Translation: Plain Language Blockchain
The blockchain world is heating up as we approach 2025! Institutional adoption is thriving, innovation is booming, and regulation is finally catching up. Meanwhile, the launch of spot Bitcoin ETFs has become a game-changer, restoring market liquidity and confidence.
Our R&D team analyzed the most influential developments of 2024, providing a comprehensive overview of how these trends shaped the industry. From the rise of liquid staking and Layer 2 solutions to the evolution of stablecoins and their increasingly important role in global finance, we will detail the key events paving the way for 2025.
TL;DR
2024 is a transformative year for blockchain, setting the stage for greater developments in 2025. Institutional adoption is soaring, regulatory clarity is improving, and groundbreaking innovations are reshaping the crypto space. Looking ahead, what trends will emerge in the blockchain world in 2025?
Bitcoin ETFs lead the trend: Spot Bitcoin ETFs have become major holders of Bitcoin, attracting institutional interest and redefining narratives in the financial sector.
Ethereum scalability upgrades: Layer 2 solutions and the Dencun upgrade are drastically reducing costs, with over 200 projects exploring zero-knowledge (ZK) rollups.
The liquid staking craze: Protocols like EigenLayer and Babylon are redefining network security and efficiency, with the Restaking ecosystem expected to grow rapidly.
Real assets on the blockchain: The tokenization of real estate, bonds, and commodities is accelerating, and the distance between traditional finance and cryptocurrency is diminishing.
The revival of Solana: Private financing reached new heights, user activity surged, and the Solana network solidified its market position through memecoin trading and NFT innovations.
The combination of AI and blockchain: The integration of AI and blockchain is revolutionizing user experiences in data integrity, decentralized computing, finance, and more.
Decentralized physical infrastructure and storage: Infrastructure solutions are addressing real-world needs, improving efficiency, security, and energy optimization.
Seamless cross-chain connectivity: Cross-chain interoperability has become the norm, with innovations like Particle Network simplifying blockchain interactions.
Decentralized finance revival: Ethereum fees drop, financial products are enhanced, and DeFi becomes more accessible, ushering in the next wave of decentralized finance.
Global regulatory progress: The EU, UK, and Asia-Pacific are formulating crypto-friendly regulatory policies, while the US looks forward to potential positive changes under new leadership.
2025 will be a year of transformation, but before looking ahead at future trends, we first want to showcase how this year has brought us to new heights.
1, The Journey of 2024: From Recovery to Innovation
2024 is a pivotal year for the crypto industry, laying the groundwork for new growth and innovation. Following the mid-2023 bull market, the January 2024 approval of spot Bitcoin ETFs became a watershed moment, restoring institutional confidence and market liquidity.
Let's dive into the key highlights that define this transformative year.
1) The impact of Bitcoin ETFs
The launch and rapid adoption of spot Bitcoin ETFs have become game-changers in 2024. These financial products made ETFs one of the largest holders of Bitcoin, collectively holding about 4.5% of the circulating supply. This surge in institutional interest further solidifies Bitcoin's reputation as a valuable and viable financial asset.
Notably, Bitcoin's growth has even sparked political discussions in the US, with some arguing that Bitcoin could help address the $35 trillion national debt. Although the actual feasibility of this proposal remains questionable due to the rapid accumulation of debt, it underscores Bitcoin's increasing influence in mainstream economic discourse.
2) Progress and challenges
In 2024, regulation received substantial upgrades, paving the way for institutional entry.
United States: With the anticipation of a new government in 2025, there is growing optimism in the market for more crypto-friendly policies, but 2024 itself laid an important foundation for this shift. Discussions are centered around strategic Bitcoin reserves and stablecoin regulations, with stablecoin issuers becoming key players in the US financial system. Holding $125 billion in government debt, they have become the 18th largest holder of US debt, underscoring the trend of digital assets increasingly merging with traditional financial systems.
EU and UK: The EU and UK are leading in the regulatory framework for stablecoins and staking services. These initiatives emphasize their commitment to fostering innovation while maintaining financial stability. This progress reinforces their leadership in providing a structured, business-friendly environment for the crypto market.
Despite significant progress, the industry still faces serious challenges, including scalability issues, liquidity exits from institutions, and fragmented global policies.
3) The rise of liquid staking and Restaking
In 2024, liquid staking and Restaking experienced unprecedented growth. Protocols like EigenLayer, Symbiotic, Karak, and Babylon enable validators to secure multiple networks simultaneously, enhancing both efficiency and security.
The Restaking ecosystem is rapidly expanding, with expectations of up to 400 AVS (Active Validator Services) by the end of 2025. However, many of these protocols are still in development and face key issues such as effective validator coordination and real user incentives that need further resolution.
