Starting from the wave of inscriptions and culminating with 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, the prominence of Memes, and ultimately, everything converging back to BTC. Overall, despite some lows and frustrations, Crypto is indeed moving towards a more positive direction. In the upcoming year of 2025, there are many directions worth paying attention to, and in this article, we will briefly forecast the coming year in conjunction with recent viewpoints.
I. About AI
At the current stage, projects focused on chain abstraction often become exceptionally complex due to an excessive pursuit of conceptual perfection, ultimately affecting user interaction experience. Projects that include Intent architecture are relatively complex in their implementation methods, whether centralized (like TG Bot), structured (combining on-chain and off-chain preprocessing), or distributed (such as Solver + Executor architecture), these intent projects often share common issues. For instance, users still need to possess a considerable understanding of DeFi, the expression of intent must be clear, accurate, and simple. For complex and vague intents put forth by users, current intent projects show a sense of helplessness, and their implementation scope is quite limited. Therefore, since the concept was proposed by Paradigm in mid-2023 until now, the so-called intent-centered projects have been more talk than action, and have not been of much help in guiding new users and lowering operational 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 leading projects, the Layer 2 alliance represented by OP Superchain has gradually grown stronger. Zksync's Elastic Chain and Arbitrum Orbit will eventually follow this path to form their own alliances. These alliances will be able to achieve internal direct interoperability through solutions like interoperable clusters in the future, 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 a competition among multiple forces. However, from a broader perspective, as the crypto market improves, new Layer 2 projects like Movement and Fuel are also racing 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 exacerbating, and virtual machines based on different architectural designs may even have wallet plugins that do not interoperate. Let alone making it easy for new users to enter; for the average blockchain user, the entire Layer 2 ecosystem is extremely complicated, and the development of non-financial application chains will also face significant obstacles in this context.
To attract new users, the alignment of the ecosystem is the greatest prerequisite for Ethereum. An ecosystem that requires users to be half-geeks to get started will never achieve 'Mass Adoption'. Looking at the contrasting performance of Solana and Ton in this year's counter-cyclical development, it is clear that strategies to lower user thresholds and provide a consistent, Web2-closer user experience have played an important role in ecosystem growth. To put it more directly, these two ecosystems have also only lowered the difficulty of asset issuance beyond promotion, making the use of the chain feel more seamless. Therefore, for Ethereum, a comprehensive solution that prioritizes experience is essential. However, given the core developers' consistent open attitude, it is naturally impossible to align the entire Layer 2 ecosystem through coercion.
I believe the solution that can solve this problem first is the AI browser agent. Early on when ChatGPT emerged, many people envisioned that AI would revolutionize the interaction of apps by enabling operations across multiple apps, forming a comprehensive super app. Taking travel as a relatively common scenario, after receiving a user's travel needs, AI can automatically complete ticket booking, customize travel routes, arrange meals and schedules, etc., based on what the user has stated. If this AI also possesses long-term memory capabilities, it can arrange plans more suited to the user based on this memory.
Now, Google is about to launch the AI browser agent powered by Gemini, Project Mariner. In the demo presented by Jaclyn Konzelmann, director of Google Labs, after the AI agent extension is installed in the Chrome browser, a chat window pops 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. After confirming everything is correct, the user will check out themselves (the agent does not have payment authority). OpenAI will also launch a similar product next month.
It's worth mentioning that although Google’s Project Mariner is currently only launched for selected testers, I have already experienced similar agents developed for ordinary users in some projects in Crypto. From several hours of trial, the current accuracy of the agent in realizing complex and vague intents can reach about 60-70% (with relatively slow cursor operation speed), and it can autonomously complete various token trades on Dex within public chains and even transfer assets from Ethereum to Layer 2, etc. During this process, all I had to do was tell it the intent and input my wallet password.
Of course, this foundation still needs to call centralized model APIs, so what kind of collision can Crypto produce with this? I believe that the AI browser agent, in addition to becoming a better experience for intent solutions, will also drive the emergence of AI wallets, decentralized computing power, and decentralized data projects next year.
Think about a simple question: during the rapid development of AI in recent years, why has the beautiful concept of an Agent only been realized today? Looking back at the development process of OpenAI, it's not hard 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 vast corpus, providing endless text material for training. The limitations on the development of language models are more about computing power and energy. Agents require a lot of manual labeling and feedback, and the reasoning process is expensive. Crypto inherently possesses the ability to acquire labor through incentives. In this economic system, upper-layer users can provide a large amount of labeled data and feedback in a decentralized way to obtain Tokens. The lower layer can also integrate decentralized computing power and data projects. After training is complete, it can be integrated with wallets and DeFi projects through SDKs to realize a truly meaningful AI wallet, ultimately forming a closed loop. Other ideas for AI agents can also be derived from this, as any AI agent suitable for Web3 will need computing power, labeling, and feedback to 'grow'.
II. Stablecoins
Stablecoins are always a battleground and a highly competitive track in Crypto. Regarding their application value, they have already gained relatively wide recognition even outside the industry. For instance, this year, several giants in the traditional financial sector have entered the stablecoin market, including PayPal's PYUSD, BlackRock's collaboration with Ethena on USDb, and VanEck's AUSD (serving Argentina, Southeast Asia, etc.).
