Compiled by: Daisy, Mars Finance
Editor's Note: Based on insights from its partners in the fields of artificial intelligence, US dynamics, bio/health, crypto, enterprise technology, fintech, gaming, infrastructure, and other areas, a16z has released an annual "major innovations" comprehensive list for technology builders to explore in the coming year. The following are some of the expectations of the a16z crypto team for future development. For information on 2025 policies, regulations, and more, please refer to the relevant article from November 2024.
Artificial Intelligence Needs Its Own Wallet to Achieve Autonomous Behavior
As artificial intelligence (AI) gradually transitions from "non-player characters" (NPCs) to "protagonists", they will begin to act as agents. However, until recently, AI has not been able to truly act autonomously. Currently, they still cannot participate in market activities in a verifiable autonomous manner (i.e., non-human controlled), such as exchanging value, revealing preferences, coordinating resources, and so on.
As we have seen, AI agents (such as @truth_terminal) can engage in transactions using cryptocurrencies, which has brought various opportunities for creative content. However, AI agents have even greater potential, not only to better fulfill human intentions, but also to become independent network participants. When AI agents begin to manage their own crypto wallets, signing keys, and crypto assets, we will see many interesting new use cases emerge. These use cases include AI operating or validating nodes in decentralized physical infrastructure networks (DePIN), such as playing a role in distributed energy systems. Other possibilities include AI agents becoming true high-value game players, and even the potential emergence of the first AI-owned and operated blockchain.
Entering the "Decentralized Autonomous Chatbots"
In addition to AI having wallets, there is another type of AI chatbot running in a trusted execution environment (TEE). The TEE provides an isolated environment in which to execute applications, enabling more secure distributed system designs. But in this case, the TEE is used to prove that the chatbot is autonomous, rather than controlled by a human operator.
Further expanding, the next major innovation will be what we call decentralized autonomous chatbots (DACs, note the distinction from decentralized autonomous corporations (DACs)). Such chatbots can attract followers by publishing engaging content (whether for entertainment or information). They will build fan communities on decentralized social media; earn revenue from audiences in various ways; and manage their assets in cryptocurrencies. The relevant keys will be managed in a TEE that also runs the chatbot software, meaning that no one other than that software can access those keys.
As the risks evolve, a regulatory framework may be needed. But the key point here is decentralization: the chatbot runs on a permissionless set of nodes, coordinated by a consensus protocol, and it may even become the first truly autonomous billion-dollar entity.
As More People Use AI, We Need Unique "Identity Proofs"
In a world filled with online impersonation, fraud, multiple identities, deep fakes, and other AI-generated content that is real yet deceptive, we need "identity proofs" - a way to help us verify that we are interacting with real people. However, the new problem here is not false content; it is that we can now produce this content at a much lower cost. AI has dramatically reduced the marginal cost of producing content containing all the cues we use to judge whether something is "real".
Therefore, we need methods to privately associate content with individual digital identities more than ever before. "Identity proofs" are a crucial foundation for establishing digital identities. But here, they become a mechanism for increasing the marginal cost of attacking individuals or undermining the integrity of the network: obtaining a unique ID is free for humans, but expensive and difficult for AI.
This is why the privacy-preserving "uniqueness" property becomes the next major innovation in building networks we can trust. It is not just about proving identity, but fundamentally changing the cost structure for malicious actors to attack. Thus, "uniqueness" - or "Sybil resistance" - is an inviolable feature of any identity proof system.
From Prediction Markets to Better Information Aggregation Mechanisms
Prediction markets took center stage in the 2024 US elections, but as an economist who studies market design, I believe the revolution in 2025 will not be in prediction markets themselves. Instead, prediction markets have paved the way for more distributed, technology-based information aggregation mechanisms - mechanisms that can be applied to areas ranging from community governance and sensor networks to finance.
The past year has proven the concept, but it's important to note that prediction markets are not always the best way to aggregate information: even for global, "macro" events, they may be unreliable; for more "micro" questions, the prediction pools may be too small to generate meaningful signals. However, researchers and technologists have had decades of design frameworks to incentivize people to truthfully share what they know in different information environments - from data pricing and purchase mechanisms to "Bayesian truth serum" to guide subjective assessments, many of which have already been applied in crypto projects.
Blockchains have been a natural choice for implementing these mechanisms - not only because they are decentralized, but because they enable open, auditable incentive structures. More importantly, blockchains can also make the results public, allowing everyone to interpret them in real-time.
Enterprises Will Increasingly Accept Stablecoins as a Payment Method
Stablecoins have found a product-market fit in the past year - not surprisingly, as they are the cheapest way to send US dollars, enabling fast global payments. Stablecoins also provide a more accessible platform for entrepreneurs to build new payment products: no intermediaries, minimal balance requirements, or proprietary SDKs. However, large enterprises have yet to realize the significant cost savings and new revenue opportunities that can be unlocked by switching to these payment systems.
