Original: Unchained
Compiled by: Yuliya, PANews
In this challenging and opportunity-filled year of 2024, the cryptocurrency market has experienced a roller coaster of development. 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, with PANews providing a text compilation of this podcast.
Biggest winner
Haseeb:
I believe the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform executed the most successful token airdrop this season, marking its 'Uniswap moment' in this cycle. Although it still has a long way to go in terms of true decentralization, its token distribution method and community response are exciting. As a VC, we truly regret not being able to participate—actually, almost all VCs tried to invest in HyperLiquid, but they were all turned down. This 'perfect birth' project is indeed impressive, especially in terms of product capability, execution, and technical delivery.
Robert:
"From my perspective, the biggest winner this year is all cryptocurrency founders and companies in the United States. We have witnessed an important turning point: from the extreme hostility and resistance faced previously to the positive trends now visible. As a U.S. cryptocurrency founder, this shift is exciting. Finally, I no longer have to feel troubled about engaging in cryptocurrency ventures in the U.S."
Tarun:
"I want to choose the entire DeFi (decentralized finance) sector. Remember the 36-month bear market predicted by Degen Spartan? DeFi was once seen as the problem child in the cryptocurrency world, where the valuations of unlaunched public chains were often ten times that of DeFi projects. But now, DeFi has made a strong comeback. As someone working in the DeFi space, it is indeed gratifying to see such development."
Tom:
My choice might be a bit surprising—it is Tether (USDT). They have performed exceptionally well this year and can be considered one of the most profitable companies globally. For years, many have been waiting for Tether to collapse or encounter significant issues, but the opposite has happened; it has become increasingly successful and standardized. Tether not only continues to grow but has also become an important case in the cryptocurrency industry, especially regarding stablecoin applications and the trend of global dollarization.
Biggest loser
Robert:
Undoubtedly, the anti-crypto camp is the biggest loser this year, including some members of Congress and certain individuals in the executive branch, particularly some members of the SEC and those pushing for 'Operation Choke Point 2.0.' They mistakenly believed that suppressing the cryptocurrency industry would advance their political careers, but this has proven to be a completely failed strategy. I hope this can change the political landscape in the future, making political suppression of cryptocurrencies no longer a viable political tactic.
Tarun:
I would say the biggest loser this year is the numerous second-tier Layer 2 projects and application chains. At the beginning of 2023, the market generally believed that there would be thousands of L2 projects, each L2 tech stack spawning a plethora of specific-use application chains. But the reality has proven this assumption completely wrong. Just look at the ongoing turmoil in the Cosmos ecosystem. Previously, people thought successful applications like Blur could launch their own application chains or L2s, like Blast, but the actual results have not been ideal. Instead, we see users more inclined to concentrate on a few top L2 projects.
Haseeb:
I believe financial nihilism is the biggest loser this year. In the first half of this year, the perspective that everything in cryptocurrency is meme coins and all technology is meaningless was once prevalent. But the reality is that the trading volume of meme coins has significantly decreased from an early ratio of 20-30% to now 10% or even lower. The market has shown more enthusiasm and confidence in genuine technological innovation and substantial progress. If you believe all technology is valueless, then you were indeed a big loser this year.
Tom:
I would say the biggest losers are those who abandoned crypto to turn to artificial intelligence this year. This is a classic case of 'game over, we're back.' When asset prices drop, investors exit, developers switch careers, and market sentiment turns extremely negative, but cryptocurrencies always find a way to return in different forms. Personally, I know many people who either sold their cryptocurrencies, closed their companies, or switched to other fields. This is unfortunate because you really need strong conviction to succeed in this field. Those who lack this conviction and turned to AI may now regret it.
Biggest Surprise
Tarun:
Undoubtedly, what surprised me the most this year were the projects Pump.fun and BonkBot. I remember we discussed Pump.fun in our show back in January and February when it was just starting out, providing users with an innovative way to create assets. I believe without Pump.fun, the development of meme coins would not have been so rapid. The other is BonkBot, a Telegram bot focused on meme coin trading. In terms of revenue, BonkBot can be considered an invisible champion, achieving $100 million in revenue in its first year, just like Pump.fun. The speed of development of meme coin infrastructure truly astonished me.
