Original: Unchained
Compiled by: Yuliya, PANews
In this challenging yet opportunistic year of 2024, the cryptocurrency market has experienced a tumultuous development journey. At the end of the year, the Chopping Block program invited four industry leaders - Haseeb Qureshi, Managing Partner of Dragonfly, Tom Schmidt, General Partner of Dragonfly, Robert Leshner, CEO of Superstate, and Tarun Chitra, Managing Partner of Robot Ventures - to review the key moments of the year, and PANews has compiled a transcript of this podcast.
The Biggest Winners
Haseeb:
I believe the biggest winner this year is HyperLiquid. This decentralized perpetual contract trading platform had the most successful token airdrop of the season, which can be considered the 'Uniswap moment' of this cycle. Although there is still a long way to go in true decentralization, their token distribution method and community response have been inspiring. As a VC, we were actually disappointed not to have participated - in fact, almost all VCs tried to invest in HyperLiquid, but they were all politely declined. This 'perfectly born' project is indeed impressive, especially in terms of product capability, execution, and technical delivery.
Robert:
"From my perspective, the biggest winners this year are all the crypto founders and companies in the United States. We have witnessed a pivotal turning point - from the previous extreme hostility and resistance, to the current favorable climate. As a U.S. crypto founder, this change is exhilarating. Finally, we no longer feel burdened by operating a crypto business in the U.S."
Tarun:
"I would choose the entire DeFi (Decentralized Finance) space. Remember the 36-month bear market prediction by Degen Spartan? DeFi was once seen as the problem child of the crypto world, with its undelivered Layer 1 valuations often 10 times that of DeFi projects. But now, DeFi has made a strong comeback. As someone working in the DeFi space, it is gratifying to see this development."
Tom:
My choice might be a bit surprising - it's Tether (USDT). They have performed exceptionally well this year, arguably becoming one of the most profitable companies globally. For years, many have been waiting for Tether to collapse or encounter major issues, but the reality is the opposite - it has become increasingly successful and institutionalized. Tether not only continues to grow, but has also become an important case study for the crypto industry, particularly in terms of stablecoin applications and the global dollarization trend.
The Biggest Losers
Robert:
Without a doubt, the anti-crypto camp is the biggest loser this year, including some members of both houses of Congress and certain individuals in the executive branch, particularly some SEC members and those pushing the 'Dechain 2.0' initiative. They wrongly believed that suppressing the crypto industry would advance their political careers, but it has proven to be a failed strategy. I hope this will change the future political landscape, making political attacks on crypto no longer a viable option.
Tarun:
I would say the biggest losers this year are the many second-tier Layer 2 projects and application chains. At the beginning of 2023, the market generally believed that thousands of L2 projects would emerge, with each L2 tech stack spawning a large number of specialized application chains. But reality has proven this assumption completely wrong. Just look at the ongoing turmoil in the Cosmos ecosystem. Previously, people thought successful applications like Blur would be able to launch their own application chains or L2s, like Blast, but the actual results have not been ideal. Instead, we've seen users tend to concentrate on a few top L2 projects.
Haseeb:
I believe financial nihilism is the biggest loser this year. In the first half of the year, the view that everything in crypto is just meme coins and all the technology is meaningless was once prevalent. But the reality is that the trading volume of meme coins has dropped significantly from the early 20-30% of total volume to now less than 10%. The market has shown more enthusiasm and confidence in real technological innovation and substantive progress. If you believe that all technology is worthless, then you have indeed been a big loser this year.
Tom:
I would say the biggest losers are those who gave up on crypto and moved to AI this year. This is a classic case of 'the game is over, we're back'. When asset prices declined, investors exited, developers switched careers, and market sentiment became extremely negative, but crypto always finds a way to make a comeback. Personally, I know many people who either sold their crypto, shut down their companies, or shifted to other fields. It's unfortunate, because in this space, you really need unwavering conviction to succeed. Those who lacked that conviction and moved to AI are likely regretting it now.