As Tether and Circle continue to deepen their dominance in this track, new entrants into the stablecoin issuance space are gradually differentiating into two categories. First, issuers of fiat-backed stablecoins are beginning to turn their attention to emerging markets in South America and specific application scenarios, while algorithmic stablecoins are generally shifting towards using low-risk financial products as underlying assets, such as Ethena and Usual mentioned in our previous article. From a trend perspective, next year will see more delta-neutral stablecoins competing for short-selling liquidity in centralized exchanges, and hedging assets will gradually expand from BTC and ETH to riskier, less liquid public chain tokens to compete for the remaining down-market. As for Usual-type stablecoins backed by short-term U.S. Treasury bonds, I believe they focus more on innovation in protocol tokens and ways of earning, with no better choice in terms of RWA asset types than short-term Treasury bonds. However, compared to the limited liquidity in centralized exchanges, the competition for these stablecoins will be smaller, and the potential for growth larger.
Overall, the development of stablecoins is gradually moving towards a pursuit of more stable underlying assets and decentralization in governance. However, I hope that next year will see the emergence of some completely decentralized and non-super collateral stablecoin protocols.
III. Payments
With the compliance and accelerated adoption of stablecoins in various countries, the downstream payment sector of stablecoins will also become a new focus of competition. Heterogeneous public chains like Solana and Move, which have high TPS and low Gas, will become the main infrastructure for payment applications. Traditional payments have already become an extremely mature and competitive red ocean market. What kind of transformation can blockchain provide? Firstly, two commonly mentioned points are: optimizing cross-border payments to eliminate pre-financing requirements, making cross-border remittances faster, cheaper, and easier, addressing the traditional system's trillions of dollars in pre-paid funds issue. Secondly, serving emerging markets, which I have mentioned in previous articles. In regions like Asia, Africa, and Latin America, the application value of stablecoins has already been demonstrated. The strong financial inclusivity allows residents of third-world countries to effectively cope with the high inflation of currencies caused by government instability, and through stablecoins, they can also participate in some global financial activities and subscribe to the world's most advanced 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 aspects: first, timely settlement, which is T+0 settlement. PayFi can achieve same-day settlement, or even multiple settlements in a day, eliminating the delays and complexities of the traditional financial system that should be involved in the whole process, significantly increasing the speed of capital flow. The second is Buy Now, Pay Never (BNPL), for example, a user deposits $50 into a lending product and buys 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 the financing needs of emerging projects in usage scenarios can form a more secure and transparent entry and exit through PayFi on the blockchain. Currency exchange during travel no longer needs to rely on various physical financial institutions, and the freedom to control payment and collection times (delayed payments to earn interest, early payments to receive discounts). The ways of earning will also be more diversified. In addition to the stablecoins mentioned above that earn interest when deposited in lending products, I personally believe that the types of stablecoins should also allow for free conversion. In the future, with the significant emergence of new stablecoins, users can choose the most suitable type of stablecoin at any time based on their personal risk tolerance, thereby 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.
IV. Dex
As mentioned in the first section, the issues of fragmentation and lack of interoperability in Layer 2 exist, and this development path also faces a problem of excess block space, with the development of infrastructure far surpassing that of Dapps. This issue will lead to the natural elimination of many long-tail chains in the coming years, and it is also a significant headache for Ethereum, which does not receive positive feedback from Layer 2 for its DA pricing missteps.
Looking back at this round of counter-cyclical growth, public chains primarily rely on their strong communities, ecosystems, and promotional advantages to provide these advantages to asset issuance platforms, resulting in rapid overall TVL growth. Therefore, not every Layer 2 can replicate this attention economy, and the lack of super applications remains a real problem to face next year. Riding the trend, apart from what we mentioned earlier, the related demand for AI Agents may be a way out. Other obvious short-term trends include on-chain order book Dex, privacy, payment-related stacks, and decision-making tools.
Personally, I am optimistic that on-chain order book Dex will become mainstream among the next generation of Dex. After all, looking at the development of AMM, the complexity of its technological path is continuously increasing, but the efficiency gains are becoming more limited, which we have also mentioned in articles related to Uni. However, for Layer 2, the limitations of performance and Gas are still very obvious; improvements in matching algorithms and innovations in Gas solutions will become key challenges.
V. Asset issuance remains the main theme.
From the emergence of inscriptions to today's AI Meme platforms, the way of providing asset issuance has been a hot topic over the past year. If we extend this time span a bit, in fact, from the ICO era to now, asset issuance can be regarded as the only main theme in the crypto space. However, the external packaging and the thresholds for issuance are changing. From a positive perspective, the demand for user engagement has driven the advanced development of infrastructure and DeFi. With this technology becoming known and recognized by the world, blockchain has stepped into the mainstream and integrated into reality. From a negative perspective, the game has become purer and more absurd; the declining difficulty of asset issuance also means that this dark forest has become more dangerous. Nowadays, with just a click and a few images and sentences, a grand zero-sum game begins. Why not guide it back to a more positive side? To promote industry progress in the game.
For instance, some current AI Memes are beginning to shift towards the development of practical Agents rather than the early versions of nonsensical AI Agents. The recent trend of DeSci can also be described as the 'ICO for scientific research'. Although the current core is driven by memes, in the long term, combining various advantages of blockchain, DeSci can promote traditional research to be more transparent, easily disseminated, financed, and communicated. However, whether it can eventually land and how it will evolve still remains a question mark.
In fact, I have also mentioned similar ideas to DeSci in my article about GameFi, such as how to effectively promote the development of independent games through blockchain in the context of funding and personnel shortages. The problem with blockchain financing is that the threshold for asset issuance is too low, with too few restrictions and too strong fundraising capabilities (which can also be said to be due to the extremely low entry barrier on-chain). How to impose rules to restrict the use of funds and compel project parties to continuously create truly valuable things is also a focus 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 'ICOs', but I hope this game feast can advance the next 'DeFi Summer'.
