introduction

In 2024, the global crypto market has undergone profound changes and multiple challenges. From the approval of the spot Bitcoin ETF at the beginning of the year, to market volatility, Bitcoin L2 and ETH L2 technology innovations, the outbreak of Meme and AI Agent tracks, to the popularization of decentralized applications (DApp), this year is undoubtedly a year of continuous evolution in the crypto industry. Although the macroeconomic environment is complex, the demand for crypto assets remains strong, and decentralized finance (DeFi), Web3 technology, Layer 2 expansion solutions, AI Agents and innovative projects continue to lead the industry's cutting-edge development.

At the same time, the deep involvement of traditional financial institutions and enterprises has further promoted the mainstreaming process of the crypto industry. The approval of spot Bitcoin ETFs, the massive influx of institutional funds, and the innovation of financial products based on RWA have made the crypto market present a diversified development pattern in recovery and innovation in 2024. According to market data, the total market value of the crypto market in 2024 has climbed from US$1 trillion at the beginning of the year to US$4 trillion, with an annual growth rate of up to 300%, marking that the industry has entered a new stage of development driven by technological breakthroughs and market expansion.

Entering 2025, the global economic environment and the crypto industry will still face more uncertainties. In this context, how the market can seek innovative breakthroughs within regulatory constraints has become a key issue affecting the sustainable development of the industry. As a deep participant in the Web3 industry, Web3Port combines its own business practices and industry insights to systematically sort out the core changes in the crypto market in 2024 and make a forward-looking outlook on market trends in 2025. We hope that this report can provide industry practitioners with clear market insights, help them make wise decisions in a rapidly changing environment, and promote the healthy and sustainable development of the Web3 ecosystem.

Part 1: Summary of the Crypto Market in 2024

1. Market Overview and Performance

After experiencing the historic surge in 2021 and the market winter in 2022, 2024 is the year when the crypto market gradually recovers and continues to grow. Despite external challenges such as inflationary pressure, rising interest rates and geopolitical risks facing the global economy and financial markets, the crypto market still shows relatively strong resilience and has become an emerging direction for capital hedging. Overall, the market presents the characteristics of "restorative growth" and "technological innovation driven".

1.1 Market size and market value fluctuations

In 2024, the total market value of the crypto market showed a recovery in growth. From Q4 2023 to the end of 2024, the total market value of the cryptocurrency market continued to grow from $1 trillion to $4 trillion, a cumulative increase of 300%.

As the market leader and core driving force, Bitcoin (BTC)'s total market value exceeded US$1 trillion in Q2 2024, and in Q4, driven by positive news from Trump's campaign, its price exceeded US$100,000 for the first time, with a market value of more than US$2 trillion.

At the same time, BTC's market share (market share of the top 10 cryptocurrencies) has also further increased, currently exceeding 55%, consolidating its dominant position in the crypto industry. Although ETH has also achieved development in 2024, its overall trend is significantly weaker than BTC, and its exchange rate against BTC continues to weaken, facing uncertainty. The other top 100 Altcoin can only outperform BTC. In the absence of ETH's outbreak, the Altcoin market lacks momentum and market speculation basis, the market volatility is obvious, and the money-making effect is weak.

1.2 ETF & Institutional Investor Participation

In 2024, one of the most notable features of the crypto market is the deepening participation of institutional investors. Against the backdrop of uncertainty in the traditional financial market, more and more traditional financial institutions have begun to pay attention to and deploy crypto assets. Many large financial institutions have entered the crypto market and provided a variety of financial products and services, further promoting the maturity and standardization of the market.

• Approval of spot Bitcoin ETFs : On January 11, 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs at the same time. The approval of Bitcoin spot ETFs has facilitated institutional investors to invest in the crypto market. Currently, the market value of Bitcoin ETFs has reached $110.494 billion, with a total asset management scale of $111.858 billion, accounting for 5.89% of the total market value of BTC.

• Participation of payment giants and banks : PayPal began to provide payment and storage services for Bitcoin and other cryptocurrencies in 2024, and launched the PYUSD stablecoin. Institutions such as BlackRock have also increased their investment in the crypto market, especially in Bitcoin ETFs and blockchain infrastructure, becoming a highlight of the market. These institutions not only brought funds to the crypto market, but also promoted the market's compliance process.
• Innovation of institutionalized financial products : In 2024, the crypto derivatives market will further develop, and institutional investors will gradually show strong interest in derivatives such as crypto futures, options and ETFs. Bitcoin ETFs and Ethereum futures contracts have become important investment tools. The launch of these products, especially in the US market, has laid the foundation for the traditional financialization of crypto assets.