Tom:
I have two surprises to share. The first is the launch of World Liberty Financial, with a presidential candidate associating with a DeFi token, and Trump even holding a wallet, which is truly unbelievable. But what surprised me even more was its sales performance. Normally, ordinary meme coins or NFTs can sell out in a short time, but this presidential-related DeFi token only sold 25%, and sales continued to decline. These two points were greatly beyond my expectations.
Additionally, regarding the point raised by Tarun, I want to add that I predicted back in early 2024 that the application layer would generate significant revenue. For example, Photon, Banana Gun, and even Uniswap have all generated hundreds of millions in revenue, exceeding that of most DeFi protocols. While I did not specifically predict the meme coin infrastructure, the applications have indeed performed excellently, with revenue and profitability surpassing many protocols.
Haseeb:
My two biggest surprises are: first, the rise of the 'Tap to earn' model was unexpected, although there has been almost no news about it now, such as the Hamster Combat game even attracting military attention in Iran. Second, there were no significant cryptocurrency security incidents (L1/DeFi) this year, indicating a significant improvement in industry security. Although TVL (total locked value) has rebounded sharply, we did not see the massive losses seen in previous years, which is a positive sign.
Robert:
I want to add that there are changes at the infrastructure level. The rise of Solana and Base as meme coin infrastructures is surprising. These two platforms have performed excellently in terms of new user activity due to low transaction fees and convenient token issuance mechanisms, with adoption speed and scale exceeding expectations.
Best new mechanism
Tom:
I think it must be the binding curve and LP lock mechanism of Pump. I am glad to be the first to speak because I have a feeling this will be a popular choice.
Robert: I believe the best mechanism is the 'yield amplification' model, which can be seen in several stablecoin projects like Ethena and Usual. The core idea is to allocate the returns generated by a specific underlying asset (which can be arbitrage trades, government bonds, or any asset) only to a portion of users, thus significantly amplifying the yield. For example, if the annualized yield of the underlying strategy is 5%, when only a quarter of users participate in the distribution, the actual yield for those users can be amplified to 20%. This mechanism played an important role in Ethena's development, and I believe we will see more projects adopt similar mechanisms in the coming months.
Tarun:
From my perspective, there are two outstanding mechanism innovations this year. The first is the liquidity guidance mechanism for meme coins; the second is the innovations related to basis trading, particularly the Market Maker Lending Pools. This type of lending pool can be traced back to the GLP pool launched by GMX at the end of 2021, which has now evolved into the Jupiter JLP pool and HyperLiquid's HLP pool on Solana.
The innovation of this mechanism lies in solving a key problem for decentralized exchanges: centralized exchanges can directly provide collateral loans to market makers, while decentralized exchanges previously lacked similar mechanisms. Through these lending pools, users seeking returns can deposit assets into the pool, while perpetual contract traders can borrow these assets for market making and pay fees to deposit users. This greatly enhances the capital efficiency of decentralized perpetual contract trading and is one of the significant reasons for the historic surge in decentralized perpetual contract trading volume.
It is worth mentioning that projects like HyperLiquid can grow rapidly largely due to this lending pool mechanism. Currently, the scale of Jupiter's JLP pool has reached $1.5 billion, and this infrastructure provides crucial support for on-chain basis trading. Although decentralized perpetual contract trading may never fully match the capital efficiency of centralized exchanges, this mechanism has indeed greatly narrowed that gap.
Haseeb:
This is indeed an important innovation. So how do these lending pools operate specifically, like JLP or HLP? Is there a specific third party that operates them?
Tarun:
It depends on the specific project. For example, GMX's liquidity provision is programmatic, with target weights determined by governance or multisig. HyperLiquid's HLP is managed directly by the project team. JLP and GLP are similar to AMM (automated market makers), where anyone can conduct arbitrage operations. The key is that this mechanism effectively connects LP users who want to earn returns with traders who need funds for market making.
Best Meme
Haseeb:
I vote for Justin Sun's birthday photo. You might remember that this entrepreneur, who is highly regarded in our industry and reportedly beloved by employees, posted a photo on his birthday. This photo was clearly AI-generated, as he had 14 fingers in the image. This might be one of the most embarrassing moments for one of the most successful entrepreneurs in the crypto industry, but this meme indeed left a lasting impression on me.
