Source: PANews
In this year of 2024, which is full of challenges and opportunities, the cryptocurrency market has experienced ups and downs. At the end of the year, the Chopping Block program invited four industry Dragonfly managing partners Haseeb Qureshi, Dragonfly general partner Tom Schmidt, Superstate CEO Robert Leshner, and Robot Ventures managing partner Tarun Chitra to review the key moments of the year. PANews has compiled the text for this podcast.
Biggest Winner
Haseeb:
I think the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform conducted the most successful token airdrop of the season, which can be called the Uniswap moment of this cycle. Although there is still a long way to go in terms of true decentralization, its token distribution method and community response are exciting. As a VC, we really regret not being able to get involved - in fact, almost every VC tried to invest in HyperLiquid, but they were all declined. This kind of "perfectly born" project is truly impressive, especially in terms of product capabilities, execution and technical delivery.
Robert: “From my perspective, the biggest winners this year are all the cryptocurrency founders and companies in the United States. We have witnessed an important turning point: from the extreme hostility and resistance we faced before, to the benefits we are seeing now. Situation. As an American cryptocurrency founder, this change is exciting and I no longer have to worry about pursuing a cryptocurrency career in the United States.”
Tarun: "I want to choose the entire DeFi (decentralized finance) industry. Do you remember the 36-month bear market predicted by Degen Spartan before? DeFi was once regarded as a problem child in the cryptocurrency world, and the valuation of public chains has not yet been implemented. But it is often ten times that of DeFi projects. But now, DeFi has made a strong comeback. As a person who works hard in the DeFi industry, it is really gratifying to see such development. ”
Tom：
My choice may be a little surprising – it’s Tether (USDT). They've had a great year and are arguably one of the most profitable companies in the world. For years, many people have been waiting for Tether to collapse or have major problems, but instead it has become more and more successful and more standardized. Not only does Tether continue to grow, it has become an important case study for the cryptocurrency industry, especially in terms of stablecoin adoption and the global dollarization trend.
Biggest loser
Robert：
There is no doubt that the anti-crypto camp is the biggest loser this year, including some members of both houses of Congress and some people in the executive branch, especially some members of the SEC and those pushing for "Operation Disconnect 2.0." They mistakenly believed that cracking down on the cryptocurrency industry would advance their political careers, but it turned out to be a completely unsuccessful strategy. I hope this changes the political landscape in the future so that political suppression of cryptocurrencies is no longer a viable political tool.
Tarun：
I would say the biggest losers this year are the numerous second-tier Layer 2 projects and application chains. At the beginning of 2023, the market generally believed that thousands of L2 projects would emerge, and each L2 technology stack would derive a large number of application chains for specific purposes. But reality proved that this idea was completely wrong. Just look at the continued turmoil in the Cosmos ecosystem. Previously, people thought that successful applications like Blur could launch their own application chain or L2, such as Blast, but the actual effect was not ideal. Instead, we see users tending to focus on a handful of top-level L2 projects.
Haseeb:
I think financial nihilism is the biggest loser this year. In the first half of this year, the view that everything in cryptocurrency was a meme coin and that all technology was meaningless was prevalent. But the reality is that the proportion of meme coin trading volume in total trading volume has dropped significantly from 20-30% in the early days to 10% or even lower now. The market has shown more enthusiasm and confidence in real technological innovation and substantive progress. If you think all technology is worthless, you're really going to be a big loser this year.
Tom：
I would say the biggest losers are those who abandoned crypto and switched to artificial intelligence this year. It's a classic case of game over and we're back. When asset prices fall, investors leave, developers switch careers, and market sentiment becomes extremely negative, cryptocurrencies always come back in different ways. I personally know a lot of people who have either sold out of cryptocurrencies, closed their companies, or moved on to other industries. It's a shame because in this industry you really need a strong belief to succeed. Those who lacked this belief and turned to AI may now be regretting it.
The biggest surprise
Tarun：
Without a doubt, the two projects that surprised me the most this year were Pump.fun and BonkBot. I remember we discussed Pump.fun on the show in January and February this year. At that time, it was just starting out and provided users with an innovative way to create assets. I don’t think meme coins would have grown as fast as they did without Pump.fun. The other is BonkBot, a Telegram bot that specializes in meme coin trading. In terms of revenue, BonkBot is the hidden champion. Like Pump.fun, both companies achieved $100 million in revenue in their first year. The pace at which memecoin infrastructure is developing has truly amazed me.