1.3 Continued growth of decentralized finance (DeFi)

Decentralized Finance (DeFi) remains one of the key highlights of the crypto market in 2024. The DeFi ecosystem continues to expand and is showing growth momentum in both transaction volume and user base. Especially on the Ethereum network, innovations and applications of DeFi protocols are emerging in an endless stream. DeFi not only involves basic financial services such as lending, trading, and liquidity mining, but also gradually extends to complex financial products such as insurance, derivatives trading, and algorithmic trading, demonstrating its potential to surpass the traditional financial system.

In 2024, the total value locked (TVL) of the DeFi market showed a steady upward trend, rising from $54B at the beginning of the year to nearly $140B, reaching about 80% of the 2021-2022 DeFi summer bull market.

Mainstream DeFi protocols such as Aave, Uniswap, and Compound have completed technical upgrades in 2024, improving the efficiency and user experience of their products. For example, Uniswap launched a new generation of automated market makers (AMM) in 2024, which improved the liquidity and efficiency of transactions and attracted more users to participate. Aave's TVL has reached a record high, breaking through $20B, exceeding the $20B TVL at its peak in 2022.

In 2024, the concept of decentralized stablecoins has gradually become a core component of the DeFi ecosystem. The application of decentralized stablecoins such as Dai and Frax in DeFi lending, payment and exchange has gradually increased, promoting the stability and practicality of decentralized finance. At the same time, the market value of USDe launched by the new stablecoin project Ethena exceeded $5.9B, and the market value of USD0 launched by Usual.money exceeded $1.7B, contributing new liquidity to the DeFi ecosystem. Most of the TVL and revenue of mainstream DeFi protocols such as Aave, Maker, Morpho, Pendle, etc. come from projects such as Ethena and Usual.money.

1.4 The explosion of MemeCoin and AI

In 2024, MemeCoin and AI tracks outperformed other narratives and became the two tracks with the highest returns in the crypto market. Coingecko's data also proves this:

The development of meme distribution platforms, trading bots and market tools, led by Pump.Fun, has promoted the meme craze. Its overall development has gained most of the market's attention, with GOAT as the starting point of the AI ​​Meme narrative, AI launch platforms (Virtual, GRIFFAIN, Clanker) as the outbreak, and AI frameworks (Ai16z & ELIZA, zerebro, swarm) as the climax.

As the MemeCoin and Ai track markets grow, they are no longer tools for short-term speculation, but become important narrative tracks, market trends and driving forces in the crypto market.

1.5 Market Fluctuations and Macroeconomic Impacts

In 2024, the uncertainty of the global economic and financial environment will still have a significant impact on the crypto market. The volatility of global stock markets, the strength of the US dollar, and changes in central bank policies are still important external factors affecting the crypto market. The price fluctuations of mainstream crypto assets such as Bitcoin and Ethereum often synchronize with the fluctuations of traditional financial markets (US stock indexes), especially when the macro economy is unstable, the crypto market often faces greater pressure.

Overall, the crypto market in 2024 has maintained a delicate balance between volatility and growth. Internal driving factors such as the continued influx of institutional funds, the maturity of decentralized finance (DeFi), and innovation in the NFT field, together with the external policy environment, have shaped the main tone of market recovery.

Spot Bitcoin ETF Approval

On January 11, 2024, the U.S. Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs at the same time. This milestone event paved the way for institutional investors to enter the crypto market and had a profound impact on the development of the industry. The launch of ETFs has made Bitcoin a more mainstream and recognized investment tool, promoting the further maturity of the crypto market.

The launch of the spot Bitcoin ETF not only lowers the threshold for traditional institutions to enter the crypto asset field, but also marks a major shift in the attitude of regulators towards the crypto market. The approval of the ETF is considered to be one of the key factors that pushed the price of Bitcoin to a record high, further consolidating its position as digital gold in the minds of investors.

US interest rate cut and its market impact

Since March 2022, the U.S. Federal Reserve (Fed) has started a new round of interest rate hikes, with a total of 11 rate hikes, raising the federal funds rate to a range of 5.25%-5.50%, the highest level since 2007.

In 2024, the U.S. Federal Reserve (Fed) ended the interest rate hike cycle since March 2022 and started the process of interest rate cuts. The Fed cut interest rates by 50 basis points for the first time in September 2024, and then cut interest rates by 25 basis points again in November and December, reducing the federal funds rate range from 5.25%~5.5% to 4.75%~5%, a total reduction of 1 percentage point, the lowest level in two years.

The U.S. interest rate hike and cut cycle has a profound impact on the crypto market:

• Interest rate hike phase: increased market volatility, compressed the liquidity of risky assets, and put the crypto market under certain pressure.
• