Original title: (Breaking the Game and Recreating: A Comprehensive Outlook on the Crypto World in 2025)
Original author: Zeke, YBB Capital Research
Preface
Starting from the wave of inscriptions to the election of the first crypto president, 2024 is about to come to an end. This year, Crypto has experienced an extremely unusual 'bull market', with altcoins performing weakly and Meme memes dominating, ultimately all streams converge back to BTC. Overall, although there have been some lows and frustrations, Crypto is indeed moving in a more positive direction. In the upcoming 2025, there are also many directions worth paying attention to, and in this article, we will briefly look forward to next year based on recent viewpoints.
1. About AI
At the current stage, chain abstraction projects often become exceptionally complex in the technical implementation process due to the excessive pursuit of conceptual perfection, ultimately affecting the user interaction experience. The implementation methods of projects that include intent architecture are relatively complex. Whether based on centralized (like TG Bot), structured (a combination of on-chain and off-chain preprocessing), or distributed (like Solver + Executor architectures), these intent projects often have some common issues. For example, users still need to have a certain degree of understanding of DeFi, and the expression of intent must be clear, accurate, and simple. For complex and vague intents proposed by users, current intent projects show a sense of helplessness, and the scope of implementation is also quite limited. Therefore, since Paradigm proposed this concept in mid-2023 until today, so-called intent-centered projects have consistently shown a lot of noise but little rain, providing little help in guiding new users and reducing user operation thresholds. However, we all know that looking at the development path of Ethereum layer 2, the market demand for both is still urgent.
Let’s review the development of Layer 2 over the past few months. Among the top projects, the Layer 2 alliance represented by OP Superchain has gradually grown. Zksync's Elastic Chain and Arbitrum Orbit will also ultimately form their own alliances along this path. These alliances will be able to achieve direct interoperability through solutions such as interoperable clusters, alleviating the current issues of excessive fragmentation of liquidity and lack of interoperability in the Ethereum layer 2 ecosystem. The competition among dozens of chains will also shrink to competition among multiple forces. However, from a broader perspective, as the crypto market improves, new Layer 2 projects like Movement and Fuel are also competing to launch their mainnets in order to capture scarce liquidity in the altcoin market. For projects below the first tier, fragmentation and lack of interoperability are still intensifying, and virtual machines based on different architectural designs may even have wallet plugins that do not interoperate. Let alone getting new users in; for ordinary blockchain users, the entire layer 2 ecosystem is extremely complex, and the development of non-financial application chains will also face great obstacles in this situation.
To attract new users, Ethereum's ecological alignment is the biggest prerequisite. An ecosystem that requires users to be half-geeks to enter will never achieve 'Mass Adoption'. From the performance of Solana and Ton this year, which have thrived against the trend, it is clear that strategies to lower user thresholds and provide a more consistent, Web2-friendly experience have played an important role in ecological growth. To put it more directly, these two ecosystems have also only done one thing aside from promotion: lowering the difficulty of asset issuance and making the use of the chain more seamless. Therefore, for Ethereum, a comprehensive solution that prioritizes experience is essential, but given the consistently open attitude of Ethereum's core developers, it is naturally impossible to align the entire layer 2 ecosystem through coercive means.
I believe the solution that can first address this issue is the AI browser agent. Early on, when ChatGPT emerged, many people envisioned that AI would revolutionize interactions across apps, allowing operations to span multiple apps and form a comprehensive super app. Taking a common situation like travel as an example, after receiving the user's travel needs, the AI can automatically complete ticket bookings, customize travel routes, arrange meals, and other comprehensive planning based on what the user has stated. If this AI also possesses long-term memory capabilities, it can arrange plans that suit the user even better based on that memory.
Now, Google is about to launch an AI browser agent powered by Gemini, Project Mariner. In the example demonstrated by Jaclyn Konzelmann, director of Google Labs, after installing the AI agent extension in the Chrome browser, a chat window will pop up on the right side of the browser. Users can instruct the agent to perform tasks such as 'create a shopping cart from this list at the grocery store'. Then, the AI agent will automatically navigate to a grocery platform and add items to the cart before proceeding to the checkout page. Once confirmed, the user will check out on their own (the agent does not have payment permissions). Similar products will also be launched by OpenAI next month.