Tom：
The surprise I want to share is twofold. First there was the launch of World Liberty Financial, it’s truly mind-boggling that a presidential candidate would be associated with a DeFi token and Trump still holds the wallet. But even more surprising was its sales performance. It stands to reason that ordinary meme coins or NFTs can be sold out in a short period of time, but this DeFi token related to the president has only sold 25%, and sales continue to decline. Both of these points were far beyond my expectations.
Also, I would like to add something to the point Tarun mentioned. I predicted back in early 2024 that the application layer would generate significant revenue. Such as Photon, Banana Gun and even Uniswap, these applications have generated hundreds of millions of dollars in revenue, surpassing most DeFi protocols. While I didn’t predict memecoin infrastructure specifically, applications did perform well, outpacing many protocols in revenue and profitability.
Haseeb:
My two biggest surprises are: First, the rise of the “Tap to Earn” model is surprising, although there is almost no news now. For example, the game Hamster Combat even attracted the attention of the military in Iran. Secondly, there have been no major cryptocurrency security incidents (L1/DeFi) this year, indicating a significant improvement in industry security. Although TVL (total locked volume) has recovered significantly, we are not seeing the huge losses seen in previous years, which is a positive sign.
Robert：
What I would add are changes at the infrastructure level. The rise of Solana and Base as memecoin infrastructure has been surprising. Due to their low transaction fees and convenient token issuance mechanisms, these two platforms have performed well in terms of new user activity, and their adoption speed and scale have exceeded expectations.
Best new mechanic
Tom：
I think it would have to be the Pump's binding curve and LP locking mechanism. I'm excited to be the first to speak because I have a feeling this will be a popular choice.
Robert：
I think the best mechanism is the "revenue amplification" model, which can be seen in many stablecoin projects such as Ethena and Usual. Its core is to distribute the income generated by a certain underlying asset (which can be any asset such as arbitrage trading, government bonds, etc.) to only a part of the users, thereby significantly amplifying the rate of return. For example, if the annualized rate of return of the underlying strategy is 5%, and only a quarter of the users participate in the allocation, the actual rate of return obtained by these users will be amplified to 20%. This mechanism has played an important role in the development of Ethena, and I believe we will see more projects adopt similar mechanisms in the coming months.
Tarun：
From my perspective, there are two standout mechanical innovations this year. The first is the liquidity guidance mechanism of meme coins; the second is innovations related to basis trading, especially Market Maker Lending Pools. This kind of lending pool can be traced back to the GLP pool launched by GMX at the end of 2021, and now it has developed into the Jupiter JLP pool on Solana and HyperLiquid's HLP pool.
The innovation of this mechanism is that it solves a key problem of decentralized exchanges: in centralized exchanges, exchanges can directly provide mortgage loans to market makers, while decentralized exchanges previously lacked similar mechanisms. Through these lending pools, users seeking income can deposit assets into the pool, and perpetual contract traders can borrow these assets to make markets and pay fees to deposit users. This has greatly improved the capital efficiency of decentralized perpetual contract trading, and is one of the important reasons why the current decentralized perpetual contract trading volume has reached a record high.
It is worth mentioning that the rapid development of projects like HyperLiquid is largely due to this lending pool mechanism. Jupiter's JLP pool currently reaches $15 billion, and these infrastructures provide important support for on-chain basis trading. While decentralized perpetual contract trading may never fully match the capital efficiency of centralized exchanges, this mechanism does significantly narrow the gap.
Haseeb:
This is indeed an important innovation. So in terms of exactly how these lending pools operate, like a JLP or an HLP, is there a specific third party that operates it?
Tarun ：
This depends on the specific project. Liquidity provision like GMX is programmatic, with target weights determined by governance or multi-sig. In HyperLiquid's HLP, the project team directly manages the strategy. JLP and GLP are similar to AMMs (Automated Market Makers) and anyone can perform arbitrage operations. The key is that this mechanism effectively connects LP users who want to gain profits and traders who need funds to make markets.
Best Memes
Haseeb:
My vote goes to Justin Sun’s birthday photo. You may recall that this entrepreneur, who has attracted much attention in our industry and is said to be well-liked by his employees, posted a photo on his birthday. The photo is obviously AI-generated because he actually has 14 fingers in the photo. This was probably the most embarrassing moment for one of the crypto industry’s most successful entrepreneurs, but the meme really stuck with me and I think I’ll remember it for a long time.
