational environments—from data pricing and purchasing mechanisms to 'Bayesian truth serum' for obtaining subjective assessments—many of which have already been applied in crypto projects.
Blockchain has always been an ideal choice for implementing these mechanisms—not only because of its decentralized nature but also because it can facilitate open and auditable incentive schemes. Importantly, blockchain also makes results public, allowing everyone to interpret these results in real-time.
Businesses will gradually adopt stablecoin payments.
Stablecoins have found market fit in the past year, which is not surprising given that they are the most economical way to send dollars, enabling rapid global payments. Stablecoins also provide entrepreneurs with an easier platform to develop new payment products: no intermediaries, minimum balances, or proprietary SDKs. However, large enterprises have yet to realize the significant cost savings and new profit margins achievable through the adoption of these payment methods.
While we see some businesses showing interest in stablecoins (and early adoption in peer-to-peer payments), I anticipate a larger wave of experimentation in 2025. Small and medium-sized enterprises with strong brands, established customer bases, and facing high payment costs—such as restaurants, cafes, convenience stores—will be the first to shift from credit card payments to stablecoins. Due to face-to-face transactions, they do not benefit from credit card fraud protection and are also most affected by transaction fees (a 30-cent fee on a cup of coffee can significantly hit profits!).
We should also expect larger enterprises to shift towards using stablecoins. If stablecoins can accelerate the development of banking services, then businesses will attempt to disintermediate payment providers and directly add 2% profit to their bottom line. Companies will also begin seeking new solutions to tackle problems currently addressed by credit card companies, such as fraud protection and identity verification.
Countries are exploring onboarding government bonds onto the blockchain.
Onboarding government bonds onto the blockchain will create a government-backed, interest-earning digital asset while avoiding the surveillance issues brought by Central Bank Digital Currencies (CBDCs). These products can provide new collateral demand sources for lending and derivatives protocols in decentralized finance (DeFi), further enhancing the integrity and stability of these ecosystems.
Therefore, as governments worldwide further explore the advantages and efficiencies of public, permissionless, and irreversible blockchains this year to support innovation, some countries may experiment with issuing on-chain government bonds. For example, the UK has explored digital securities through its financial regulatory body, the FCA (Financial Conduct Authority) sandbox project; its Treasury has also expressed intentions to issue digital bonds.
In the U.S., as the SEC will require the settlement of government bonds through traditional, cumbersome, and expensive infrastructure next year, there is expected to be more discussion on how blockchain can improve the transparency, efficiency, and participation of bond trading.
We will witness the widespread application of 'DUNA' in the U.S. blockchain network.
In 2024, Wyoming passed a new law officially recognizing Decentralized Autonomous Organizations (DAOs) as legal entities. DUNA, or 'Decentralized Unincorporated Nonprofit Association', is specifically designed to facilitate decentralized governance of blockchain networks and is currently the only viable structure for U.S. projects. By incorporating DUNA into the decentralized legal entity structure, crypto projects and other decentralized communities can grant legal status to their DAOs, thereby promoting greater economic activity while protecting token holders from legal liability and managing tax and compliance requirements.
DAOs are communities that manage transactions on open blockchain networks, and they are necessary tools to ensure that networks remain open, non-discriminatory, and do not extract value unfairly. DUNA is capable of unlocking the potential of DAOs, and multiple projects are actively implementing this structure. With the U.S. planning to promote and accelerate the development of its crypto ecosystem in 2025, I expect DUNA to become the standard for U.S. projects. We also expect other states to adopt similar structures (Wyoming took the lead in this step; they were also the first to adopt the now widely used Limited Liability Company (LLC))... especially as other decentralized applications outside of crypto (like physical infrastructure/energy grids) begin to emerge.
Liquid democracy moves from online to offline.
With the increasing dissatisfaction with existing governance and voting systems, now is a good time to experiment with new technology-supported governance models—both online and in the real world. I have previously written about how DAOs and other decentralized communities enable us to conduct large-scale studies of political systems, behaviors, and rapidly evolving governance experiments. But what if we can apply these learnings to real-world governance through blockchain?
We can leverage blockchain for secure, private election voting, starting with low-risk pilot projects to reduce cybersecurity and audit concerns. But more importantly, blockchain can also allow us to experiment with 'liquid democracy' at the local level—where people can vote directly on issues or delegate their votes. This concept was initially proposed by Lewis Carroll (the author of Alice in Wonderland and a researcher of voting systems), but it has not been practical for large-scale applications... until now. Recent advancements in computing and connectivity technologies, along with the development of blockchain technology, make new forms of representative democracy possible. Crypto projects have already been applying this concept, generating a wealth of data on how these systems work—see the results of our recent research—that local governments and communities can draw from.
Reusing infrastructure will become a trend.
Last year, many teams continuously experimented with innovations in the blockchain technology stack—developing new sets of validators, consensus protocol implementations, execution engines, programming languages, RPC APIs. These innovations sometimes improved specific functionalities but often fell short in broader or fundamental capabilities. Take the dedicated programming language for SNARKs as an example: while an ideal implementation might enable ideal developers to generate more efficient SNARKs, in practice, it may fall short compared to general-purpose languages in compiler optimization, developer tools, online learning resources, AI programming support, etc.—and could even lead to suboptimal SNARKs.
Therefore, I expect that in 2025, more teams will leverage others' contributions, reusing more off-the-shelf blockchain infrastructure components—from consensus protocols and existing collateral to proof systems. This approach will not only save developers significant time and effort but also allow them to focus on enhancing the unique value of their products/services.
