Author: NingNing
Source of the report: Messari
I. Summary
This 190-page report from Messari is composed of three parts: the current state of crypto (macro environment, institutional state, where are the users) + track analysis (Bitcoin, Ethereum, Solana, Alt L1s + infra, DeFi, AIxCrypto, DePin, Consumer, CeFi) + analyst choice awards. (Related reading: (Messari 2025 Crypto Outlook: The macro environment will drive Bitcoin up, and the meme craze will continue))
Messari's core analytical frameworks include: blockchain space economics, ecological mapping valuation framework, narrative economics, Schumpeterian innovation theory, and more.
II. Macro Environment
1. Economic environment and regulatory environment
After reviewing significant events in the 2024 macro environment, Messari predicts trends in the changes of the U.S. economic environment and cryptocurrency regulation in 2025.
2025 is destined to be a pivotal year for the reform of cryptocurrency policy in the United States. The FIT21 and stablecoin legislation are significant regulatory legislative cases that will attract global attention and will promote the transparency and standardization of global cryptocurrency regulatory policy frameworks.
In contrast to the optimistic views of institutions related to ETFs like VanEck, Messari cautiously believes that there is a possibility of reversing Trump's cryptocurrency policy.
But in any case, it will be friendlier than Biden's cryptocurrency policy.
Comment: Messari's macro environment analysis does not have any particularly deep insights; the level is average, and it is not as specialized as the macro analysts on Twitter. This part mainly serves to fill pages.
Looking ahead to the market trends in 2025, multiple institutions align with Messari:
That is, the market trend in 2025 will be a Banana ForScale, with new highs in the first half of Q1, a significant adjustment in Q2, and a recovery to new highs in Q3 and Q4.
2. What are institutions doing?
In 2024, institutions will focus on applying for and operating Bitcoin/ETH spot ETFs and promoting RWA (mainly the tokenization of U.S. Treasury bonds) business. Events such as Paypal launching the stablecoin PYUSD and Stripe acquiring the stablecoin company Bridge are blurring the lines between fintech, payments, and cryptocurrencies.
In terms of investment, institutions are adopting a barbell strategy composed of AI and DePin, with the total financing of these two sectors increasing by about 100% and 300% respectively compared to last year.
The incoming artificial intelligence and cryptocurrency czar David Sacks is an investor in Solana, Helium, Render, and Hivemapper. It is expected that the U.S. government will seriously consider collaborating with DePin projects in 2025.
Comment: The main theme of AIxCrypto next year is likely to be Web3AIAgent. AI democratization and AGI, which are capital and talent-intensive heavy industries, need to adapt to environmental changes.
DePin is a favorite among North American institutions this year, particularly interested in high-quality data collection DePin and new energy DePin. One of Solana's strategies for 2025 is still to ensure that DePin occurs on Solana.
3. Where are the on-chain users?
Messari cites a report from A16Z, stating that among 220 million active addresses, about 30 to 60 million are real monthly active users.
Users are primarily distributed across Phantom wallets, stablecoins, Telegram mini-programs, Polymark prediction markets, Base, and Hyperliquid.
Messari believes that the growth of on-chain users in 2025 will come more from the product capabilities of Dapps rather than from Bitcoin ATH news events or the legendary stories of becoming rich through meme coins. Therefore, it is very bullish on the adoption of chain abstraction and aggregation frontends in 2025.
Comment: 2025 will be a turning year for Web3, transitioning from the 'fat protocol' era to the 'fat application' era. APPChain/chain abstraction will become the mainstream paradigm for building Dapps.
The biggest regret of the application layer in 2024 is that Polymark successfully broke through but converted very few crypto users. It is hoped that in 2025, chain abstraction super apps can successfully sell crypto-native stablecoin services, high-yield staking financial products, and cyber lottery meme coins to a wide range of consumers, achieving both acclaim and success as a super phenomenon Dapp.
III. Track Analysis
The essence of Messari's annual outlook report lies in this part; it is one of the best windows we have for observing the perspectives of North American institutional industries.
--Bitcoin
Messari focuses on inscriptions/runic writing, Bitcoin programmability, and BTC staking.
Inscriptions/runic writing will revive under the stimulation of the Fat Penguin consumer chain mainnet launch, OpenSea's token issuance, and the NFT renaissance.
The key BitVM2 engineering for Bitcoin programmability will make progress.
BTC staking has inherent disadvantages compared to ETH staking, and the higher economic security of Bitcoin ReStaking's AVS does not effectively persuade users to adopt it. In 2025, BTC staking projects should still focus on increasing penetration among BTC holders.
--Ethereum
Last year, Messari was overtly anti-Ethereum. This year, the attitude is much more moderate, acknowledging ETH's transcendent status after the spot ETF. It also points out that after the Cancun upgrade, Ethereum's blob pricing mechanism leads to L1 not effectively capturing L2's DA fees, which is the main reason for Ethereum's defeat in the competition in 2024.
However, Ethereum's native narratives/products at the application layer, such as Friends Tech, Farcaster, Lens Protocol, and Eigen Layer AVS, have not been successful.
But Messari believes that fee income is not the most important indicator of L1 value; the ecological map is. From this dimension, Ethereum is still the best L1 ecosystem.
Comment: In 2025, Ethereum's success will depend on whether it can incubate high-performance parallel EVML1 (Monad)/L2 (MegaETH) that can compete with Solana.