While we've seen some enterprise interest in stablecoins (as well as early adoption for peer-to-peer payments), I expect a larger wave of experimentation in 2025. Small/medium-sized businesses with strong brands, captive customer bases, and high payment costs - like restaurants, coffee shops, and convenience stores - will be among the first to abandon credit cards. They cannot benefit from credit card fraud protection (since the transactions are face-to-face), and are most impacted by transaction fees (30 cents per cup of coffee in fees means a huge profit loss!).
We should also expect to see large enterprises start adopting stablecoins. If stablecoins truly accelerate the historical development of banking, enterprises will try to disintermediate payment providers - directly adding 2% to their bottom line. Enterprises will also start seeking new solutions to the services currently provided by credit card companies, such as fraud protection and identity verification.
Countries Exploring Putting Government Bonds on the Blockchain
Putting government bonds on the blockchain will create a government-backed, interest-bearing digital asset - without the surveillance concerns of central bank digital currencies (CBDCs). These products can unlock new sources of demand as collateral in decentralized finance (DeFi) lending and derivatives protocols, adding more credibility and robustness to these ecosystems.
Therefore, as governments supportive of innovation further explore the benefits and efficiencies of public, permissionless, and irreversible blockchains, some countries may attempt to issue blockchain-based government bonds this year. For example, the UK has already explored digital securities through the FCA's (Financial Conduct Authority) sandbox; its Treasury has also expressed interest in issuing digital gift certificates.
In the US - given the SEC's (Securities and Exchange Commission) plans next year to require government bond clearing through traditional, cumbersome, and costly infrastructure - there are likely to be more discussions about how blockchains can increase the transparency, efficiency, and participation in bond trading.
We will see broader adoption of "DUNA", a new U.S. blockchain industry standard
In 2024, Wyoming passed a new law recognizing decentralized autonomous organizations (DAOs) as legal entities. DUNA (Decentralized Unincorporated Nonprofit Associations) is specifically designed to support decentralized governance of blockchain networks and is the only viable structure for U.S. native projects. By incorporating DUNA into the decentralized legal entity structure, crypto projects and other decentralized communities can provide legal legitimacy for their DAOs - not only enabling greater economic activity, but also protecting token holders from liability and helping manage tax and compliance requirements.
DAOs - communities managing open blockchain network affairs - are a necessary tool to ensure networks remain open, non-discriminatory, and do not extract value unfairly. DUNA can unlock the potential of DAOs, with multiple projects already implementing it. As the U.S. is poised to foster and accelerate the growth of its crypto ecosystem in 2025, I expect DUNA to become the standard for U.S. projects. We also anticipate other states adopting similar structures (Wyoming was a pioneer; they were also the first to adopt the now-ubiquitous LLC) - especially as decentralized applications beyond crypto (such as physical infrastructure/energy grids) emerge.
Online Liquid Democracy Comes to the Real World
With growing dissatisfaction with current governance and voting systems, there is now a window of opportunity to experiment with new, technology-driven modes of governance - not just online, but in the real world. I've written before about how DAOs and other decentralized communities can allow us to study political systems, behaviors, and rapidly evolving governance experiments at scale. But what if we could apply those learnings to governance in the real world through blockchain?
We can finally leverage blockchain for secure, private election voting, starting with low-risk pilot projects to address concerns around cybersecurity and auditing. But more importantly, blockchain will also enable us to experiment with "liquid democracy" at the local level - a way for people to directly vote on issues, or delegate their votes to others. This idea was originally proposed by Lewis Carroll (the author of "Alice in Wonderland", and a prolific researcher on voting systems); however, it wasn't scalable... until now. Advancements in computation and connectivity, as well as blockchain technology, have made new forms of representative democracy possible. Crypto projects have already been applying this concept, and generated a wealth of data on how these systems operate - check out the results of our recent research - which can serve as a reference for local governments and communities.
Builders Will Reuse Infrastructure, Not Just Reinvent It
Over the past year, teams have continued to "reinvent the wheel" in the blockchain technology stack - another custom set of validators, consensus protocol implementation, execution engine, programming language, RPC API. While these results may improve on certain specific functionalities, they often lack in broader or more fundamental capabilities. Take for example a programming language specifically designed for SNARKs (Succinct Non-interactive Arguments of Knowledge): while the ideal implementation may allow more efficient SNARK generation for the ideal developer, in practice it may be inferior to general-purpose languages (at least for now) in terms of compiler optimizations, developer tooling, online learning materials, AI programming support, and may even result in less performant SNARKs.
Therefore, I expect more teams will leverage others' contributions in 2025, reusing more off-the-shelf blockchain infrastructure components - from consensus protocols, existing staked capital, to proof systems. This approach not only helps builders save a tremendous amount of time and effort, but also allows them to focus on continuously enhancing the differentiated value of their product/service.
The infrastructure is now in place to build mainstream-ready Web3 products and services. Like other industries, these products and services will be built by teams that can successfully navigate the complex supply chain, not those who dismiss "not invented here".
Crypto Companies Will Start with the End-User Experience, Not Let Infrastructure Dictate It
While the blockchain technology infrastructure is fascinating and diverse, many crypto companies are not just choosing their infrastructure - in a sense, the infrastructure is choosing them, influencing the end-user experience (UX) as a result. This is because specific technology choices at the infrastructure layer directly relate to the user experience (UX) of the blockchain product/service.
