Written by: Unchained
Organized by: Yuliya, PANews
In this challenging yet opportunity-filled year of 2024, the cryptocurrency market has experienced a tumultuous journey. At the year's end, the Chopping Block program invited four industry leaders—Dragonfly Managing Partner Haseeb Qureshi, Dragonfly General Partner Tom Schmidt, Superstate CEO Robert Leshner, and Robot Ventures Managing Partner Tarun Chitra—to review the key moments of the year, with PANews providing a written compilation of this podcast.
Biggest Winner
Haseeb:
I believe the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform executed the most successful token airdrop of the season, marking it as the 'Uniswap moment' of this cycle. Although there is still a long way to go in true decentralization, its token distribution method and community response have been exhilarating. As a VC, we do regret not being able to participate—indeed, almost all VCs tried to invest in HyperLiquid, but they were all turned down. Such a perfectly birthed project is truly impressive, especially in terms of product capability, execution, and technical delivery.
Robert:
From my perspective, the biggest winners this year are all cryptocurrency founders and companies in the United States. We have witnessed an important turning point: from the extreme hostility and resistance faced before to the favorable situation we see now. As an American cryptocurrency founder, this shift is exhilarating. Finally, we no longer have to feel troubled by engaging in the cryptocurrency business in the U.S.
Tarun:
I want to choose the entire DeFi (Decentralized Finance) field. Remember the 36-month bear market predicted by Degen Spartan? DeFi was once viewed as the problem child of the cryptocurrency world, with valuations of unlaunched public chains often ten times that of DeFi projects. But now, DeFi has made a strong comeback. As someone who has been working in the DeFi field, seeing such development is indeed gratifying.
Tom:
My choice may be a bit unexpected—it's Tether (USDT). They have performed exceptionally well this year and can be said to be one of the most profitable companies globally. For years, many have been waiting for Tether to collapse or encounter significant problems, but the opposite has happened; it has become increasingly successful and more regulated. Tether not only continues to grow but has also become an important case in the cryptocurrency industry, especially in terms of stablecoin applications and the global dollarization trend.
Biggest Loser
Robert:
Undoubtedly, the anti-crypto camp is this year's biggest loser, including some members in both houses of Congress and certain individuals in the executive branch, particularly some members of the SEC and those pushing for Chain Break 2.0. They mistakenly believed that suppressing the cryptocurrency industry would advance their political careers, but it has proven to be a completely failed strategy. I hope this can change the political landscape in the future, making political repression against cryptocurrency no longer a viable political tool.
Tarun:
I want to say that the biggest losers this year are many second-tier Layer 2 projects and application chains. At the beginning of 2023, the market generally believed that there would be thousands of L2 projects, and each L2 tech stack would spawn a large number of specific-use application chains. But the reality has proven that this assumption is completely wrong. Just look at the continued turmoil in the Cosmos ecosystem. Previously, people thought successful applications like Blur could launch their own application chains or L2s, like Blast, but the results have not been ideal. Instead, we see users prefer to concentrate on a few top L2 projects.
Haseeb:
I believe that financial nihilism is this year's biggest loser. In the first half of this year, the view that everything in cryptocurrency is a meme coin and that all technology is meaningless was once prevalent. But the reality is that the trading volume of meme coins has significantly dropped from the early 20-30% of total trading volume to now 10% or even lower. The market has shown more enthusiasm and confidence in genuine technological innovation and substantial progress. If you believe that all technology is worthless, then you have indeed been a big loser this year.
Tom:
I want to say that the biggest losers are those who abandoned crypto this year to jump into AI. This is a classic case of the game ending, and we're back. When asset prices fall, investors leave, developers switch careers, and market sentiment turns extremely negative, but cryptocurrency always comes back in different ways. I personally know many people who either sold their cryptocurrency, closed their companies, or moved to other fields. It is unfortunate because in this field, you really need strong conviction to succeed. Those who lack that conviction and jumped to AI may regret it now.
Biggest Surprise
Tarun:
Undoubtedly, the two projects that surprised me the most this year are Pump.fun and BonkBot. Remember we discussed Pump.fun back in January and February this year on the program when it was just starting, providing users with an innovative way to create assets? I believe without Pump.fun, the development of meme coins would not have been so rapid. The other is BonkBot, a Telegram bot focused on meme coin trading. In terms of revenue, BonkBot is an invisible champion, achieving 100 million dollars in revenue in its first year, similar to Pump.fun. The speed of development for meme coin infrastructures has indeed taken me by surprise.
