In this challenging and opportunistic year of 2024, the cryptocurrency market has experienced a tumultuous development process. At the end of the year, the Chopping Block program invited four industry Dragonfly managing partners 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, and MarsBit has compiled the text for 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 called 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 are inspiring. As a VC, we are indeed regretful that we did not participate - in fact, almost all VCs tried to invest in HyperLiquid, but they were all politely declined. This "perfect birth" 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 cryptocurrency founders and companies in the United States. We have witnessed an important turning point: from the previous extreme hostility and resistance, to the current favorable situation. As a U.S. cryptocurrency founder, this change is exciting. Finally, we no longer feel troubled about engaging in the cryptocurrency business in the United States.
Tarun:
I would choose the entire DeFi (Decentralized Finance) field. Remember the 36-month bear market predicted by Degen Spartan earlier? DeFi was once seen as the problem child of the cryptocurrency world, with the valuations of yet-to-be-launched 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, I am indeed relieved to see such developments.
Tom:
My choice may be a bit surprising - it's . They performed exceptionally well this year and can be said to be one of the most profitable companies globally. For many years, many people have been waiting for Tether to collapse or encounter major problems, but the opposite is true - it has become more and more successful and more and more standardized. Tether not only continues to grow, but has also become an important case study for the cryptocurrency industry, especially in terms of stablecoin applications and the global dollarization trend.
The Biggest Losers
Robert:
Without a doubt, the anti-cryptocurrency camp is the biggest loser this year, including some members of both houses of Congress and certain individuals in the executive branch, particularly some members of the SEC and those who have pushed for "Operation Choke Point 2.0". They mistakenly believed that suppressing the cryptocurrency industry would advance their political careers, but it has proven to be a failed strategy. I hope this will change the future political landscape and make political suppression of cryptocurrencies no longer a viable political tactic.
Tarun:
I would say the biggest losers this year are the many second-tier projects and application chains. At the beginning of 2023, the market generally believed that there would be thousands of L2 projects, with each L2 technology 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 that successful applications like would be able to launch their own application chains or L2s, like , but the actual results were not 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 cryptocurrencies is and all technology is meaningless was once prevalent. But the reality is that the trading volume of has dropped significantly from the early 20-30% of total trading 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 were indeed a big loser this year.
Tom:
I would say the biggest losers are those who gave up on cryptocurrencies and switched to artificial intelligence this year. This is a classic case of "the game is over, we're back". When asset prices fell, investors withdrew, developers changed careers, and market sentiment became extremely negative, but cryptocurrencies always come back in different ways. Personally, I know many people who either sold their cryptocurrencies, closed their companies, or switched to other fields. It's unfortunate, because in this field, you really need unwavering belief to succeed. Those who lacked this belief and switched to AI may now be regretting it.
The Biggest Surprises
Tarun:
Without a doubt, the two projects that surprised me the most this year are and . I remember we discussed in our program in January or February this year, when it was just getting started, providing users with an innovative way to create assets. I think if it weren't for , the development of would not have been so rapid. The other one is , a Telegram bot focused on trading. In terms of revenue, BonkBot can be considered a hidden champion, and like , both companies achieved $100 million in revenue in their first year. The speed of development of the infrastructure has really surprised me.
Tom:
The two surprises I want to share are twofold. First, the launch of , a presidential candidate associated with a DeFi token, and the fact that even holds a wallet, is truly unbelievable. But even more surprising is its sales performance. Normally, a regular or would sell out quickly, but this DeFi token associated with the president has only sold 25% and the sales continue to decline. Both of these points were far beyond my expectations.
Additionally, regarding the point Tarun mentioned, I'd like to add a bit. As early as the beginning of 2024, I had predicted that the application layer would generate significant revenue. For example, , , and even have all achieved revenue in the hundreds of millions of dollars, exceeding most DeFi protocols. Although I didn't specifically predict the infrastructure, the applications have indeed performed well, with revenue and profitability exceeding many protocols.
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 game even attracting the attention of the military in Iran. Secondly, there were no major cryptocurrency security incidents (L1/DeFi) this year, indicating a significant improvement in industry security. Although the has rebounded significantly, we have not seen the massive losses of previous years, which is a positive signal.
Robert:
What I would add is the changes at the infrastructure level. The rise of and as infrastructure has been surprising. These two platforms have performed outstandingly in terms of new user activity due 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 think it has to be 's bonding curve and LP locking mechanism. I'm 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 multiple stablecoin projects such as and . 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 an annualized yield of 5%, when only a quarter of the users participate in the allocation, their actual yield can be amplified to 20%. This mechanism has played an important role in the development of , 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 specified terms retained and not translated:From my perspective, there were two outstanding mechanism innovations this year. The first is the liquidity guiding mechanism of 'meme' coins; the second is the innovation related to basis trading, especially the Market Maker Lending Pools. This lending pool can be traced back to the GLP pool launched by GMX at the end of 2021, and now there are also the Jupiter JLP pool on Solana and the HLP pool of HyperLiquid.
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 yield 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 'HyperLiquid' is largely due to this lending pool mechanism. Currently, the scale of the 'Jupiter' 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 GMX is programmatic, with the target weights determined by governance or multi-sig. The HLP of 'HyperLiquid' is directly managed by the project team's strategy. JLP and GLP are similar to AMMs (Automated Market Makers), where anyone can perform arbitrage operations. The key is that this mechanism effectively connects LP users who want to earn yield and traders who need capital for market making.
