Random Thoughts 2024: 20 Predictions for the Crypto Market

The 2024 predictions are purely conjectures and contain many biases. They cannot be used as investment advice. They are only for entertainment and do not need to be taken seriously.

1. L2 will continue to be one of the most important narratives of 2024. With the arrival of the dencun upgrade, the substantial drop in L2 fees will lead to the explosion of the L2 ecosystem. On L2, in addition to games, perp, defi, nft, social, depin, etc. will also usher in an explosive period.
2. L2s such as arb, op, zksync, starknet and blast compete with other public chains in all aspects, and with the implementation of EIP-4844 and the evolution of the DA layer, they are on par with high-performance public chains in terms of cost and speed. Arbitrum and Solana's ecological competition will be an important highlight in 2024.
3. zksync will launch an economic mechanism in 2024 and become an important force promoting the explosion of L2.
4. If starknet achieves a breakthrough, it will start from the full-chain game narrative.
5. There will be one L2 project with a diluted total market value exceeding US$100 billion in 2024; under optimistic circumstances, there will be an L2 project with a diluted total market value exceeding US$300 billion during the peak period of the cycle. The final structure of the L2 market cannot yet be determined in 2024, but it will be basically finalized after this cycle.
6. The btc ecology has opened the magic box after the inscription battle. Many teams are exploring expansion, including the decentralization of the index, the evolution of the inscription system, decentralized cross-chain, zk proof, L2 and many other explorations. Once obtained, In terms of progress, firstly, its own ecology will develop; secondly, the integration with the Ethereum ecology will also accelerate. The exploration of Bitcoin ecology is one of the most striking evolutions of this cycle.
7. Ethereum L1 has gradually evolved into a B2B chain. Most of the interactions of ordinary users will occur on L2/L3 and a few high-performance L1s. Ethereum has gradually become the underlying asset in the encryption field. At the same time, with the evolution of modular blockchain, Ethereum will become the most important settlement layer, and most of the execution layer and part of the DA layer will be outsourced. But in the end, due to the bottom-level security requirements, ETH will still capture the overall The value of ecological growth.
8. As predicted in 2023, modularity will still be an important narrative in 2024, especially at the DA level where there will be fierce competition. The Ethereum re-pledge field will also enter the DA layer for competition. In the field of modularization, the cosmos ecosystem and the Ethereum ecosystem compete and merge. There will be competition between third-party DA and native DA. Before danksharding was implemented, the urgent market demand of L2 led to a certain scale of demand for third-party DA.
9. In addition to the Ethereum and BTC ecosystems, the cosmos and solana ecosystems will also continue to develop, which is consistent with the prediction at the beginning of last year. Cosmos will advance through modularity; Solana will advance through applications. In addition, as the modular blockchain matures, one of Solana's evolutionary directions is to participate in the broader encryption ecosystem like other L2s, and its integration with Ethereum will be higher, thereby capturing greater value.
10. Web3 games have achieved breakthroughs in L2/L3 (arb, starknet, etc.), and one game has more than one million users (this has not been achieved in 2023, but it should be mature in 2024). Arb-based game chains will become the forefront of web3 game breakthroughs. Magic will be launched in 2024 with the interoperability of game chain + more games, which will have important implications for the evolution of web3 games.
11. In addition to integrating nft dex, nft lending, and blast, blur is expected to enter nft perp this year, and even the nft market of L2, btc, and sol ecology. Blur still has the opportunity to play one of the most important industry disruptors in 2024.
12. In addition to the explosion of projects on L2, the Ethereum ecosystem is expected to produce large-scale deflation, thereby achieving value capture. Unlike other L1 chain additional issuance + fees that go to miners for security expenses, all new additions and fees are fed back to staking and holding users, which will encourage more users to pledge/re-pledge, thereby further locking in the eth in circulation.
13. Perp in defi will develop on a large scale in 2024, and snx, gmx, gns, dydx, etc. will all generate at least 5 times the transaction volume in 2023; perp may not be an important narrative in the bull market, but it is likely to be the best game in terms of fundamentals One of the ways.
14. The advancement of modular blockchain and cross-chain technology will lead to the integration of the Ethereum ecology, the Bitcoin ecology, and the Solana ecology. This cycle will see the emergence of many currently unknown projects. According to the current ecological evolution of Bitcoin, one of the paths may be Ethereum carrying the second layer of Bitcoin. If it comes true, the integration of Bitcoin and Ethereum will gradually increase. No matter what, the expansion of Bitcoin needs to follow its own native path. Similar to protocols like atomicals, if AVM can be built, it will have an important impact on the development of Bitcoin ecology.
15. depin has made some breakthroughs in solana and arbitrum. This track is still in the early stages of construction, and more exploratory projects will come out.
16. AI is still a long way from actual implementation, but it does not affect it from becoming one of the important narratives in 2024. AI protocols based on L2 and high-performance public chains will gradually emerge.
17. The Ethereum remortgage track will become one of the major narratives at some point this year.
18. NFT, MEME, and inscriptions will recover at some point, which will also bring about an increase in NFT DEX trading volume and provide a market basis for the launch of NFT Perp.
19. Some celebrities have entered the fields of nft, meme, and inscriptions.
20. With the development of L2 and the exploration of high-frequency applications, smart contract wallets have the opportunity to start to emerge in 2024.
21. Risk warning: All the above analysis is only a one-sided observation of technology and market, and may not be correct. Please be sure to maintain your own judgment and do a good job in risk control.