Tom:
The surprises I want to share have two aspects. First is the launch of World Liberty Financial, where a presidential candidate is associated with a DeFi token, and Trump even holds a wallet; this situation is indeed unbelievable. But more surprisingly is its sales performance. Normally, ordinary meme coins or NFTs can sell out in a short time, but this presidential-related DeFi token only sold 25%, and sales continued to decline. Both of these points greatly exceeded my expectations.
Additionally, regarding the viewpoint mentioned by Tarun, I want to add that I predicted early in 2024 that the application layer would generate a lot of revenue. For example, Photon, Banana Gun, and even Uniswap have all achieved revenues in the hundreds of millions, surpassing most DeFi protocols. Although I did not specifically predict meme coin infrastructures, applications have indeed performed excellently, with revenues and profitability exceeding many protocols.
Haseeb:
My two biggest surprises are: first, the rise of the 'Tap to earn' model was unexpected, even though there are almost no updates now, such as the Hamster Combat game attracting military attention in Iran. Secondly, there were no significant security incidents in cryptocurrency this year (L1/DeFi), indicating a significant improvement in industry security. Despite TVL (Total Value Locked) rebounding significantly, we did not see the huge losses of previous years, which is a positive signal.
Robert:
I want to add the changes at the infrastructure level. The rise of Solana and Base as meme coin infrastructures is surprising. These two platforms have performed outstandingly in new user activity due to low transaction fees and convenient token issuance mechanisms, exceeding expectations in terms of adoption speed and scale.
Best New Mechanism
Tom:
I think it must be the binding curve and LP lock-in mechanism of Pump. I am glad to be the first to speak because I have a feeling this will be a popular choice.
Robert: I believe the best mechanism is the 'yield amplification' model, which can be seen in various stablecoin projects like Ethena and Usual. Its core is to allocate the earnings generated by a specific underlying asset (which can be arbitrage trading, treasury bonds, or any asset) to only a portion of users, significantly amplifying the yield. For example, if the annualized yield of the underlying strategy is 5%, when only a quarter of the users participate in the allocation, the yield actually obtained by those users can be amplified to 20%. This mechanism has played an important role in the development of Ethena, and I believe we will see more projects adopting similar mechanisms in the coming months.
Tarun:
From my perspective, there are two outstanding mechanisms innovations this year. The first is the liquidity guidance mechanism for meme coins; the second is innovations related to basis trading, especially market maker lending pools. These lending pools can be traced back to the GLP pool launched by GMX at the end of 2021, and now have evolved into Jupiter's JLP pool and HyperLiquid's HLP pool.
The innovation of this mechanism lies in solving a key problem for decentralized exchanges: while centralized exchanges can directly provide collateral loans to market makers, decentralized exchanges previously lacked a similar mechanism. Through these lending pools, users seeking yields can deposit assets into the pool, and perpetual contract traders can borrow these assets for market making, paying fees to deposit users. This greatly enhances the capital efficiency of decentralized perpetual contract trading and is one of the key reasons for the historic surge in decentralized perpetual contract trading volume.
It is worth mentioning that projects like HyperLiquid can develop rapidly largely due to this lending pool mechanism. Currently, the scale of Jupiter's JLP pool has reached 1.5 billion dollars, and these infrastructures provide essential support for on-chain basis trading. Although decentralized perpetual contract trading may never fully match centralized exchanges in capital efficiency, this mechanism has indeed greatly narrowed that gap.
Haseeb:
This is indeed an important innovation. So how do these lending pools operate specifically, such as JLP or HLP? Is there a specific third party operating them?
Tarun:
This depends on the specific project. For example, GMX's liquidity provision is programmatic, with target weights decided by governance or multi-signatures. HyperLiquid's HLP, on the other hand, is directly managed by the project team. JLP and GLP are similar to AMM (automated market makers), where anyone can engage in arbitrage. The key is that this mechanism effectively connects LP users seeking yields and traders needing funds for market making.
Best Meme
Haseeb:
I voted for Justin Sun's birthday photo. You might remember this entrepreneur, who is highly regarded in our industry and reportedly loved by employees, posted a photo on his birthday. This photo was obviously AI-generated, as he had 14 fingers in it. This may be one of the most embarrassing moments for one of the most successful entrepreneurs in the crypto industry, but this meme indeed impressed me, and I think I will remember it for a long time.
