Original title: (Breaking the Dilemma and Rebuilding: A Comprehensive Outlook on the Crypto World in 2025)
Original author: Zeke, YBB Capital Research
Introduction
Starting from the boom of inscriptions to the election of the first crypto president, 2024 is about to come to a close. This year, Crypto has experienced an unusually 'bull market,' with altcoins performing weakly, Meme voice being paramount, and ultimately all flows returning to BTC. Overall, although there have been some lows and frustrations, Crypto is indeed moving in a more positive direction. In the upcoming 2025, we also have many directions worth paying attention to. In this article, we will make a brief outlook for next year based on recent viewpoints.
I. About AI
At the current stage, chain abstraction projects often become exceptionally complex in their technical implementation due to an excessive pursuit of conceptual perfection, ultimately affecting the user interaction experience. Projects that include Intent architecture tend to be relatively complex in their implementation, whether based on centralized (like TG Bot), structured (combining on-chain and off-chain preprocessing), or distributed designs (like Solver + Executor, etc.). These intent projects often have common issues. For example, users still need to have a considerable 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 quite limited. Therefore, from the concept proposed by Paradigm in mid-2023 to today, so-called intent-centered projects have shown great noise but little action, providing little help in guiding new users and lowering user operation thresholds. However, we are well aware that, from the development path of Ethereum Layer 2, the market's demand for the two remains urgent.
Let's take a look back at the development of Layer 2 over the past few months. Among the leading projects, Layer 2 alliances represented by OP Superchain have gradually grown stronger. Zksync's Elastic Chain and Arbitrum Orbit will ultimately form their own alliance along this path. These alliances can achieve direct interoperability through solutions like inter-operational clusters, alleviating the current excessive fragmentation and lack of interoperability in the Ethereum Layer 2 ecosystem. The competition among dozens of chains will shrink to a competition among multiple forces. However, from a broader perspective, as the crypto market improves, Layer 2 projects with new architectures like Movement and Fuel are also competing to launch their mainnets 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. Not to mention attracting new users, for ordinary blockchain users, the entire Layer 2 ecosystem is extremely complicated, and the development of non-financial application chains will also face significant resistance in this context.
For Ethereum to attract new users, ecosystem alignment is the biggest prerequisite. An ecosystem that requires users to be semi-geeks to get started will never welcome 'Mass Adoption.' Looking at the counter-cyclical performances of Solana and Ton this year, it is evident that strategies to lower user thresholds and provide a more consistent, Web2-like user experience have played a significant role in ecosystem growth. To put it more directly, what these two ecosystems have done outside of promotion is simply to lower the difficulty of asset issuance and make the use of the chain feel more seamless. Therefore, for Ethereum, a comprehensive solution prioritizing user experience is essential. However, 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. In the early days of ChatGPT's emergence, many people envisioned that AI would revolutionize APP interactions, allowing operations across multiple APPs to form a comprehensive super APP. Taking tourism, a relatively common situation, as an example, once AI receives a user's travel needs, it can automatically complete ticket booking, customize travel routes, arrange meals and schedules, etc. If this AI also possesses long-term memory capabilities, it can arrange plans better suited to the user based on that memory.
Now, Google is about to launch an AI browser agent powered by Gemini, Project Mariner. In the example showcased by Google Labs Director Jaclyn Konzelmann, after installing the AI agent extension 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 grocery list.' Subsequently, the AI agent will automatically navigate to a grocery platform and add items to the cart, leading to the checkout interface. After confirming everything is correct, users will check out themselves (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 rolled out to selected testers, I have already experienced similar agents developed by some projects in Crypto for ordinary users. From several hours of trial, the current agents can achieve an accuracy level of about 60-70% for complex and vague intents (cursor operation speed is relatively slow), and can autonomously complete operations such as token transactions within various public chain Dex or transferring assets from Ethereum to Layer 2, etc. During this process, all I need to do is inform it of my intent and input my wallet password.
Of course, this base still needs to call the API of the centralized model. So, what collisions can Crypto generate with it? I believe that AI browser agents, besides becoming a better intent solution, will also drive the explosion of AI wallets, decentralized computing power, and decentralized data projects next year.
Consider a simple question: why has it taken until today to realize the beautiful concept of Agent during these years of rapid AI development? In fact, looking back at the development of OpenAI, it is not hard to find that the development of pure language models has always been faster than that of image generation models, as the internet itself is a giant corpus that can provide endless text material for training. The limitations on the development of language models are more about computing power and energy. Agents require a large amount of manual labeling and feedback, and the reasoning process is expensive. Crypto inherently has the ability to obtain labor through incentives. In this economic system, upper-level users can provide a large amount of labeled data and feedback through decentralized means to earn tokens. The lower level can also integrate decentralized computing power and data projects. After training is complete, it can also be integrated with wallets and DeFi projects through SDK to achieve a truly meaningful 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.'
II. Stablecoins
Stablecoins are always a battleground and a highly challenging track within Crypto. Regarding their application value, they have gained relatively broad recognition even outside the industry. For instance, this year, several giants in traditional finance have ventured into the stablecoin market, including PayPal's PYUSD, BlackRock's collaboration with Ethena on USDb, and VanEck's AUSD (serving regions like Argentina and Southeast Asia).