4) Layer 2 solutions
Layer 2 solutions continue to thrive, providing scalable and efficient transaction processing for Ethereum. The Dencun upgrade has significantly reduced transaction costs, promoting the adoption of Layer 2.
However, the high costs generated by zero-knowledge proofs (ZK) have become a bottleneck, requiring innovative solutions to drive broader application. Currently, there are over 200 projects actively developing ZK technology, emphasizing its key role in blockchain scalability.
5) Ethereum: Staking goes mainstream
Since Ethereum's transition to Proof of Stake (PoS), the staking business has shown rapid growth:
Staking ETH: Increased from 14 million to 35 million, a growth of 2.5 times.
Validators: Increased from 400,000 to 1.1 million, growing by more than 2.5 times.
As the crypto industry matures, staking has become a key strategy for institutional investors. Currently, approximately 28.38% of Ethereum's total supply (34.2 million ETH) has been staked through 1.1 million on-chain validators.
Institutional staking participation reached new heights in 2024, with 70% of Ethereum-holding institutions staking. Notably, over half of them chose liquid staking solutions, reflecting an increasing demand for flexible and yield-generating opportunities.
6) Solana: The year of growth
Solana performed excellently in 2024! Private financing in the third quarter reached $173 million, with $103 million attracted in September alone. Major players like Hamilton Lane, Franklin Templeton, and BlackRock participated in Solana's tokenized assets.
Active addresses: Reached 7 million in November 2024, driven by the memecoin and NFT craze.
Low fees, high transaction volume: Transaction fees amounted to $260 million over six months, with an average transaction fee of just $0.02.
In 2024, activity on decentralized exchanges (DEX) surged, primarily driven by memecoin trading:
Q1 2024: Trading activity peaked.
Q4 2024: Activity rebounded.
Solana's stablecoin market cap: Reached $3.8 billion, ranking fifth among all blockchain networks.
Restaking is gaining attention in the Solana ecosystem:
Jito is about to launch its Restaking platform, currently with a total value locked (TVL) of $50 million, covering three types of LRT protocols.
Solayer has launched, with a TVL of approximately $390 million.
7) The Rise of Asia-Pacific
The Asia-Pacific region is becoming a cornerstone for crypto development, thanks to strong developer and investor communities. The blockchain adoption rate in the region has surged, with Solana accounting for 100 million of the 220 million active blockchain addresses globally in September 2024.
Projects in the region are often tailor-made for local preferences, making flexibility and market research key to success.
2, Investment landscape in 2024
In 2024, investment activity in the global crypto market increased significantly. The approval of spot Bitcoin and Ethereum ETFs provided much-needed liquidity to the market and restored market confidence. This fostered a close connection between the primary and secondary markets, driving investor participation.
In the first three quarters of 2024, funding trends reflect this revitalized optimism:
Q1 2024: Fundraising amount of $2.545 billion, a year-on-year increase of 0.76%.
Q2 2024: Investment amount rose to $2.75 billion, an increase of 8.05% from Q1.
Q3 2024: Funding slightly decreased to $2.406 billion, down 13% from Q2.
Despite these fluctuations, the market has shown resilience, achieving an annual growth rate of 26.05%. This indicates that while short-term volatility remains, long-term confidence is still strong.
1) Top venture capital firms
Leading venture capital firms in the crypto industry play a crucial role in supporting innovation. Heavyweights like a16z, Binance Labs, and Polychain are at the forefront by backing projects in emerging areas such as real-world assets (RWA), decentralized finance (DeFi), privacy protocols, and cross-chain interoperability.
These companies not only financially support projects but also actively drive innovation and influence industry direction. Their strategic investments have the potential to shape the trends we see in 2025, as they continue to identify and support the most promising technologies.
2) The fourth wave of Web3 innovation
The crypto industry is undergoing what is termed the fourth wave of Web3 innovation. The rise of non-EVM Memecoins, BRC20, AIGC, and RWA assets marks the arrival of this wave.
Widespread adoption of applications is progressing slowly, causing the main market to not yet reach the heights of Bitcoin's performance. The key to growth lies in identifying assets that can attract both investors and retail users, with retail users being the primary driving force for capital inflow.
The trading structure of the crypto investment market reveals several key trends:
More than 54.9% of institutions remain inactive, indicating a cautious approach amid market uncertainty.
Only 12% of projects successfully secured two rounds or more of funding, highlighting the challenges of obtaining ongoing financial support.
The average amount raised per funding round increased slightly by 0.62% (to $53,139) compared to 2023, reflecting a stagnation in capital inflow growth.
Despite these challenges, the main market exhibits a clear 'head effect', as most institutional investors choose to remain on the sidelines, waiting for clearer market signals or more innovative projects before making significant investments.
3) Key investment highlights
In 2024, there were 1,459 funding events in the crypto industry:
Round 1 funding: 1,283 projects.
Round 2 funding: 149 projects.
