Foreword

Starting from the wave of Bit engraving, the election of the first crypto president has drawn a full stop, and 2024 is about to come to an end. This year, Crypto has experienced an extremely unusual "bull market", with altcoins performing weakly, Meme volume being supreme, and finally everything flowing back to BTC. Overall, although there have been some low points and dissatisfaction, Crypto is indeed moving in a more positive direction. In the coming year of 2025, we also have many directions worth focusing on, and in this article we will combine recent views to make a brief outlook for next year.

I. About AI

At the current stage, blockchain abstract projects often become overly complex in the process of technical implementation due to the pursuit of conceptual perfection, which ultimately affects the user's interaction experience. Projects with Intent architecture are relatively complex in their implementation, whether they are based on centralization (such as TG Bot), structured (a combination of on-chain and off-chain pre-processing), or distributed (such as Solver + Executor architecture) design. These intent projects often have some common problems. For example, users still need to have a considerable understanding of DeFi, the expression of intent must be clear, accurate and simple, and the current intent projects are powerless in the face of users' complex and vague intentions, with a rather limited scope of implementation. So from the middle of 2023 when Paradigm proposed this concept to the present, the so-called intent-centric projects have always been like thunder and rain, and have not been of much help in guiding new users and reducing user operation thresholds. However, we all know that from the development path of Ethereum Layer2, the market's demand for both is still imminent.

Let's review the development of Layer2 in the past few months. Among the leading projects, the Layer2 alliance represented by OP Superchain has been growing stronger, and Zksync's Elastic Chain and Arbitrum Orbit will also eventually form their own alliances along this path. These alliances will be able to achieve direct interconnection within through solutions such as inter-operational clusters in the future, alleviating the current problems of excessive fragmentation and lack of interoperability in the Ethereum Layer2 ecosystem, and the competition of dozens of chains will be narrowed down to competition among multiple forces. But from a broader perspective, with the crypto market gradually improving, new architecture Layer2 projects such as Movement and Fuel are also rushing to launch their own mainnets in an attempt to capture the scarce altcoin market liquidity. For projects below the first echelon, fragmentation and lack of interoperability are still intensifying, and even wallet plugins may not be interoperable due to different architectural designs. Let alone allowing new users to enter, for ordinary blockchain users, the entire Layer2 ecosystem is extremely complex, and the development of non-financial application chains will also face great resistance under such circumstances.

For Ethereum to introduce new users, ecosystem alignment is the biggest prerequisite. An ecosystem that requires users to be half geeks to get started will never welcome "Mass Adoption". Looking at the counter-cyclical development of Solana and Ton this year, the strategy of lowering user thresholds and providing a more consistent and Web2-like user experience has obviously played an important role in ecosystem growth. To put it more directly, all these ecosystems have done besides promotion is to reduce the difficulty of asset issuance and make the use of the chain more transparent. So for Ethereum, a comprehensive solution with experience as the priority is a must, but given the open attitude of Ethereum's core developers, it is naturally impossible to force the entire Layer2 ecosystem to align.

I believe that the solution that can first solve this problem is the AI browser agent. Even in the early days of the emergence of ChatGPT, many people have envisioned the innovation of AI in APP interaction, which can span multiple APPs and form a comprehensive super APP. Taking tourism as a more common example, the AI can automatically complete ticket booking, customize travel routes, arrange meals and time, etc. after receiving the user's travel needs. If this AI also has long-term memory, it can also arrange more suitable plans based on this memory.

Now, Google is about to launch the AI browser agent Project Mariner driven by Gemini. In the demo shown by Jaclyn Konzelmann, the director of Google's research lab, after installing the AI agent extension in the Chrome browser, a chat window will pop 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". Then the AI agent will automatically navigate to a grocery platform and add the items to the shopping cart, and the user will check out on their own (the agent does not have payment authority). Similar products will also be launched by OpenAI next month.

It is worth mentioning that although Google's Project Mariner is currently only available to selected testers, I have already experienced similar agents developed by some Crypto projects for ordinary users. From a few hours of trial use, the agent's accuracy in implementing complex and vague intentions can currently reach 60-70% (the cursor operation speed is relatively slow), and it can independently complete operations such as token trading on various DEXs on different chains and even cross-asset transfers from Ethereum to Layer2. In this process, all I need to do is inform it of the intent and enter the wallet password.