As Tether and Circle's dominance in this track continues to deepen, new entrants among stablecoin issuers are gradually differentiating into two categories. Firstly, issuers of fiat-backed stablecoins are beginning to turn their attention to emerging markets and specific application scenarios, primarily in South America. Meanwhile, algorithmic stablecoins are generally shifting towards stablecoins that use 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 positions in Cex, while hedge assets will gradually expand from BTC and ETH to higher-risk, lower-liquidity public chain tokens to compete for the remaining sinking markets. As for Usual-type stablecoins, which are backed by medium- to short-term U.S. Treasury bonds, I believe the focus will be more on innovation in protocol tokens and yield methods. In terms of RWA asset types, there are no better choices than medium- to short-term Treasury bonds. 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 decentralization in governance. However, I hope that next year we can see some completely decentralized and non-over-collateralized stablecoin protocols emerge.
III. Payment
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, will become the main infrastructure for payment applications. Traditional payments are already an extremely mature and competitive red ocean market. What kind of transformation can blockchain provide? Firstly, two relatively simple and often mentioned points are to optimize cross-border payments, eliminate pre-financing requirements, making cross-border remittances faster, cheaper, and easier, addressing the issue of trillions of dollars in pre-paid funds in traditional systems. Secondly, serving emerging markets, which I mentioned in previous articles, the application value of stablecoins has already been demonstrated in regions like Africa and Latin America. The strong financial inclusiveness enables residents in 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 the most cutting-edge virtual services.
The concept of 'PayFi' proposed by Solana Foundation manager Lily Liu at the seventh EthCC conference provides more imagination for the combination of blockchain and payments. This concept involves two cores: first, timely settlement, which is T+0 settlement. PayFi can achieve same-day settlement and even multiple settlements per day. The delays and complexities of the traditional financial system that should be involved will be eliminated, significantly improving the speed of fund circulation. Secondly, it is 'Buy Now, Pay Never' (BNPL), for example, a user deposits $50 into a lending product to buy a $5 cup of coffee. 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 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 timing of payments and receipts can be freely controlled (delayed receipts to earn interest, early payments to receive discounts). The methods of earning will also become more diverse; besides the previously mentioned depositing stablecoins into lending products for interest, I personally believe that the types of stablecoins should also allow for easy conversion. In the future, with the large emergence of emerging stablecoins, users can choose the most suitable type of stablecoin at any time based on their individual risk tolerance, thus obtaining both stablecoin protocol tokens and higher stablecoin interest. For DeFi, if this payment system can become mainstream, its growth space will be unimaginably vast.
IV. Dex
As we mentioned in the first section, the fragmentation and lack of interoperability in Layer 2 exist in this development path, which also presents a problem: excessive block space, with Infra's development far surpassing that of Dapps. This issue will prompt the natural elimination of many long-tail chains within a few years, which is also a headache for Ethereum, which cannot receive positive feedback from Layer 2 due to mispricing of DA.
Looking back at this round of counter-cyclical growth, public chains have largely relied on their strong communities, ecosystems, and promotional advantages, providing these advantages to asset issuance platforms to achieve rapid growth in overall TVL. Therefore, not every Layer 2 can replicate this attention economy; the lack of super applications remains a reality to face next year. Following the trend, besides what we mentioned above, the future demand related to AI Agents may be a way out. Other noticeably clear trends in the short term include on-chain order book Dex, privacy, payment-related stacks, decision-making tools, etc.
I personally believe that on-chain order book Dex will become the mainstream in the next generation of Dex. After all, given the complexity of the technical path of AMM's development is continuously increasing, its efficiency gains are becoming more limited, as we mentioned in articles related to Uni. However, for Layer 2, the limitations of performance and Gas are still quite apparent, and improvements in matching algorithms and innovations in Gas schemes will be key challenges.
V. Asset issuance remains the main theme
From 2023 to today, from inscriptions to the current AI Meme platform, the means of asset issuance has been a hot topic over the past year. If we extend this time frame a bit, in fact, the issuance of assets has been the only main theme in the crypto circle since the ICO era. However, the external packaging and the thresholds for issuance are changing. On the positive side, users' gaming needs have driven the advanced development of Infra and DeFi. As this technology becomes widely known and accepted, blockchain has entered the mainstream and integrated into reality. On the negative side, this game has become purer and more absurd, and the reduced difficulty of asset issuance also means that this dark forest is becoming more dangerous. Nowadays, all it takes is a click with an image and a few words to start a grand zero-sum game. Why not steer it back towards a more positive direction? Drive the progress of the industry through this game.
For example, some current AI Memes are starting to shift towards practical agents rather than the early versions of nonsensical AI agents. The recently popular DeSci can also be referred to as the 'scientific version of ICO.' Although its current kernel is driven by Memes, in the long run, DeSci can promote traditional scientific research to be more transparent, easily disseminated, financed, and communicated by combining the various advantages of blockchain. However, whether it can ultimately land and how it evolves still needs a question mark.
In fact, similar ideas to DeSci were also mentioned in my article on 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 asset issuance threshold is too low, with too few restrictions, leading to excessive fundraising capabilities (it can also be said that the entry threshold on the chain is extremely low). How to impose rules to restrict fund usage and force project parties to continuously create truly valuable things is also a key point we should consider.
Let gamers game and builders build; this is the premise for blockchain to continue to develop. Next year, we may see more versions of 'ICO,' but what I hope is that this gaming feast can push forward the next 'DeFi Summer.'
This article comes from a submission and does not represent the views of BlockBeats.
