By Severin，MT Capital
TL;DR
Messari expressed strong optimism for the theses of Solana, DePIN, AI + Crypto, and Perps in their report.
Looking at Messari analysts’ portfolio allocations, internally Messari remains most bullish on Solana and the AI + DePIN theses.
Key Investment Theses
Solana
The rapid launch of new products on Solana, the surge in on-chain liquidity, and the increasing availability of developer tools have always been exciting.
From a technical perspective, upgrades like Local Fee Markets, QUIC, and Stake-Weighted QOS have significantly reduced the occurrence of Solana outages, making Solana more robust. Technologies like cNFT have greatly reduced the cost of minting and managing NFTs on Solana, allowing protocols like Helium and Render to leverage cNFT to significantly reduce expenses and promote the prosperity of the Solana DePIN ecosystem.
For 2024, market expectations for Solana are focused on the following aspects:
Achieve more than 10 times throughput and performance improvements through Firedancer and the Sig client. Firedancer enables Solana to process 1 million transactions per second. Improvements in user experience can attract more developers to participate in using and developing on Solana, enriching Solana’s thriving ecosystem.
2. Through Tinydancer, develop light clients that allow validators to validate at lower costs, achieving greater decentralization.
3. Deploy the token-22 standard to expand Solana’s token capabilities. For example, token-22 will support interest-bearing tokens, allow complex contract logic to be triggered when tokens are transferred, etc.
Solana’s Local Fee Markets and state compression technologies make the following applications “only possible on Solana”:
DePIN: Projects like Helium, Hivemapper, Render have migrated to Solana. Render abandoned its own blockchain for Solana’s compressible cNFTs, faster transaction speeds, and composable on-chain order books.
Payments: Solana has partnered with Visa so users can make transactions on Shopify with Solana USDC at lower costs and faster speeds through the Solana Pay plugin.
Consumer apps: Extremely low-cost cNFTs can boost emerging consumer apps centered around NFTs. For example, DRiP partners with artists to distribute free NFTs to subscribers. Since late March, it has minted over 78 million cNFTs to 1.6 million wallets, with each NFT costing about $0.00036.
DeFi: Extremely low transaction fees and faster settlement finality allow Solana DeFi protocols to create fully on-chain order book models, providing users with smoother experiences not possible on other blockchains.
DePIN, DeSoc, DeSci
In non-financial areas, Messari pays more attention to the future development of DePIN, DeSoc, and DeSci. These three fields have huge potential market sizes and can make more practical changes to the flaws in real-world business processes.
Messari is particularly focused on the following four segmented DePIN areas:
Decentralized Storage: The current cloud storage market has an $80 billion market size and continues to grow at 25% annually. And although decentralized storage services cost 70% less than cloud providers like Amazon S3, decentralized storage still accounts for less than 1% market share, leaving huge market opportunities for decentralized storage.
2. Decentralized Databases: Decentralized databases have long suffered from performance and latency issues, which are expected to be solved in 2024. The emergence of applications like DeSoc, gaming, dynamic NFTs, ML, AL will greatly increase the demand for decentralized databases.
3. Decentralized Wireless Network: DePIN projects represented by Helium Mobile have gradually found their own PMF, driving continuous user growth. Take Helium Mobile as an example, it initially attracted users by providing low-cost service and tokens, then user growth further drove token price growth, attracting more users and payments, spinning the growth flywheel.
4. Decentralized AI Compute: The development of artificial intelligence is currently facing computing bottlenecks and a lack of collaboration. However, DePIN projects focused on AI can well solve these two problems. Gensyn can provide sufficient decentralized compute for AI model training, Bittensor allows individuals to participate in open-source AI model training. DePIN and AI have natural combination scenarios.
In addition to DePIN, Messari also pays extra attention to DeSoc and DeSci. Similarly, creators contribute $230 billion in revenue to social media platforms but only a small portion of creators get income sharing. Friend.tech shared $500 million in revenue with its creators in just months after launch. Messari believes DeSoc could recreate the wave of DeFi Summer 2020.
On the DeSci side, blockchains can effectively optimize key scientific research processes like peer review and funding, and promote key research areas through DAOs and token sales.
Although DeSoc and DeSci have not yet achieved breakout potential like DePIN, Messari remains bullish and looks forward to applications from DeSoc and DeSci that can lead to mass adoption.
AI & Crypto:
Messari believes the advancement of AI will increase demand for crypto solutions, and cryptocurrencies like Bitcoin are naturally suitable for AI payments.
AI and Crypto have the following combination scenarios:
AI agents can use crypto infrastructure to pay and access digital resources autonomously.
Innovations like zkML allow smart contracts to safely orchestrate AI models, supporting more complex application logic.
Tokens provide a way to incentivize individuals to tune models and collect valuable real-world data, naturally suitable for combining with DePIN.
Perps
Messari explicitly stated in its report that if you are going to focus on one DeFi subsector this year, it should be Perp DEX.
With dYdX migrating to a custom Cosmos application chain, dYdX’s centralized order book can provide a trading experience closer to CEXs. And considering regulatory pressures on CEXs, the gap between dYdX and CEXs may narrow further.
In addition to Solana’s ecosystem Perp DEXes (Drift and Jupiter), Synthetix is also worth extra attention. With the launch of Synthetix Andromeda, Synthetix will introduce full collateralization, support new collateral types, and various improvements around trading, liquidation, etc. Synthetix also removed years of token inflation and may shift to deflation. In terms of token price, Synthetix is also the 4th best performing DEX year-to-date.
ETH
ETH is currently in a dilemma. Its appeal to institutions is not as strong as Bitcoin’s digital gold narrative, and other competing L0s, L1s, and L2s are gradually eating into Ethereum’s transaction volume. Although ETH currently looks not suitable for investment, Ethereum’s Cancun upgrade is still worth paying attention to. Ethereum’s Cancun upgrade can reduce Rollup transaction costs by 90–99%, making Rollups as cheap as other Alt L1s. The delivery date of the Cancun upgrade is one of the most important dates to mark.
Analyst Holdings
The most interesting part is Messari’s published analyst holdings. The chart below shows the distribution of analysts’ largest gainers in 2023. It can be seen that analysts’ main profits come from the Solana ecosystem and the AI + DePIN thesis. This also reflects that analysts have caught on well to the leading narratives of this bull run.
The chart below shows the current token holdings distribution of Messari analysts (removing tokens that appeared only once). Analysts’ major holdings are similar to their top gainers in 2023, still concentrated in Solana and the AI + DePIN thesis. Interestingly, for other sectors analysts are bullish on, such as DeSoc, DeSci, Perps, etc., analysts do not hold any related tokens.
The chart below shows Messari analysts’ favored sectors (removing sectors that appeared only once). Similar to before, Solana and the DePIN thesis still dominate. However, decentralized derivatives overtook AI to become one of analysts’ favorite sectors, and the ZK concept also reached equal importance with AI.
Reference
https://messari.io/crypto-theses-for-2024
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