It is worth mentioning that although Google’s Project Mariner is currently only available to selected testers, I have already experienced similar agents developed for ordinary users in some projects within Crypto. From a few hours of testing, the current accuracy of the agent in implementing complex and vague intents can reach about 60-70% (cursor operation speed is relatively slow), and it can autonomously perform operations such as token trading on various DEXs within public chains and even cross-asset transactions from Ethereum to layer 2. In this process, all I need to do is inform it of my intent and input my wallet password.
Of course, this base still requires calling the API of a centralized model, so what collisions can Crypto produce with it? I believe the AI browser agent, besides becoming a better intent resolution solution, will also drive the explosion of AI wallets, decentralized computing power, and decentralized data projects next year.
Consider a simple question: why has the beautiful concept of Agents only been realized today during these years of rapid AI development? In fact, looking back at the development process of OpenAI, it is not difficult to find that the development of pure language models has always been faster than that of models like image generation. This is because the internet itself is a huge corpus, providing endless textual materials for training. The limitations on the development of language models are primarily computing power and energy. Agents require a lot of human labeling and feedback, and the reasoning process is expensive. Crypto inherently has the ability to obtain labor through incentives. In this economic system, upper-layer users can provide a large amount of labeled data and feedback in a decentralized manner to obtain tokens, while the lower layer can also integrate decentralized computing power and data projects. After training is completed, it can also be integrated with wallets and DeFi projects through SDKs to realize a true AI wallet, ultimately forming a closed loop. Other ideas about AI agents can also be derived from this, as any AI agent suitable for Web3 will require computing power, labeling, and feedback to 'grow'.
2. Stablecoins
Stablecoins will always be a battleground, and they are also a highly demanding track in Crypto. Regarding their application value, they have gained broad recognition even outside the industry. For example, this year, several giants in the traditional financial sector have also ventured into the stablecoin market, including PayPal's PYUSD, BlackRock's collaboration with Ethena on USDb, and VanEck's AUSD (serving Argentina, Southeast Asia, and other regions).
As Tether and Circle deepen their dominance in this track, new entrants to the stablecoin issuance space are gradually dividing into two categories. First, the issuers of fiat-backed stablecoins are starting to turn their attention to emerging markets primarily in South America and specific application scenarios, while algorithmic stablecoins are generally shifting towards stablecoins that use low-risk financial products as underlying assets, such as Ethena and Usual mentioned in the previous article. From a trend perspective, next year will see more delta-neutral stablecoins competing for short-selling liquidity in CEX, while hedging assets will gradually expand from BTC and ETH to higher-risk, lower-liquidity public chain tokens to compete for the remaining down-market. As for stablecoins like Usual, which are based on medium to short-term US Treasury bonds, I believe there is still more innovation in protocol tokens and yield methods, and there are no better options than medium to short-term Treasury bonds in terms of RWA asset types. However, compared to the limited liquidity in CEX, the competition for such stablecoins will be smaller, and the upper limit will be larger.
In general, the development of stablecoins is gradually moving towards pursuing more stable underlying assets and decentralized governance. However, I hope that next year will see the emergence of some completely decentralized and non-over-collateralized stablecoin protocols.
3. Payments
With the compliance and accelerated adoption of stablecoins in various countries, the downstream payment track of stablecoins will also become a new competitive focus. Heterogeneous public chains like Solana and Move, which have high TPS and low gas fees, will become the main infrastructure for payment applications. Traditional payments are already a highly mature and intensely competitive red sea market; what changes can blockchain provide? Firstly, two relatively simple and commonly mentioned points are: optimizing cross-border payments to eliminate pre-financing requirements, making cross-border remittances faster, cheaper, and easier, solving the problem of trillions of dollars in pre-paid funds in traditional systems. Secondly, serving emerging markets, which I mentioned in previous articles; in regions like Asia, Africa, and Latin America, the application value of stablecoins has already been reflected. Strong financial inclusivity allows residents of third-world countries to effectively cope with hyperinflation caused by government instability. Through stablecoins, they can also participate in some global financial activities and subscribe to cutting-edge virtual services.