3 rounds or more of funding: 27 projects.
Compared to the period from 2021 to 2022, these numbers have decreased by 27.7% to 30%. However, compared to 2022 to 2023, this trend shows positive growth, with increases ranging from 7.6% to 86.3%.
The sectors that received the most funding are:
Infrastructure solutions: Raised over $4.2 billion.
Decentralized finance (DeFi): Attracted over $1.4 billion in investment.
4) Leading ecosystems and projects
Multiple blockchain ecosystems performed well in 2024:
Ethereum: Continues to dominate the market with a total of 2,562 active projects.
Solana: Strong recovery from the FTX collapse, currently hosting 823 projects.
Bitcoin ecosystem: Gained momentum with the emergence of 383 projects.
TON (Telegram Open Network): Showed growth, with 141 projects.
Base: As the fastest-growing Layer 2 solution, launched 428 projects, with a TVL of $3.6 billion.
These ecosystems reflect the diversity and evolving nature of blockchain development, with each ecosystem having its unique advantages and growth trajectories.
5) Notable funding rounds and trends
In 2024, several significant funding rounds highlighted investor confidence in the crypto industry:
Monad: Raised $225 million in April 2024, with a project valuation of $3 billion.
Celestia: Secured $100 million in funding through OTC in September 2024.
These large-scale investments highlight a trend: infrastructure projects and innovative blockchain solutions continue to attract significant capital.
3, Outlook for 2025
A survey conducted by CoinFund provides insight into ambitious plans of crypto companies for 2025. The survey shows that 70.5% of companies plan to raise funds, with 20.5% targeting over $25 million, indicating that the industry is entering a phase of building and expansion.
Key highlights:
Nearly 79.5% of companies plan to expand their teams, focusing on hiring product and engineering positions (88.6%), followed by business development and sales roles (82.9%).
Consumer applications, decentralized finance (DeFi), Web 3.0 adaptation, and real-world assets (RWA) are expected to lead the expansion of Web3 in 2025.
As many as 77.2% of founders believe that a groundbreaking application will be launched in the crypto industry in 2025, with the most attention focused on gaming, payments, and decentralized finance (DeFi).
This optimistic outlook highlights the year that Web3 is about to embrace, a year that could redefine the industry landscape through disruptive innovations and strategic expansions.
4, 12 Major Crypto Trends to Watch in 2025
The crypto world is developing rapidly, and keeping up with the latest trends is crucial for staying ahead. As 2025 approaches, our expert R&D team, led by Anna Petrenko, highlighted several exciting trends worth noting.
Although areas like Layer 2 solutions, GameFi, and NFTs may face challenges due to stagnation, other areas will see bright prospects. Let's explore the key areas that will shape next year's trends!
1) Bitcoin ecosystem: The rise of staking and liquid staking
Bitcoin remains the cornerstone of the crypto market, and its ecosystem continues to expand through pioneering advancements:
Bitcoin staking: The launch of the Babylon mainnet introduced Bitcoin staking, giving BTC holders the opportunity to earn additional returns. Although still in its early stages, the first Babylon rewards are expected in the first quarter of 2025.
Liquid staking: Emerging protocols enable BTC holders to participate in decentralized finance (DeFi) and connect with other blockchain networks.
While the Bitcoin staking space shows promising growth potential, many projects are still in development, indicating a significant potential in this field for 2025.
2) The integration of crypto and traditional finance: Fusion and integration
The line between traditional finance (TradFi) and decentralized finance (DeFi) is becoming blurred. More financial institutions are expected to incorporate crypto services by 2025, such as:
Crypto custody: Banks providing secure storage for digital assets.
Crypto-backed loans: Offering loans secured by crypto assets.
Staking services: Providing institutional-level staking services for institutional clients.
Visa and Mastercard have begun integrating crypto solutions, a trend that will accelerate development. This integration will make cryptocurrencies more convenient and seamlessly integrate into everyday financial activities.
3) Real-world assets: Unlocking real-world value
The tokenization of RWA is expected to become a dominant theme in 2025. Key drivers include:
Adoption increases: Traditional financial institutions are exploring blockchain solutions to tokenize real estate, bonds, and commodities.
Regulatory clarity: More refined regulation in major markets will attract institutional capital and enhance trust in RWA.
With growing interest from institutional investors and alignment with DeFi, RWA is expected to change the way real-world value is accessed and managed in the digital economy.
4) Fully Homomorphic Encryption (FHE): The future of confidential computing
FHE, as a groundbreaking trend in confidential computing, is gaining attention. This technology allows computations to be performed directly on encrypted data, ensuring:
Privacy: Data remains encrypted throughout the process.
Security: Sensitive information is never exposed.
Although similar to zero-knowledge proofs (zk), FHE offers unique features that are critical for the widespread adoption of encryption. In 2025, more FHE-based blockchain projects are expected to address real-world application scenarios and enhance privacy workflows.