Of course, this base still needs to call the API of the centralized model, so what kind of collision will Crypto have with it? I think the AI browser agent will not only become a better experience-oriented intent solution, but will also drive the outbreak of AI wallets, decentralized computing power, and decentralized data projects next year.

Think about a simple question, why was the concept of Agent not realized until today in the rapid development of AI in recent years? In fact, by looking back at the development of OpenAI, it is not difficult to find that the development of pure language models is always faster than that of image generation models, because the Internet itself is a huge corpus that can provide endless text materials for training, and the limitation of language model development is more about computing power and energy. Agents require a lot of manual labeling and feedback, and the reasoning process is expensive. Crypto naturally has the ability to obtain labor through incentives. In this economic system, top-level users can provide a large amount of labeled data and feedback to obtain Tokens through decentralized means, and the bottom layer can also integrate decentralized computing power and data projects, and after training, integrate with wallets and DeFi projects through SDKs to realize truly AI wallets, forming a closed loop. Other ideas about AI agents can also be derived from this, because any AI agent applicable to Web3 will need computing power, labeling, and feedback to "grow".

II. Stablecoins

Stablecoins are always a battleground, and also a track with extremely high thresholds in Crypto. Regarding its application value, it has already gained relatively widespread recognition even outside the industry. For example, this year, several giants in the traditional finance field have also entered the stablecoin market, including PayPal's PYUSD, BlackRock and Ethena's USDb, and VanEck's AUSD (serving Argentina, Southeast Asia and other regions).

As Tether and Circle continue to deepen their dominance in this track, new entrants in the stablecoin issuance space are also gradually differentiated into two categories. First, issuers of fiat-backed stablecoins are starting to turn their attention to emerging markets, mainly in South America, and specific application scenarios, while algorithmic stablecoins have also generally shifted to using low-risk financial products as underlying assets, such as the Ethena and Usual we mentioned in the previous article. From the trend, next year there will be more delta-neutral stablecoins competing for the short-selling liquidity in Cex, and the hedging assets will gradually expand from BTC and ETH to the tokens of riskier and less liquid public chains to compete for the remaining downside market. As for the Usual-type stablecoins with short-term US Treasuries as the underlying assets, I think more innovation will be in the protocol tokens and revenue models, and there is no better choice than short-term Treasuries in the types of RWA assets, but compared to the limited liquidity in Cex, the competition of such stablecoins will be smaller and the upside space will be larger.

Overall, the development of stablecoins is gradually moving towards more stable underlying assets and decentralized governance. However, I hope that next year will see the emergence of some fully decentralized and non-overcollateralized stablecoin protocols.

III. Payments

With the compliance and accelerated adoption of stablecoins in various countries, the downstream payment track of stablecoins will also become a new competitive focus, and heterogeneous public chains such as Solana and Move with high TPS and low Gas will become the main infrastructure for payment applications. Traditional payments have already become an extremely mature and involutionary red ocean market, what kind of revolution can blockchain provide? First, there are two relatively simple and often mentioned points: one is to optimize cross-border payments, eliminate the requirement for pre-financing, making cross-border remittances faster, cheaper and easier, solving the problem of trillions of dollars in pre-paid funds in the traditional system. The second is to serve emerging markets, which I have mentioned in my previous articles. In regions such as Asia, Africa and Latin America, the application value of stablecoins has already been demonstrated, with strong financial inclusiveness allowing residents of third-world countries to effectively cope with the high inflation caused by government instability, and through stablecoins they can also participate in some global financial activities and subscribe to the world's most cutting-edge virtual service subscriptions.

The concept of "PayFi" proposed by Solana Foundation manager Lily Liu at the 7th EthCC conference provides more imagination for the combination of blockchain and payments, involving two core aspects: first, real-time settlement, i.e. T+0 settlement, PayFi can realize same-day settlement, or even multiple settlements per day, eliminating the delays and complexities of the traditional financial system involved in the entire process, greatly improving the speed of capital circulation. Secondly, Buy Now, Pay Never, for example, a user deposits $50 into a lending product and buys a $5 coffee. Once the accumulated interest reaches $5, the interest will be used to pay for the coffee, and the funds will be unlocked and returned to the user's account.