But I believe the industry will overcome this potential ideological hurdle: that technology should dictate the final user experience, rather than the other way around. By 2025, more crypto product designers will start from the desired end-user experience, and then choose the appropriate infrastructure from there. Crypto startups no longer need to overly focus on specific infrastructure decisions before finding product-market fit - they can focus on truly finding product-market fit.
We will no longer get bogged down in specific EIPs, wallet providers, intent architectures, etc., but can abstract these choices into a holistic, full-stack, plug-and-play way. The industry is ready for this: a rich programmable blockchain landscape, mature development tools, and chain abstraction are starting to enable more people to design crypto products. Most end-users don't care what language a product is written in, they just care how to use it daily. In the crypto industry, this will start to happen as well.
"Hiding the Plumbing" Will Help Drive Web3's Killer Apps
The technical superpowers of blockchain make it unique, but these capabilities also act as barriers to mainstream adoption to some degree. For creators and fans, blockchain unlocks possibilities for connectivity, ownership, and monetization... but the industry jargon (like "Non-Fungible Tokens", "zkRollups", etc.) and complex designs set up hurdles for those who could benefit the most from these technologies. I've deeply felt this when discussing Web3 with many executives in media, music, and fashion.
The widespread adoption of many consumer technologies has followed a similar path: starting with the technology; some iconic companies/designers abstracting away the complexity; this process helping unlock certain breakthrough applications. Think about how email started - the SMTP protocol was hidden behind a "Send" button; or credit cards, where most users today don't even care about the payment rails. Similarly, Spotify fundamentally changed the music industry by delivering playlists to our fingertips, not by flaunting file formats. As Nassim Taleb observed, "Overengineering leads to fragility. Simplicity scales."
So I believe our industry will adopt the notion of "hiding the plumbing" by 2025. The best decentralized applications have already started focusing on more intuitive interfaces, aiming to make usage as simple as tapping a screen or swiping a card. In 2025, we'll see more companies designing simple, clearly communicating; successful products don't explain, they solve problems.
The Crypto Industry Finally Has Its Own App Stores and Discovery Channels
When crypto apps are walled off by centralized platforms like the Apple App Store or Google Play, it limits their ability to reach top users. However, we're now seeing some new app stores and marketplaces providing this distribution and discovery channel, without gatekeeper barriers. For example, Worldcoin's World App marketplace - which not only stores identity verification information, but also allows access to "mini-apps" - attracted thousands of users to multiple apps in just a few days. Another example is Solana mobile users' fee-free dApp store. These examples also showcase how hardware, not just software - like phones, spherical devices - may be a key advantage for crypto app stores... just as Apple devices were an early advantage for the app ecosystem.
Meanwhile, there are other stores offering thousands of decentralized apps and Web3 development tools, covering popular blockchain ecosystems (e.g. Alchemy); and blockchains themselves acting as publishers and distributors of games (like Ronin). However, this is not always fun and games: if a product is already distributed on existing platforms - say, on messaging apps - migrating it on-chain is extremely difficult (exception: Telegram/TON network). The same applies for apps with significant Web2 distribution channels. But we may see more of these migrations happen by 2025.
Crypto Asset Holders Transitioning to Crypto Users
In 2024, crypto has made significant progress as a political movement, with key policymakers and politicians expressing positive views about it. We also see it developing as a financial movement (e.g., the expansion of Bitcoin and Ethereum ETPs has increased investor participation channels). By 2025, crypto should further evolve into a computing movement. But where will these new users come from?
I believe now is the time to re-engage the current "passive" holders of crypto and convert them into more active users, as only 5%-10% of crypto holders are actively using crypto. We can bring the 617 million people who already own crypto into the blockchain, especially as blockchain infrastructure continues to improve, transaction fees decrease, and the user experience is enhanced. This means new applications will start to emerge, attracting both existing and new users. At the same time, some of the early applications we've seen - covering stablecoins, DeFi, Non-Fungible Tokens, gaming, social, DePIN, DAOs, and prediction markets - are also starting to become more palatable for mainstream users as the community has driven their adoption while focusing on user experience and other improvements.
Various Industries May Start Tokenizing "Unconventional" Assets
As the crypto industry infrastructure matures and other emerging technologies drive it, the practice of tokenizing assets will spread across various industries. This will make previously deemed untouchable assets - whether due to high costs or lack of perceived value factors - not only potentially liquid, but more importantly, able to participate in the global economy. AI engines can also use this information as unique data sets.
Just as the shale gas revolution unlocked previously inaccessible oil reserves, tokenizing unconventional assets may redefine income generation in the digital age. Seemingly science-fiction scenarios become more plausible: for example, individuals could tokenize their biometric data; then lease this information to companies through smart contracts. We've already seen early examples, like how DeSci companies are using blockchain technology to bring more ownership, transparency, and consent to medical data collection. These types of developments allow people to leverage previously untapped assets in a decentralized way - rather than relying on governments and centralized intermediaries to provide them with these resources.