Robert:
Although this may not strictly count as a typical meme, I want to award the best meme to Pudgy Penguins. Perhaps because they just launched the PENGU token, which reached a fully diluted valuation of 5 billion dollars at launch. Although I do not hold any Pudgy Penguins or PENGU tokens, I must admit their achievements: they have continued building during the bear market, turning an ordinary meme through ongoing promotion and deep operation into significant success. Now they have launched penguin dolls, meme coins, and other peripheral products, and the community is thriving.
Tarun:
I want to choose Bonk. Primarily because BonkBot is a genius marketing strategy that helped Bonk grow from near-zero to a multi-billion dollar market cap within a year. If we talk about the most successful 'blue-chip' meme coin within the Solana ecosystem, it would be Bonk.
Tom:
This choice is indeed difficult, but I want to nominate Hugo Martingale, the operator of the Polymarket intern Twitter account, for their outstanding performance. Their content is fresh and interesting, often delivering witty remarks in the comments section, making it a very high-quality account.
Haseeb:
I am glad to see that not everyone chose meme coins. To be honest, we may have discussed meme coins too much this year, and I hope we can have fewer discussions about meme coins next year.
Best / Worst Transformation
Robert:
I want to combine the awards for 'Best Transformation' and 'Best Comeback Story' and give them to MicroStrategy. Although their transition from a mediocre business intelligence software company to a Bitcoin leveraged ETF was decided five years ago, 2024 is the year that this transformation is truly recognized by the market. They not only broke through historical highs from the dot-com bubble period but also created an astonishing business model: by issuing convertible bonds to obtain funding at a higher premium than Bitcoin, and then continuing to buy Bitcoin, forming a perpetual funding cycle.
Tarun:
I want to nominate the Babylon protocol. Although their transformation technically began in 2023, it didn't really materialize until 2024. Babylon initially only provided Bitcoin timestamp services for the Cosmos chain, but later developed the 'remote staking' technology, allowing users to use Bitcoin as collateral for staking. Their TVL (Total Value Locked) has now reached 6 billion dollars. This transition from a single timestamp service to such a large-scale business is one of the most successful business model transformations I have ever seen.
Tom:
I want to nominate the Democratic Party's 'worst transformation.' From the events involving Trump at Mar-a-Lago to Biden's issuance of executive statements related to digital assets, to Kamala's ambiguous remarks on cryptocurrency investments, the entire process seems very chaotic. In contrast, Trump took a simple and direct strategy, saying what people wanted to hear and doing what people wanted, such as 'Free Ross.' The Democratic Party's performance on this issue is as disappointing as shooting two inches wide of the goal.
Haseeb:
The best transformation I chose is the shift of the NFT community to meme coins. For example, Miladys launched the CULT token, and Pudgy Penguins launched PENGU, with the market cap of these meme coins even surpassing the original NFT projects. Interestingly, this transformation did not provoke opposition from the community; no one accused them of straying from NFTs. Although these tokens seem to have no practical use, this transformation strategy has surprisingly succeeded. This may relate to the choice of public chains, as many quality NFT projects are on Ethereum, while meme coins have developed more on Solana, which might explain why this transformation came relatively late.
Tom:
Interestingly, we found that in the cryptocurrency field, sometimes simple 'vibe coins' are more popular than tokens that try to create serious value. This seems to prove a point: when issuing new tokens, there's no need to complicate things; people prefer to have multiple simple tokens rather than a complex conversion mechanism.
Most Disappointing Project
Tom:
I think it is the rebranding plan of MakerDAO to Sky. The most obvious evidence of this failure is that even after the rebranding, people still refer to it as Maker instead of Sky. Although DAI's scale is still much larger than USDS, it is said they are considering rolling back this rebranding, which is clearly an unnecessary and ineffective decision.
Haseeb:
I choose Bitcoin L2 projects as the biggest failure. At the beginning of the year, the market had high hopes for Bitcoin L2, expecting it to reach billions in TVL and believing that the Bitcoin ecosystem would embrace DeFi. But the reality is that even with multiple projects launching, they have turned into 'ghost towns.' Very few people discuss these projects, and rarely do we hear founders expressing intentions to launch projects on Bitcoin L2.