Best 'Meme'
Haseeb:
I vote for Justin Sun's birthday photo. Everyone may remember this entrepreneur, who is said to be beloved by his employees in our industry, posted a photo on his birthday. This photo was obviously AI-generated, as he had 14 fingers in the photo. This may be one of the most embarrassing moments for one of the most successful entrepreneurs in the crypto industry, but this meme really impressed me, and I think I will remember it for a long time.
Robert:
Although strictly speaking this may not be a typical 'meme', I will give the best 'meme' award to 'Pudgy Penguins'. Perhaps it's because they just launched the 'PENGU' token, with a fully diluted valuation of $5 billion at launch. Although I don't hold any Pudgy Penguins or 'PENGU' tokens, I have to admit their achievement: they have continued to build during the bear market, and through sustained promotion and in-depth operations, they have ultimately achieved great success in turning an ordinary 'meme' into a huge success. Now they have launched penguin plushies, 'meme' coins and other peripheral products, and the community is also thriving.
Tarun:
I will choose 'Bonk'. The main reason is that 'BonkBot' is a genius marketing approach that helped 'Bonk' grow from near zero to a market capitalization of tens of billions of dollars in a year. If there is a 'blue-chip' 'meme' coin in the Solana ecosystem, that would be 'Bonk'.
Tom:
This choice is indeed very difficult, but I would like to nominate 'Hugo Martingale', the Twitter account of a Polymarket intern, whose operation is very excellent. Their content is novel and interesting, and they often come up with 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 'MicroStrategy'. Although their decision to pivot from a mundane business intelligence software company to a Bitcoin-leveraged ETF was made five years ago, 2024 was the year this pivot was truly recognized by the market. Not only did they break through the historical high of the dot-com bubble, but they 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 would like to nominate the 'Babylon' protocol. Although their technical pivot started in 2023, it was only truly realized in 2024. 'Babylon' initially only provided Bitcoin timestamping services for the Cosmos chain, but 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. This is one of the most successful business model pivots I've seen, transforming from a single timestamping service to such a large-scale business.
Tom:
I will nominate the Democratic Party's "Worst Pivot". From the incident at Mar-a-Lago to Biden's executive order on digital assets, to Kamala's ambiguous stance on crypto investments, the whole process has been 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 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 NFT community's pivot to 'meme' coins. For example, Miladys launched the 'CULT' token, and Pudgy Penguins launched 'PENGU', and the market capitalization of these 'meme' coins even exceeded the original NFT projects. Interestingly, this pivot did not provoke community opposition, 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 Ethereum, while 'meme' coins are more developed on Solana, and this natural friction may explain why this pivot came relatively late.
Tom:
Interestingly, we find that in the cryptocurrency field, sometimes simple "vibe coins" are more popular than those tokens that try to create serious value. This seems to prove a principle: when issuing new tokens, there is no need to overly complicate things, as people prefer to have multiple simple tokens rather than a complex conversion mechanism.
Most Disappointing Project
Tom:
I think it is the MakerDAO rebranding to 'Sky'. 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 DAI is still much larger than USDS, 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 DeFi. 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, 'MOTHER' 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 been completely dashed.
Robert:
I want to nominate the decline of the social finance (Social Fi) craze driven by Friend.tech. Earlier this year, Friend.tech 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 the much-sought-after, to the launch of the V2 version and the Friend token, it quickly faded into silence. Now the value of the product and token is almost zero, which may be one of the few truly self-destructive projects. Although projects like Farcaster are still developing, the entire crypto social field is facing huge challenges.
Best Comeback Story of 2024
Tom:
I want to nominate MarsBit. During the cryptocurrency price decline, MarsBit often became the "scapegoat" of the market. In 2023, they laid off thousands of employees, and many people thought they might go bankrupt. But with the launch of the MarsBit ETF, MarsBit, as the custodian of the ETF, has gained new development opportunities. Their overseas business is not particularly outstanding, but 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 MarsBit has been named 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 MarsBit 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 MarsBit ETF ecosystem. After years of rejections and failures, 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 successful launch of the MariBit ETF and the Ethereum ETF. The performance of these ETF products has been quite outstanding, and can be considered a model of resurrection from "death". Although some may think this is more of a "winner" than a "comeback" story, institutions like BlackRock have indeed shown strong strength in this process.
Tarun:
I choose the Move ecosystem as the best comeback story. The market capitalization of Sui reached $50 billion, the Movement startup fund 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 achieved a strong comeback 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 comeback as long as they have the right strategic positioning and execution. This also reflects the resilience and innovation capability of this industry.
2025 Predictions
Haseeb:
I have three predictions. First, MarsBit 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 MarsBit, predicting it will reach $180,000, but without a sharp decline. Secondly, I believe the United States will enact the first dedicated legislation on cryptocurrencies, which will be an important milestone for the industry. Finally, I predict that there will be an AI crypto fraud event that will attract media attention.
Tarun:
My predictions mainly focus on three areas. First, there will be a wave of integration in the application chain and Layer 2 track, 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 crypto 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.