And there are many more ideas that can be extended from this, such as the financing needs of emerging projects can form a more secure and transparent inflow and outflow in the blockchain through PayFi, currency exchange in tourism no longer needs to rely on various physical financial institutions, and the freedom to control payment and collection time (delayed collection to earn interest, early payment to get discounts). The ways of earning will also become more diversified, in addition to depositing stablecoins into lending products to earn interest as mentioned above, I personally think that the types of stablecoins should also be allowed to be freely converted. In the future, with the emergence of a large number of new stablecoins, users can choose the most suitable stablecoin type at any time according to their risk tolerance, so as to obtain both stablecoin protocol tokens and higher stablecoin interest. For DeFi, if this payment system can become mainstream, its growth potential will be unimaginably huge.

IV. Dex

We have already mentioned the fragmentation and lack of interoperability of Layer2 in the first section, and this development path actually has another problem, which is the oversupply of block space, with the development of Infra far exceeding the development of Dapp. This problem will lead to the natural elimination of a large number of long-tail chains within a few years, which is also an extremely troublesome problem for Ethereum, which has failed to get the positive feedback of Layer2 due to improper DA pricing.

Looking back at the counter-cyclical growth of public chains, they have basically relied on their own strong community, ecology, and promotion advantages, and supplied these advantages to asset issuance platforms to achieve rapid overall TVL growth. So it's not that every Layer2 can replicate this eyeball economy, and the lack of killer apps is still a reality problem to be faced next year. Going with the wind, in addition to what we mentioned above, the future demand for AI Agents may be a way out. In the short term, other relatively obvious trends include on-chain order book Dex, privacy, payment-related stacks, and decision-making tools.

I am more optimistic that on-chain order book Dex will become the mainstream of the next generation of Dex, after all, from the development of AMM, the complexity of its technical path is constantly doubling, but the efficiency is becoming more and more limited, which we have also mentioned in the articles related to Uni. It's just that for the second layer, the limitations of performance and Gas are still very obvious, and the improvement of the matching algorithm and the innovation of the Gas solution will become the key challenges.

V. Asset Issuance is Still the Main Melody

From 23 to the present day, that is, from Meme to the current AI Meme platform, the way of providing asset issuance has been the hotspot of the past year. If we extend this time span a little further, in fact, from the ICO era to the present, asset issuance can be considered the only main melody in the crypto circle. It's just that the external packaging and the threshold of issuance are changing. From a positive perspective, the gaming needs of users have driven the advanced development of Infra and DeFi, and with this technology being known and recognized by the public, blockchain has been able to enter the mainstream and integrate with reality. From a negative perspective, this game has become more pure and absurd, and the decline in the difficulty of asset issuance also means that this dark forest is becoming more dangerous. Nowadays, it only takes a simple touch with a picture and a few words to start a grand zero-sum game, why don't we guide it back to a more positive side? To promote the progress of the industry in the game.

For example, some of the current AI Memes are also starting to shift towards the development of practical Agents, rather than the early version of AI Agents that talked nonsense. The recently popular DeSci can also be called the "ICO version of scientific research", and although the current core is driven by Meme, in the long run, the combination of blockchain's various advantages can make traditional scientific research more transparent, easier to spread, easier to finance, and easier to communicate. But whether it can be implemented and how it will evolve still needs a question mark.

In fact, similar ideas like DeSci, I have also mentioned in my article on GameFi, such as how to effectively promote the development of independent games through blockchain financing in the case of independent game capital and personnel shortages. The problem with blockchain financing is that the threshold for asset issuance is too low and the restrictions are too few, and the fundraising capability is too strong (or it can be said that the entry threshold on the chain is extremely low). How to restrict the use of funds through rules, forcing project parties to constantly create truly valuable things, is also a focus we should think about.

Let the players play, let the builders move forward, is the premise for blockchain to continue to develop. Next year, we may see more versions of "ICO", but what I hope for is that in this feast of gaming, we can push out the next "DeFi Summer".

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