Additionally, celebrity tokens are also a major failure. There was a time when people thought celebrity tokens would perform better than ordinary meme coins because of celebrity endorsements. For example, MOTHER belongs to this category. But these are essentially social tokens, and their performance has been extremely poor over time. Initially, the market thought this would become a huge opportunity, but it now seems that expectation has completely fallen short.
Robert:
I want to nominate the fall of Friend.tech and the social finance (Social Fi) craze it sparked. Earlier this year, Friend.tech was once considered the hottest startup in the crypto field, but its development cycle was extremely short. From the initial concept to being hotly pursued, to launching version 2 and the Friend token, and finally quickly fading into silence. Now the value of the product and the token has almost gone to zero, making it one of the few truly self-destructive projects. While projects like Farcaster are still developing, the entire crypto social field faces immense challenges.
2024 Best Comeback Story
Tom:
I want to nominate Coinbase. Often, Coinbase becomes the market's 'punching bag' when cryptocurrency prices drop. In 2023, they laid off thousands of employees, and many believe they might go bankrupt. However, with the launch of Bitcoin ETFs, Coinbase has gained new opportunities as a custodian for ETFs. Their overseas business, while not particularly prominent, is steadily growing. Furthermore, they have obtained a stay in their litigation with the SEC, which can be said to represent a series of important victories in 2024. Notably, this is Coinbase's second consecutive year being recognized as the best comeback story, and this 'double comeback' is indeed impressive.
Haseeb:
I want to nominate Magic Eden. They were once considered the 'second-tier' NFT trading platform after OpenSea and Blur. But by entering the Bitcoin ecosystem, particularly in BRC-20 tokens and Ordinals, they have achieved astonishing trading volumes. They have also performed quite well in the Solana ecosystem. Recently, they launched a platform token, which can be said to represent a perfect transformation.
Robert:
In addition to the previously mentioned MicroStrategy, I also want to nominate the entire Bitcoin ETF ecosystem. After years of rejection and failure, this year finally saw a breakthrough. This is thanks to Grayscale suing the SEC and winning, paving the way for Bitcoin ETFs and Ethereum ETFs. These ETF products have all performed quite well and can be considered a model of resurrection from 'death.' Although some may think this is more of a 'winner' story rather than a 'comeback' story, institutions like BlackRock have indeed demonstrated strong capabilities in the process.
Tarun:
I choose the Move ecosystem as the best comeback story. Sui's market cap has reached 50 billion dollars, Movement has over 5 billion dollars in initial funding, and many DeFi protocols have been launched on these public chains. In the third and fourth quarters of 2023, while Solana garnered a lot of attention, the Move ecosystem seemed to be overlooked. However, they have clearly achieved a strong recovery through improvements in user experience and other optimizations.
Host: From these cases, we can see that in the cryptocurrency market, even projects that have gone through lows have the potential for a strong comeback as long as they have the right strategic positioning and execution. This also reflects the resilience and innovation capabilities of this industry.
2025 Predictions
Haseeb:
I have three predictions. First, Bitcoin will touch 150,000 dollars and then experience a pullback; second, DeFi tokens will see explosive growth; third, AI-related token prices will rise significantly, but the actual application of the underlying protocols may be relatively limited.
Robert:
I am more optimistic about Bitcoin, predicting it will reach 180,000 dollars, but without a sharp pullback. Secondly, I believe the U.S. will introduce specialized legislation on cryptocurrency for the first time, which will be an important milestone for the industry. Finally, I predict that there will be a media-focused AI crypto scam event.
Tarun:
My predictions mainly focus on three aspects. First, the application chain and L2 track will see a wave of consolidation, and we may see multiple merger cases, mainly due to high operating costs and transaction volume concentration issues. Secondly, the total market cap of AI agent-related tokens will increase at least fivefold, significantly rising from the current 10 billion dollars. Lastly, Solana's inflation rate will be reduced by at least 25%.
Tom:
I also have three predictions. First, money games like Farcaster or 'buttons' will achieve mainstream acceptance and go viral on platforms like TikTok. Second, new crypto asset ETFs will be approved, but they are likely to be relatively traditional coins like XRP or Litecoin rather than the emerging assets that the crypto community is looking forward to. Finally, we may see a significant security incident at the application layer, possibly stemming from supply chain attacks or library vulnerabilities.