The Biggest Surprises
Tarun:
Without a doubt, the two projects that surprised me the most this year are Pump.fun and BonkBot. I remember we discussed Pump.fun on the show back in January/February, when it was just getting started, providing users with an innovative way to create assets. I believe Pump.fun has been a key driver behind the rapid development of meme coins. The other one is BonkBot, a Telegram bot focused on meme coin trading. In terms of revenue, BonkBot can be considered a hidden champion, and like Pump.fun, it achieved $100 million in revenue in its first year. The speed of development of meme coin infrastructure has truly surprised me.
Tom:
The two surprises I want to share are twofold. First, the launch of World Liberty Financial, where a presidential candidate is associated with a DeFi token, and Trump even holds a wallet, is truly unbelievable. But even more surprising is its sales performance. Normally, a regular meme coin or NFT would sell out quickly, but this DeFi token related to the president has only sold 25% and the sales continue to decline. Both of these points have greatly exceeded my expectations.
Additionally, regarding Tarun's point, I want to add that as early as the beginning of 2024, I had predicted that the application layer would generate significant revenue. For example, Photon, Banana Gun, and even Uniswap have all achieved revenue in the hundreds of millions of dollars, surpassing many DeFi protocols. Although I didn't specifically predict the meme coin infrastructure, the applications have indeed performed well, with impressive revenue and profitability.
Haseeb:
My two biggest surprises are: First, the rise of the 'Tap to Earn' model, which is unexpected, although there is now almost no news about it, such as the Hamster Combat game even catching the attention of the military in Iran. Secondly, the lack of major crypto security incidents (L1/DeFi) this year, which indicates a significant improvement in industry security. Despite the substantial recovery in TVL (Total Value Locked), we haven't seen the massive losses of previous years, which is a positive signal.
Robert:
The change I want to add is at the infrastructure level. The rise of Solana and Base as meme coin infrastructure has been surprising. These two platforms have performed exceptionally well in terms of new user activity, thanks to their low transaction fees and convenient token issuance mechanisms, exceeding expectations in terms of adoption rate and scale.
The Best New Mechanism
Tom:
I believe it has to be Pump's bonding curve and LP locking mechanism. I'm glad to be the first to speak, as I have a feeling this will be a popular choice.
Robert: I think the best mechanism is the 'yield amplification' model, which can be seen in multiple stablecoin projects such as Ethena and Usual. The core idea is to allocate the returns generated by an underlying asset (which can be arbitrage trading, government bonds, or any other asset) to only a portion of users, significantly amplifying the yield. For example, if the underlying strategy has a 5% annualized return, when only a quarter of the users participate in the distribution, their actual yield can be amplified to 20%. This mechanism has played an important role in Ethena's development, and I believe we will see more projects adopt similar mechanisms in the coming months.
Tarun:
Here is the English translation of the text, with the terms in <> retained as is:From my perspective, there were two outstanding mechanism innovations this year. The first is the liquidity guiding mechanism of coins; the second is the innovations related to basis trading, especially the Market Maker Lending Pools. These lending pools can be traced back to the GLP pool launched by at the end of 2021, and now there are also the Jupiter JLP pool on and the HLP pool of .
The innovation of this mechanism lies in solving a key problem of decentralized exchanges: in centralized exchanges, the exchange can directly provide collateral loans to market makers, while decentralized exchanges previously lacked a similar mechanism. Through these lending pools, users seeking yields can deposit their assets into the pool, and perpetual contract traders can borrow these assets for market making and pay fees to the depositing users. This greatly improves the capital efficiency of decentralized perpetual contract trading, which is also one of the important reasons for the current all-time high trading volume of decentralized perpetual contracts.
It is worth mentioning that the rapid development of projects like is largely due to this lending pool mechanism. Currently, the scale of Jupiter's JLP pool has reached $1.5 billion, and these infrastructures provide important support for on-chain basis trading. Although decentralized perpetual contract trading may never be able to fully match the capital efficiency of centralized exchanges, this mechanism has indeed greatly narrowed this gap.
Haseeb:
This is indeed an important innovation. So for the specific operation of these lending pools, such as JLP or HLP, are there specific third parties operating them?