Robert:
While this may not strictly be considered a typical meme, I want to award the best meme to Pudgy Penguins. Perhaps because they just launched the PENGU token, with a fully diluted valuation of $5 billion at the opening. Although I do not hold any Pudgy Penguins or PENGU tokens, I must admit their achievements: continuing to build during a bear market, turning an ordinary meme into a massive success through sustained promotion and deep operations. They have now launched penguin dolls, meme coins, and other peripheral products, and the community is thriving.
Tarun:
I want to choose Bonk. Mainly because BonkBot is a genius marketing approach that helped Bonk grow from nearly zero to a market value of billions of dollars within a year. If we are to talk about the most successful 'blue-chip' meme coin in the Solana ecosystem, it has to be Bonk.
Tom:
This choice is indeed difficult, but I want to nominate Hugo Martingale; the operation of this Polymarket intern's Twitter account is outstanding. Their content is fresh and interesting, often quick-witted in the comments, making it a very high-quality account.
Haseeb:
I am glad to see not everyone chose meme coins. To be honest, we might have discussed meme coins too much this year, and I hope there will be fewer meme coin-related topics next year.
Best/Worst transformation
Robert:
I want to merge the awards for 'Best Transformation' and 'Best Comeback Story' and present them to MicroStrategy. Although they made the decision to transform from a mediocre business intelligence software company to a Bitcoin leveraged ETF five years ago, 2024 is the year this transformation truly received market recognition. They not only broke through historical highs from the internet bubble era but also created an astonishing business model: by issuing convertible bonds at a higher premium than Bitcoin to obtain funds, and then continuing to purchase Bitcoin, forming a perpetual funding cycle.
Tarun:
I want to nominate the Babylon protocol. Although their transformation technology technically began in 2023, it was not fully realized until 2024. Babylon initially only provided Bitcoin timestamp services for the Cosmos chain, but later developed 'remote staking' technology, allowing users to use Bitcoin as collateral for staking. Now their TVL (total locked value) has reached $6 billion. Transforming from a single timestamp service to such a large-scale business is one of the most successful business model transformations I have ever seen.
Tom:
I want to nominate the Democratic Party's 'worst transformation.' From the incident involving Trump at Mar-a-Lago to Biden's issuance of executive statements regarding digital assets, and Kamala's vague statements about cryptocurrency investments, the entire process seems very chaotic. In contrast, Trump adopted a simple and straightforward strategy, saying what people wanted to hear and doing what people wanted, like 'Free Ross.' The Democratic Party's performance on this issue was disappointingly akin to shooting just two inches from the goal and completely missing.
Haseeb:
The best transformation I chose is the transition of the NFT community to meme coins. For example, Miladys launched the CULT token, and Pudgy Penguins launched PENGU, with the market capitalization of these meme coins even exceeding that of the original NFT projects. Interestingly, this transformation did not provoke opposition from the community, and no one accused them of deviating from NFTs. Although these tokens seem to have no practical use, this transformation strategy has been surprisingly successful. This may relate to the choice of public chain, as 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 found that in the cryptocurrency field, sometimes simple 'vibe coins' are actually more popular than tokens that try to create serious value. This seems to prove a point: when issuing new tokens, there is no need to complicate things too much; people prefer having multiple simple tokens rather than one complex conversion mechanism.
Most disappointing project
Tom:
I believe it is the rebranding plan of MakerDAO to Sky. The most obvious evidence of this failure is that even after the rebranding, people still refer to it as Maker instead of Sky. Although DAI still has a much larger scale compared to USDS, it is said they are considering reversing this rebranding, which is clearly an unnecessary and ineffective decision.
Haseeb:
I choose Bitcoin L2 projects as the biggest failure. At the beginning of the year, the market had high hopes for Bitcoin L2, expecting it to reach billions of dollars in TVL and believing that the Bitcoin ecosystem would embrace DeFi. But the reality is that even with multiple projects launching, they have become 'ghost towns.' Hardly anyone discusses these projects, and very few founders express intentions to launch projects on Bitcoin L2.