Robert ：
While this may not technically be a typical meme, I'm going to give the best meme to the Pudgy Penguins. Maybe it’s because they just launched the PENGU token, which opened at a fully diluted valuation of $5 billion. Although I do not hold any Pudgy Penguins or $PENGU tokens, I have to acknowledge their achievements: continuing to build in a bear market, turning an ordinary meme into a huge success through continuous promotion and deep operation. Now they have launched peripheral products such as penguin dolls and meme coins, and the community is booming.
Tarun ：
I'm going to choose Bonk. Mainly because BonkBot was a genius piece of marketing that helped Bonk grow from near zero to billions of dollars in market capitalization within a year. If you want to say that the most successful "blue chip" meme coin in the Solana ecosystem is Bonk.
Tom ：
It’s a really hard choice, but I’d like to nominate Hugo Martingale, the Polymarket intern who runs a fantastic Twitter account. Their content is novel and interesting, and they often have witty remarks in the comment area. They are a very high-quality account.
Haseeb:
I'm glad to see that not everyone is opting for meme coins. To be honest, we may have discussed too many meme currency topics this year, and I hope there will be less meme currency related topics next year.
Best/Worst Transformation
Robert ：
I'm going to combine the awards for "Best Transformation" and "Best Recovery Story" and give them to MicroStrategy. Even though their decision to transform from a mediocre business intelligence software company into a Bitcoin leveraged ETF was made five years ago. , but 2024 is the year when this transformation is truly recognized by the market. Not only did they break through the historical highs during the dot-com bubble, they also created an amazing business model: by issuing convertible bonds, they traded in Bitcoin. Obtain funds at a higher premium and then continue to purchase Bitcoin, forming a sustainable capital cycle mechanism.
Tarun ：
I would like to nominate Babylon Protocol. While their transformation technically begins in 2023, it won’t actually come to fruition until 2024. Babylon initially only provided Bitcoin timestamp services for the Cosmos chain. Later, they developed "remote pledge" technology, allowing users to use Bitcoin as collateral for pledge. Now their TVL (total locked value) has reached 6 billion USD. Moving from a single timestamp service to a business of this scale is one of the most successful business model transformations I have ever seen.
Tom ：
I’m going to nominate the “worst transition” of the Democratic Party. From Trump’s incident at Mar-a-Lago, to Biden’s executive statement on digital assets, to Kamala’s vague stance on cryptocurrency investment, The whole process seems very chaotic. In contrast, Trump has adopted a simple and direct strategy of saying what people want to hear and doing what people want, such as "releasing Ross". The Democratic Party's performance on this issue is like It's just as disappointing to shoot two inches in front of the goal and miss it completely.
Haseeb:
The best transition I choose is the transition of the NFT community to meme coins. For example, Miladys launched CULT tokens, and Pudgy Penguins launched PENGU. The market value of these meme coins even exceeds the original NFT project. Interestingly, this transformation has not attracted opposition from the community, and no one has accused them of turning away from NFTs. While these tokens appear to have little practical use, this transformation strategy has been surprisingly successful. This may be related to the choice of public chain. Many high-quality NFT projects are on Ethereum, while meme coins are more developed on Solana. This natural friction may explain why this transformation came relatively late.
Tom ：
Interestingly, we have found that in the cryptocurrency industry, sometimes simple “vibe coins” are more popular than tokens that try to create serious value. This seems to prove a truth: when issuing new tokens , no need to overcomplicate it, people prefer to have multiple simple tokens rather than one complex conversion mechanism.
Most disappointing project
Tom：
I think it’s a rebranding plan for MakerDAO to become Sky. The most obvious evidence of this failure is that even after the reinvention, people still called it Maker rather than Sky. While DAI remains huge against USDS, they are said to be considering undoing this rebranding, which is clearly an unnecessary and ineffective decision.
Haseeb:
I choose the Bitcoin L2 project as the biggest failure. At the beginning of the year, the market had high hopes for Bitcoin L2, which was expected to reach billions of dollars in TVL, believing that the Bitcoin ecosystem would embrace DeFi. But the reality is that even if multiple projects come online, they have all become "ghost towns." There is almost no discussion about these projects, and it is rare to hear the founders express plans to launch projects on Bitcoin L2.