The infrastructure is now mature enough to support the development of web3 products and services suitable for prime time. Like other industries, these products and services will be built by teams that can successfully navigate complex supply chains, rather than those that scoff at 'non-original' solutions.
Crypto companies will start from user experience rather than letting the infrastructure dictate user experience.
Despite the diversity and appeal of blockchain technology infrastructure, many crypto companies do not actively choose their infrastructure; rather, the infrastructure to some extent chooses them, thereby influencing user experience (UX). This is because the technical choices at the infrastructure layer directly determine the user experience of blockchain products or services.
However, I believe the industry will overcome this conceptual barrier: it is not technology that should dictate the final user experience, but rather the user experience that should drive the choice of the appropriate technology. In 2025, more crypto product designers will start from their expected user experience and then choose the corresponding infrastructure. Crypto startups will no longer need to overly rely on specific infrastructure decisions before finding product-market fit; they can genuinely focus on finding product-market fit.
We can abstract these choices into a holistic, full-stack, plug-and-play approach, rather than getting bogged down in specific Ethereum Improvement Proposals (EIPs), wallet providers, intent architectures, etc. The industry is ready: abundant programmable block space, mature developer tools, and chain abstractions are beginning to enable more people to design in the crypto field. Most technical users do not care about the language used by a product on a daily basis. The same is expected to start happening in the crypto space.
'Hiding technical details' will drive the killer applications of web3.
The technical advantages of blockchain make it unique, but they also hinder its mainstream applications. For creators and fans, blockchain offers opportunities for connection, ownership, and monetization. However, industry jargon (like 'NFTs', 'zkRollups', etc.) and complex designs pose barriers for those who would benefit the most. I have personally felt this in my conversations with executives in the media, music, and fashion industries who are interested in web3.
The mass adoption of many consumer technologies has followed this path: starting with technology, where some iconic companies or designers simplified complexities, leading to the emergence of breakthrough applications. Think of the origins of email—the SMTP protocol hidden behind the 'send' button; or credit cards, where most users today do not care about the technical details of payments. Similarly, Spotify revolutionized music not by showcasing file formats but by providing convenient playlists. As Nassim Taleb said, 'Overdesign leads to fragility; simplicity is what scales.'
Therefore, I believe our industry will adopt this concept in 2025: 'hiding technical details.' The best decentralized applications have already focused on more intuitive interfaces, making their operation as simple as clicking a button or swiping a card. In 2025, we will see more companies design simple and clear communications; successful products will not need explanation, as they will directly solve problems.
The crypto industry finally has its own app store and discovery mechanism.
When crypto applications are blocked by centralized platforms like the Apple App Store or Google Play, their user acquisition is limited. However, we are now seeing emerging app stores and marketplaces providing this distribution and discovery functionality without setting barriers. For example, Worldcoin's World App marketplace not only stores identity verification but also allows access to 'mini-apps,' bringing hundreds of thousands of users to multiple applications in just a few days. Another example is the fee-free dApp store for Solana mobile users. These examples show that hardware (like phones, devices) may be a key advantage for crypto app stores, just as Apple devices were crucial to the early app ecosystem.
At the same time, there are also other stores with thousands of decentralized applications and web3 developer tools across popular blockchain ecosystems (e.g., Alchemy); as well as blockchains serving as game publishing and distribution platforms (like Ronin). However, this is not limited to entertainment and gaming: if a product has already achieved distribution on certain channels (like messaging apps), it is challenging to transfer that onto the chain (exceptions: Telegram/TON network). The same situation applies to applications with significant web2 distribution. But we might see more such transitions in 2025.
Crypto holders will become active users.
In 2024, cryptocurrencies made significant progress as a political movement, with many policymakers and politicians expressing positive attitudes towards them. At the same time, it continues to develop as a financial movement (for example, how exchange-traded products (ETPs) for Bitcoin and Ethereum have expanded investor participation). By 2025, cryptocurrencies should further evolve into a computational movement. So where will the new users come from?
I believe it is now time to re-engage those currently 'passive' crypto holders and convert them into more active users. Currently, only 5-10% of crypto holders are actively using cryptocurrencies. We can bring the 617 million people who already own cryptocurrencies into the world of blockchain, especially as blockchain infrastructure continues to improve and user transaction fees decrease. This means new applications will continue to emerge for existing and new users. At the same time, early applications we have already seen, such as stablecoins, decentralized finance (DeFi), NFTs, gaming, social, decentralized infrastructure networks (DePIN), decentralized autonomous organizations (DAOs), and prediction markets, are also becoming more user-friendly for average users as communities pay more attention to user experience and other improvements.
Multiple industries may begin to tokenize 'alternative' assets.
As the infrastructure matures in the crypto industry and other emerging technologies, leading to cost reductions, the practice of tokenizing assets will be widely applied across various industries. This will allow assets that have been viewed as inaccessible due to high costs or lack of value recognition not only to achieve liquidity but, more importantly, to participate in the global economy. AI engines can also utilize this information as unique datasets.
Just as hydraulic fracturing technology unlocked oil reserves once thought to be inaccessible, tokenizing alternative assets could redefine revenue models in the digital age. Seemingly sci-fi scenarios thus become more possible: for instance, individuals could tokenize their biometric data and then lease this information to companies via smart contracts. We have already seen some early examples, such as decentralized science (DeSci) companies introducing more ownership, transparency, and consent in the collection of medical data through blockchain technology. We do not yet fully understand how such a future will unfold, but these advancements will enable people to leverage previously untapped assets in a decentralized manner instead of relying on governments and centralized intermediaries to provide these assets.
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