Moreover, celebrity coins are also a significant failure. There was a time when people believed celebrity coins would perform better than ordinary meme coins, due to celebrity endorsements. For example, MOTHER falls into this category. However, these are essentially social tokens, and over time, their performance has been extremely poor. Initially, the market thought this would become a massive opportunity, but now it seems this expectation has completely fallen short.
Robert:
I want to nominate Friend.tech and the downfall of the social finance (Social Fi) craze it sparked. Earlier this year, Friend.tech was once considered one of the hottest startup projects in the crypto space, but its development cycle was extremely short. From the initial concept to being highly sought after, to launching the V2 version and Friend token, and finally fading into silence. Now the value of both the product and the token has nearly hit zero; this may be one of the rare truly self-destructing projects. Although projects like Farcaster are still developing, the entire crypto social sector faces enormous challenges.
Best comeback story of 2024
Tom:
I want to nominate Coinbase. When cryptocurrency prices drop, Coinbase often becomes the 'punching bag' for the market. In 2023, they laid off thousands of employees, and many believed they might go bankrupt. However, with the launch of the Bitcoin ETF, Coinbase, as the custodian for the ETF, gained new development opportunities. Their overseas business, while not particularly outstanding, is steadily growing. Additionally, they have gained a stay in their litigation with the SEC, marking a series of significant victories in 2024. Notably, this is Coinbase's second consecutive year being recognized as the best comeback story, which is indeed impressive.
Haseeb:
I want to nominate Magic Eden. They were once considered a 'second-tier' NFT trading platform after OpenSea and Blur. However, by entering the Bitcoin ecosystem, especially with their layout in BRC-20 tokens and Ordinals, they achieved impressive trading volume. Their performance in the Solana ecosystem has also been quite good. Recently, they launched a platform token, which can be said to be a perfect transformation.
Robert:
In addition to the previously mentioned MicroStrategy, I also want to nominate the entire Bitcoin ETF ecosystem. After years of rejections and failures, this year finally saw breakthroughs. This is thanks to Grayscale's lawsuit against the SEC and their victory, paving the way for Bitcoin ETFs, which have performed exceptionally well, serving as a model of revival from 'death.' Although some may view this more as a 'winner' rather than a 'comeback' story, institutions like BlackRock have indeed demonstrated strong capabilities in this process.
Tarun:
I choose the Move ecosystem as the best comeback story. Sui's market value has reached $50 billion, Movement's initial funding exceeded $5 billion, and many DeFi protocols have also launched on these public chains. In the third and fourth quarters of 2023, when Solana received a lot of attention, the Move ecosystem seemed to be overlooked. But now, through improving user experience and optimizing other features, they have clearly achieved a strong comeback.
Host: From these cases, we can see that in the cryptocurrency market, even projects that have gone through lows can achieve a strong comeback as long as they have the right strategic positioning and execution. This also reflects the resilience and innovative capacity of this industry.
2025 predictions
Haseeb:
I have three predictions. First, Bitcoin will see a pullback after reaching $150,000; second, DeFi tokens will experience 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 optimistic about Bitcoin, expecting it to reach $180,000 without a sharp pullback. Secondly, I believe the U.S. will introduce specialized legislation for cryptocurrencies for the first time, which will be an important milestone for the industry. Finally, I predict there will be a media-captivating AI crypto scam incident.
Tarun:
My predictions mainly focus on three aspects. First, there will be a wave of consolidation in application chains and the L2 track, and we may see multiple merger cases, mainly due to high operating costs and issues with trading volume concentration. Second, the total market value of AI agent-related tokens will grow at least fivefold, significantly rising from the current $10 billion. Finally, Solana's inflation rate will be reduced by at least 25%.
Tom:
I also have three predictions. First, money games like Farcaster or 'button' will achieve mainstream popularity, going viral on platforms like TikTok. Second, new crypto asset ETFs will be approved, but they may be relatively traditional coins like XRP or Litecoin, rather than the emerging assets the crypto community is looking forward to. Third, we may see a significant security incident at the application layer, possibly stemming from supply chain attacks or library vulnerabilities.