The concept of 'PayFi' proposed by Solana Foundation manager Lily Liu at the 7th EthCC conference provides more imagination for the combination of blockchain and payments. This concept involves two core elements: timely settlement, which means T+0 settlement. PayFi can achieve same-day settlement, and even multiple settlements within a day; the delays and complexities of the traditional financial system that should be involved in the entire process will be eliminated, significantly increasing the speed of fund circulation. The second is buy now, pay later (BNPL), which means 'Buy Now, Pay Never'. For example, a user deposits $50 into a lending product to buy a cup of coffee worth $5. Once the accumulated interest reaches $5, that interest will be used to pay for the coffee, and the funds will be unlocked and returned to the user's account.
There are many ideas that can be extended from this, such as in usage scenarios, the financing needs of emerging projects can form a safer and more transparent entry and exit through PayFi in the blockchain. Currency exchange during travel no longer needs to rely on various physical financial institutions, and the freedom to control payment and receipt time (delayed receipt to earn interest, early payment to get discounts). The methods of earning will also become more diversified. In addition to depositing stablecoins into lending products to earn interest, I personally believe that the types of stablecoins should also allow for easy conversion. In the future, with the significant emergence of new stablecoins, users can choose the most suitable type of stablecoin according to their personal risk tolerance, thus obtaining both stablecoin protocol tokens and higher stablecoin interest. For DeFi, if this payment system can become mainstream, its growth potential will be unimaginably large.
4. DEX
We have mentioned the issues of fragmentation and lack of interoperability in Layer 2 in the first section. This development path also has a problem, namely the oversupply of block space; the development of Infra far exceeds that of Dapps. This problem will prompt a large number of long-tail chains to be naturally eliminated within a few years, which is also a headache for Ethereum, which does not receive positive feedback from Layer 2 due to mispricing in DA.
Looking back at this round of counter-cyclical growth, the public chains fundamentally rely on their strong community, ecology, and promotional advantages, and have provided these advantages to asset issuance platforms to achieve rapid growth in overall TVL. Therefore, not every Layer 2 can replicate this attention economy, and the lack of super applications remains a realistic issue to face next year. Following the trend, besides what we mentioned above, the demand for AI Agents in the future may be a way out. Other obvious short-term trends include on-chain order book DEX, privacy, payment-related stacks, and decision-making tools.
I personally believe that on-chain order book DEX will become mainstream among the next generation of DEX. After all, from the development of AMM, the complexity of its technical path is constantly multiplying, but the efficiency gains are becoming increasingly limited, as we mentioned in articles related to Uni. However, for layer 2, the limitations of performance and gas are still quite obvious, and the improvement of matching algorithms and innovation in gas solutions will become key challenges.
5. Asset issuance remains the main theme
From 2023 to today, from inscriptions to the current AI Meme platforms, providing asset issuance methods has been a hot topic in the past year. If we extend this time span a bit, in fact, asset issuance can be regarded as the only main theme of the crypto world since the ICO era. However, the external packaging and the thresholds for issuance are changing. From a good perspective, the demands of users for gaming have driven the advanced development of Infra and DeFi, and as this technology is recognized by the world, blockchain has entered the mainstream and integrated into reality. From a bad perspective, this game has become purer and more absurd, and the decline in the difficulty of asset issuance also means that this dark forest is becoming more dangerous. Nowadays, you just need to click with a picture and a few sentences, and a grand zero-sum game begins. Why don’t we guide it back to a more positive side? To promote industry progress in the game.
For example, some current AI Memes are also beginning to shift towards practical Agent development, rather than the nonsensical early versions of AI Agents. The recently popular DeSci can also be referred to as 'the ICO version of scientific research'. Although the current kernel is driven by Memes, in the long run, combining various advantages of blockchain, DeSci can promote traditional scientific research to become more transparent, easily disseminated, easily financed, and easily communicated. However, whether it can ultimately land and how it will evolve still requires a question mark.
In fact, the idea similar to DeSci has also been mentioned in my article about GameFi, such as the situation of independent game funding and personnel shortages, and how to effectively promote the development of independent games through blockchain. The problem with blockchain financing is that the threshold for asset issuance is too low, with too few restrictions, and the fundraising ability is too strong (it can also be said that the entry threshold on the chain is extremely low). How to use rules to restrict the use of funds and force project parties to constantly create truly valuable things is also a key point we should consider.
Let the players play, and let the builders advance; this is the premise for blockchain to continue developing. Next year, we may see more versions of 'ICO', but what I hope is that in this feast of games, we can push towards the next 'DeFi Summer'.
This article is a submission and does not represent BlockBeats' views.
