Author: Ana Paula Pereira, CoinTelegraph; Translated by: Deng Tong, Golden Finance

2024 will be remembered as a landmark year in cryptocurrency history. From the surge in mainstream demand for Bitcoin-regulated financial products to the White House's expected friendliness toward the cryptocurrency, the Web3 industry has made significant progress despite facing notable challenges along the way.

With its resilience finally paying off, the industry is now looking ahead to another promising year as hopes for regulatory clarity combine with years of innovation and development.

Experts are keeping a close eye on emerging trends that promise to not only redefine the cryptocurrency landscape but also impact the world at large.

RWA: A Use Case to Watch in 2025

If you’ve never heard of it, take note of this word: tokenization. It refers to the art of transforming traditional assets into tokens, making them tradable, even in small fractions.

In 2024, developers, investors, and companies from all walks of life are attracted to the real-world asset tokenization (RWA) craze because it unlocks liquidity for traditionally illiquid assets (such as real estate) and allows people around the world to access investments that are not always accessible to small investors.

“RWA is the use case to watch in 2025. The value of tokenized assets will double this year,” predicted Sergey Gorbunov, CEO of Interop Labs and co-founder of Axelar Network.

Gorbunov’s view was echoed by venture capital firm a16z, which said in its annual report on trends in the cryptocurrency and blockchain industries that “tokenization of unconventional assets has the potential to redefine revenue streams in the digital age.”

According to RWA.xyz, the total value of tokenized assets is now close to $13.9 billion, up 67% from $8.3 billion in January.

On-chain real-world assets are currently valued at over $13.8 billion. Source: RWA.xyz

Financial institutions are currently working on risk frameworks for tokenized assets. In other words, they want to ensure compliance with legal requirements, address security risks and market volatility. According to Gurbunov: “Several large financial institutions will develop the risk frameworks required to issue RWAs that can move between interconnected public blockchains.”

Identity checks via AI agents

Over the past few years, several protocols have been working on how to provide identity verification on-chain.

One of the advances in this area is undoubtedly the emergence of zero-knowledge (ZK) proofs, a technology that allows humans to prove themselves without revealing any personal information. Startups developing this technology include Worldcoin, ONCHAINID, and RisedID.

Going forward, on-chain biometric verification is expected to be increasingly powered by AI. In other words, AI will automatically check your identity on-chain. This may sound like something out of a sci-fi movie, but it’s just one example of how AI and blockchain are merging.

“We expect automated biometric and/or government ID checks to become the norm rather than the exception,” said Civic CEO Chris Hart. He continued:

“As AI agents increasingly act on behalf of users, strong authentication and authorization frameworks will be critical to controlling what these agents can do and for how long — especially in financial transactions.”

DePIN is about to take off

Community-driven energy services, online storage, and internet connectivity have become a reality through the Decentralized Physical Infrastructure Network (DePIN).

DePIN allows users to become stakeholders in the network, meaning they can own a portion of the infrastructure they use, creating new opportunities for financial inclusion.

Borderless Capital, a venture capital firm that has poured millions of dollars into the DePIN protocol, claims the industry has the “most compelling opportunity” in Web3.

“It’s the only Web3 vertical that can generate revenue and fundamentals that are not tied to the cryptocurrency market, and that can provide real-world value,” said Álvaro Gracia, partner at Borderless.

According to data aggregated by DePIN.Ninja, the market capitalization of the DePIN protocol has exceeded $50 billion.

Bitcoin brings more benefits

Finally, it’s impossible to discuss 2025 without mentioning Bitcoin. Once a discredited asset, Bitcoin has made significant progress over the past decade, gaining widespread acceptance on Wall Street and solidifying its place in the financial sector.

While developers are still working to upgrade the network, which now has more stakeholders than ever before, the startup is exploring other ways to unlock benefits for holders.

“This is natural demand from holders, both retail and institutional. This is native demand from holders,” said Kevin He of Bitlayer, a bitcoin Layer 2 protocol backed by asset manager Franklin Templeton.

According to He, not only investors but also large holders of BTC such as MicroStrategy are looking for additional revenue streams through the fusion of Bitcoin and decentralized finance.

According to He, Bitcoin holders will soon be able to earn up to 40% annual returns on their holdings.