Tarun:
It depends on the specific project. Like the liquidity provision of is programmatic, with the target weights determined by governance or multi-sig. 's HLP is directly managed by the project team's strategy. JLP and GLP are similar to AMMs (Automated Market Makers), and anyone can perform arbitrage operations. The key is that this mechanism effectively connects LP users who want to earn yields and traders who need capital for market making.
Best Meme
Haseeb:
I will vote for Justin Sun's birthday photo. Everyone may remember this entrepreneur who is highly focused in our industry and reportedly beloved by his employees, who posted a photo on his birthday. The photo was clearly AI-generated, as he had 14 fingers in the picture. This may be one of the most embarrassing moments for one of the most successful entrepreneurs in the crypto industry, but the meme really left an impression on me, and I think I will remember it for a long time.
Robert:
Although this may not be a typical meme strictly speaking, I will award the best meme to . Perhaps it's because they just launched the token, with a fully diluted valuation of $5 billion at launch. Although I don't hold any Pudgy Penguins or tokens, I have to admit their achievement: they have continued to build during the bear market, and through persistent promotion and in-depth operations, they have ultimately achieved great success. Now they have launched penguin plushies, meme coins, and other peripheral products, and the community is also thriving.
Tarun:
I will choose . The main reason is that the is a genius marketing approach that helped grow from near zero to a market cap of tens of billions of dollars in a year. If there is a "blue-chip" meme coin in the ecosystem, it would be .
Tom:
This choice is indeed very difficult, but I would like to nominate , the Twitter account of a Polymarket intern, whose content operation is excellent. Their content is novel and interesting, and they often have witty comments, making it a very high-quality account.
Haseeb:
I'm 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 there will be fewer meme coin-related topics next year.
Best/Worst Pivot
Robert:
I will combine the "Best Pivot" and "Best Comeback Story" awards and give them to . Although their decision to pivot from a mediocre business intelligence software company to a Bitcoin-leveraged ETF was made five years ago, 2024 is the year when this pivot was truly recognized by the market. Not only have they surpassed the historical high of the dot-com bubble, but they have also created an amazing business model: by issuing convertible bonds, they can raise funds at a higher premium than Bitcoin, and then continue to buy Bitcoin, forming a perpetual capital circulation mechanism.
Tarun:
I will nominate the protocol. Although their technical pivot started in 2023, it was only truly realized in 2024. initially only provided Bitcoin timestamping services for the chain, and later they developed "remote staking" technology, allowing users to use Bitcoin as collateral for staking. Now their TVL (Total Value Locked) has reached $6 billion. The transformation from a single timestamping service to such a scale of business is one of the most successful business model pivots I have seen.
Tom:
I will nominate the Democratic Party's "Worst Pivot". From the events at Mar-a-Lago involving Trump, to Biden's executive order on digital assets, to Kamala's ambiguous stance on crypto investments, the whole process has been very chaotic. In comparison, Trump took a simple and direct strategy, saying what people wanted to hear and doing what people wanted, such as "Free Ross". The Democrats' performance on this issue was as disappointing as missing a two-inch shot in front of the goal.
Haseeb:
My choice for the best pivot is the transition of NFT communities to coins. For example, launched the token, and launched , and the market caps of these meme coins even surpassed the original NFT projects. Interestingly, this pivot did not provoke opposition from the community, and no one accused them of abandoning NFTs. Although these tokens seem to have no practical use, this pivot strategy has been surprisingly successful. This may be related to the choice of public chain, as many high-quality NFT projects are on , while meme coins are more developed on , and this natural friction may explain why this pivot came relatively late.
Tom:
Interestingly, we find that in the crypto space, sometimes simple "vibe coins" are more popular than those trying to create serious value. This seems to prove a principle: when issuing new tokens, there is no need to overcomplicate things, as people prefer to have multiple simple tokens rather than a complex conversion mechanism.