--Solana
In 2024, key milestone events for Solana include the lightweight solution Frankendancer for the Firedancer client, new SPL token standards, and state compression solutions ZKCompression.
In 2025, key milestone events for Solana will include the release of the Firedancer client, wider adoption of the prediction market governance protocol MetaDAO, new large-scale DePin projects based on Solana, and the occurrence of AlAgentSummer in Solana/Base, as well as the approval of SOL spot ETF.
Comment: Meme coins do not have a super cycle; the popularity of cyber lotteries is a special phenomenon during a special period. The Solana ecosystem needs to prepare in advance and diversify to break free from its heavy reliance on meme coins in 2025.
--AltL L1s +infra
In 2025, Monad and Sonic will join the high-performance monolithic L1 competition with Solana and Sui. The (3,3) token economic model-driven BeraChain will also go live on the mainnet.
In 2025, blockchain space will be severely oversupplied, and the voice of Dapp developers will further enhance, no longer being restricted by the ideology of the crypto community, allowing them to build consumer-oriented use cases more freely.
After the Cancun upgrade, Ethereum's 'Seven Injuries Fist' narrative regarding modular public chains has concluded. Celestia and Avail are beginning to transform into a global cross-chain interoperability coordination layer.
Next-generation L2s like Mega and UniChain, which have high performance + AltVMs, will also reach the battlefield.
Avalanche welcomes its largest mainnet upgrade in history, Avalanche9000, which will bring significant performance improvements and establish a liquidity center centered on the C chain, starting with Avalanche Interchain Messaging (AIM). Avalanche's ecosystem in 2025 will perform brilliantly in RWA and Web3 gaming (represented by off the grid).
The prospects for Cosmos in 2025 remain uncertain, and when the Interchain Foundation (ICF) truly gains coordination power is a key checkpoint. The ICF's acquisition of Skip Protocol earlier this month may accelerate this process.
Another giant project in the Cosmos ecosystem, Initia, focusing on APPChain interoperability and ecological role benefits, will also join the powerful suppliers of new blockchain space in 2025.
In 2025, chain abstraction protocols like @ParticleNtwrk are accelerating from narrative to productization. Chain abstraction is not a single technology but a combination of technical primitives such as cross-chain bridges, messaging platforms, intent infrastructure, ZK proof aggregators, and shared sequencers.
Comment: When analyzing Alt L1s + infra projects, the explanatory power of blockchain space economics is unbeatable.
--DeFi
When will the trading volume ratio of PerpDEX to CEX catch up with the trading volume ratio of spot DEX to CEX, has always been a focus for DeFi enthusiasts. The emergence of Hyperliquid has reignited hope.
Another focus is on how to make trade-offs between vertical integration and composability when building DeFi protocols.
RWA currently primarily focuses on the tokenization of U.S. Treasury bonds; in 2025, RWA will have two main lines: tokenization of idle assets in DAOs and exporting on-chain yields to traditional capital markets.
In the points Fi sector, Pendle occupies a unique and critical ecological position.
In anti-MEV, the intention architecture of CowSwap has emerged beyond the market game model of FlashBot.
--AI x Crypto
Messari divides AIxCrypto into decentralized computing networks, coordination platforms, AI tools and services, and applications. Of course, Messari also pays attention to AI Agent KOL and AI Agent meme coins.
Messari predicts that significant events worth watching in AIxCrypto in 2025 will include Bittensor and dynamic TAO becoming new AI project token issuance factories, Prime Intellect and Nous Research's work further enhancing the feasibility of decentralized computing power training, and AI agents becoming on-chain and completely distinct from AI meme coins.
The open-source AGI project SentientLabs, which competes against commercial titans, will also receive more attention in 2025.
--DePin
As the inventor of the term DePin, Messari now subdivides DePin into Physical Resource Networks (PRN) and Digital Resource Networks (DRN).
Messari is very bullish on the PRN sector's new energy DePin projects Glow, Daylight Energy Helium, DAWN, GEODNET, Hivemapper, DIMO, and the DRN sector's Prodia, Filecoin, Grass.
In 2025, Solana's dominant position in the DePin sector will face challenges from Base and others.
Comment: This part has a lot of potential high-risk/reward Alpha projects, strongly recommended for interested readers to read the original text.
--Consumer
Messari categorizes Web3 gaming, meme coins and their launch platforms, DeSoc & SocialFi, and NFTs all under this part.
I have written many articles discussing Web3 gaming, so I won't elaborate here. I will only say that Messari has observed an interesting change: the gameplay design of Web3 games is shifting from Play2Airdrop to Pay2Airdrop.
Meme coins and their launch platforms, gamified and personalized design are new trends for MemeCoin launch platforms. In summary, developing around the positioning of MemeCoin as a cyber lottery is sufficient.
DeSoc & SocialFi, as a former product operator, I don't want to say much more about it; it still has little to show in 2025. Solana's flagship protocol Send has already transformed to focus on AIAgent.
The renaissance of NFTs led by Fat Penguin and Web3 consumer IP, Fat Penguin and Azuki will launch consumer chains Abstractchain and Animechain respectively in 2025.
Comment: In the Consumer sector, I am most bullish on Fat Penguin NFT and consumer chain Abstract Chain. 2025 will be the year of @LucaNetz's ascendance.
--CeFi
Not related to retail investors, slightly.