Additionally, Celebrity Coins were a major failure. There was a time when people thought celebrity tokens would be better than regular meme coins because they were endorsed by celebrities. For example, $MOTHER falls into this category. But these are essentially social tokens, and they have performed extremely poorly over time. The market initially thought this would be a huge opportunity, but now it seems that this expectation has been completely dashed.
Robert：
I would nominate Friend.tech and the demise of the Social Fi craze that it sparked. Earlier this year, Friend.tech was once considered the hottest startup project in the encryption industry, but its development cycle was extremely short-lived. From the initial idea to being highly sought after, to the launch of V2 version and Friend token, it quickly fell silent. Now that the value of the product and token is almost zero, this may be one of the rare projects that truly self-destructs. While projects like Farcaster are still developing, the entire crypto-social industry faces significant challenges.
The best counterattack story of 2024
Tom：
I’m going to nominate Coinbase. Coinbase often becomes the market's "punching bag" when cryptocurrency prices fall. They are making thousands of layoffs in 2023 and many think they may go out of business. But with the launch of the Bitcoin ETF, Coinbase has gained new development opportunities as the custodian of the ETF. Their overseas business, although not particularly outstanding, is growing steadily. Additionally, they secured a stay in their lawsuit with the SEC, arguably setting up a series of important wins in 2024. It’s worth noting that this is the second year in a row that Coinbase has been named the best recovery story, and this “double recovery” is truly impressive.
Haseeb:
I would nominate Magic Eden. They were once considered a "second-tier" NFT trading platform after OpenSea and Blur. But by entering the Bitcoin ecosystem, especially in terms of BRC-20 tokens and Ordinals, they have achieved amazing transaction volumes. It also performs quite well in the Solana ecosystem. Recently they also launched platform tokens, which can be said to have achieved a perfect transformation.
Robert：
In addition to MicroStrategy, which I mentioned earlier, I would also nominate the entire Bitcoin ETF ecosystem. After years of rejection and failure, this year finally came my breakthrough. The success of the Bitcoin ETF paved the way for the Ethereum ETF thanks to Grayscale’s lawsuit against the SEC and victory. The performance of these ETF products has been quite outstanding and can be regarded as a model of resurrection from "death". While some might argue that this is more of a "winner" than a "recovery" story, institutions like BlackRock have certainly shown strength in the process.
Tarun：
I choose the Move Ecosystem as the best recovery story. Sui's market capitalization has reached US$50 billion, Movement's start-up capital exceeded US$5 billion, and many DeFi protocols have also been launched on these public chains. In the third and fourth quarter of 2023, when Solana received a lot of attention, the Move ecosystem seemed to be ignored. But now they have clearly achieved a strong recovery by improving user experience and optimizing other functions.
Moderator: From these cases, we can see that in the cryptocurrency market, even projects that have experienced troughs may achieve a strong recovery as long as they have the correct strategic positioning and execution. This also reflects the industry's resilience and innovation capabilities.
2025 Forecast
Haseeb:
I have three predictions. First, Bitcoin will hit $150,000 before a correction; second, DeFi tokens will usher in explosive growth; third, AI-related token prices will rise sharply, but the actual applications of the underlying protocols may be relatively limited.
Robert：
I am more bullish on Bitcoin, predicting $180,000 but no sharp pullback. Secondly, I think the United States will announce specific legislation for cryptocurrency for the first time, which will be an important milestone for the industry. Finally, I predict there will be an AI crypto scam event that attracts media attention.
Tarun：
My predictions mainly focus on three aspects. First of all, there will be a wave of integration in the application chain and L2 track, and we may see multiple merger cases, mainly due to high operating costs and concentration of transaction volume. Secondly, the total market value of AI agent-related tokens will grow at least 5 times, significantly increasing from the current US$10 billion. Finally, Solana’s inflation rate will be revised downward by at least 25%.
Tom：
I also have three predictions. First, money games like Farcaster or Buttons will go mainstream, becoming viral on platforms like TikTok. Second, there will be new crypto-asset ETFs approved, but they may be relatively traditional currencies such as XRP or Litecoin, rather than the emerging assets that the crypto community is looking forward to. Third, we may see a major application-level security incident, possibly stemming from a supply chain attack or a library vulnerability.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: (PANews)
Original author: Unchained
『2024 Crypto Market Review! Big names in the currency circle argue: Who is the biggest winner and what to expect in 2025" This article was first published in "Crypto City"