Most Disappointing Project
Tom:
I think it is the 's rebranding to . The most obvious evidence of failure is that even after the rebranding, people still refer to it as Maker rather than Sky. Although the scale of is still much larger than , it is said that they are considering revoking 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 expectations for Bitcoin L2, expecting them to reach tens of billions of dollars in TVL, believing that the Bitcoin ecosystem would embrace . But the reality is that even with multiple projects launched, they have all become "ghost towns". There is almost no discussion of these projects, and we rarely hear founders say they will launch projects on Bitcoin L2.
In addition, celebrity tokens are also a major failure. There was a time when people thought celebrity tokens would be better than ordinary meme coins because they had celebrity endorsements. For example, belongs to this category. But these are essentially social tokens, and their performance has been extremely poor over time. The market initially thought this would be a huge opportunity, but now it seems that expectation has completely failed.
Robert:
I will nominate and the decline of the Social Fi hype. Earlier this year, was once considered one of the hottest startup projects in the crypto field, but its development cycle was extremely short. From the initial concept to being highly sought after, to launching the V2 version and the token, and finally fading into silence, this may be one of the few truly self-destructing projects. Although projects like are still developing, the entire crypto social field is facing huge challenges.
Best Comeback Story of 2024
Tom:
I want to nominate Coinbase. Coinbase often becomes the "scapegoat" of the market when cryptocurrency prices fall. In 2023, they laid off thousands of employees, and many people believe they may go bankrupt. However, with the launch of the Bitcoin ETF, Coinbase, as the custodian of the ETF, has gained new development opportunities. Although their overseas business is not particularly outstanding, it is steadily growing. In addition, they have obtained a stay of execution in their litigation with the SEC, which can be said to have achieved a series of important victories in 2024. It is worth noting that this is the second consecutive year that Coinbase has been rated as the best recovery story, and this "double recovery" 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, especially in the layout of BRC-20 tokens and Ordinals, they have achieved amazing trading volume. Their performance in the Solana ecosystem is also quite good. They have recently launched a platform token, which can be said to have achieved 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, they finally achieved a breakthrough this year. This is thanks to Grayscale's lawsuit against the SEC and victory, which paved the way for the success of Bitcoin ETFs for Ethereum ETFs. The performance of these ETF products has been quite outstanding, and they can be considered as a model of "resurrection" from "death". Although some may think this is more of a "winner" than a "recovery" story, institutions like BlackRock have indeed shown strong capabilities in this process.
Tarun:
I choose the Move ecosystem as the best recovery story. Sui's market capitalization has reached $50 billion, the Movement Startup Fund has exceeded $5 billion, and many DeFi protocols have also been launched on these public chains. In the third and fourth quarters of 2023, when Solana received a lot of attention, the Move ecosystem seemed to be overlooked. But now they have clearly achieved a strong recovery through improving the user experience and optimizing other features.
Host: From these cases, we can see that even projects that have experienced low points in the cryptocurrency market can achieve a strong recovery if they have the right strategic positioning and execution capabilities. This also reflects the resilience and innovation capabilities of this industry.
2025 Predictions
Haseeb:
I have three predictions. First, Bitcoin will reach $150,000 and then experience a correction; second, DeFi tokens will see explosive growth; third, the prices of AI-related tokens 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, but there will not be a sharp decline. Secondly, I believe the United States will enact the first dedicated cryptocurrency legislation, which will be an important milestone for the industry. Finally, I predict that there will be a crypto fraud event involving AI that will attract media attention.
Tarun:
My predictions are mainly focused on three areas. First, there will be a wave of consolidation in the application chain and Layer 2 tracks, and we may see multiple merger cases, mainly due to high operating costs and concentrated trading volume. Second, the total market capitalization of AI agent-related tokens will increase by at least 5 times, from the current $10 billion to a significant increase. Finally, Solana's inflation rate will be reduced by at least 25%.
Tom:
I also have three predictions. First, money games like Farcaster or "The Button" will achieve mainstream adoption and go viral on platforms like TikTok. Second, new cryptocurrency asset ETFs will be approved, but they may be more traditional coins like XRP or Litecoin, rather than the emerging assets that the crypto community is expecting. Third, we may see a major security incident at the application layer, possibly stemming from supply chain attacks or library vulnerabilities.