5) Artificial Intelligence and Crypto: A Perfect Match
Artificial intelligence became a focal point in 2024, accounting for 35% of investments in US startups (Crunchbase). The combination of AI and blockchain is addressing significant challenges. Here’s how blockchain is facilitating AI development:
Data integrity: Ensuring the authenticity and tamper-proof nature of the data used for AI training.
Decentralized storage: Providing a secure, low-cost alternative to centralized storage.
Decentralized AI computation: Reducing costs by utilizing idle computing power.
With the deep integration of AI and DeFi, cybersecurity, and data privacy, the combination of AI and crypto will drive new opportunities and address existing challenges.
2025 will be a key year of transformation for the crypto industry. From the expansion of the Bitcoin ecosystem and the tokenization of real-world assets to the convergence of AI and blockchain, these trends will reshape the market landscape.
6) DePIN: Physical and digital infrastructure
Decentralized Physical Infrastructure Networks (DePIN) leverage blockchain technology to create decentralized solutions for real-world applications. Despite regulatory hurdles and competition from Web2 companies, DePIN is gaining momentum:
In 2024, $568 million in funding was secured, with over 1,500 projects reaching a market cap exceeding $50 billion.
A, AI-driven projects:
In 2024, nearly half of the top-funded DePIN projects focused on artificial intelligence.
B, Global hubs:
The US leads DePIN innovation, followed by Singapore and the UK.
C, DePIN: Responding to the growing demand for infrastructure, providing powerful solutions for the digital economy
Decentralized storage: Secure, efficient, and resilient
Centralized storage faces increasingly serious threats, with over 1 billion records leaked in 2024 alone. Decentralized storage offers a resilient alternative:
No single point of failure: Data is replicated across nodes, reducing the risk of network attacks.
Energy efficiency: Distributed storage consumes less energy compared to centralized data centers.
Advanced security: Technologies like Multi-Party Computation (MPC) and Zero-Knowledge Proofs (ZKP) enhance data protection.
Innovative dynamic sharding: Optimizing performance by real-time adjusting data distribution, reducing the risk of data loss.
PayFi: Instant, programmable finance
Solana's PayFi enables instant settlement and automated payments through smart contracts. By leveraging RWAs and DeFi, PayFi allows users to:
Using lending protocols to pay for daily expenses.
Optimizing capital use while protecting its primary assets. PayFi has the potential to revolutionize cross-border payments, DeFi applications, and financial flows in the real world.
SocialFi: Monetizing social interactions
SocialFi combines social media with DeFi, allowing users to earn rewards through online activities. With a Web2-like interface, SocialFi platforms provide a seamless transition to Web3 experiences.
Challenges include creating sustainable economic models and handling high transaction volumes, but progress in decentralized infrastructure may drive its popularity.
Privacy and verification: The rise of ZKP
Privacy tools, such as Zero-Knowledge Proofs (ZKP), are becoming increasingly important in blockchain applications for payments, authentication, and governance.
ZKP can verify data without exposing sensitive information, balancing transparency and confidentiality.
Cross-chain interoperability and chain abstraction
Seamless blockchain interaction is becoming increasingly important. Projects like Particle Network provide account-level chain abstraction, allowing users to unify account balances across multiple chains without bridging. This innovation simplifies the user experience and supports the development of cross-chain applications.
DeFi revival and pre-confirmation
With Ethereum's fees decreasing and changing market conditions, DeFi is expected to regain momentum. Greater accessibility and emerging use cases will drive the next wave of decentralized financial services.
Pre-confirmation protocols, such as Primev, Luban, and Bolt, provide guarantees for transaction inclusion and MEV protection. This innovation enhances transaction speed and security for traders and decentralized applications (dApps), while achieving decentralization in block production.
5, Summary: Outlook for 2025
2025 will be a critical year for blockchain technology, driven by technological innovation, regulatory clarity, and institutional adoption. Analysis shows that 2024 saw many important developments, such as the rapid proliferation of Bitcoin ETFs, the expansion of Layer 2 solutions, and the increasingly central role of stablecoins in the global financial system.
New frontier areas such as decentralized physical infrastructure networks (DePIN), tokenization of real-world assets (RWA), and DeAI are expected to radically transform the field. The convergence of AI and blockchain is likely to enhance scalability, security, and user experience, paving the way for widespread adoption.
The EU, UK, and Asia-Pacific regions are leading the way in regulatory advancements, enhancing investor confidence. Meanwhile, the US is expected to introduce crypto-friendly legislation under new government leadership.
The competitive landscape is vibrant, with Solana, Ethereum, and Bitcoin revitalizing their respective ecosystems. Success in 2025 will depend on real-world applications, security, and user-centric solutions.
In short, 2025 is filled with exciting opportunities and challenges.
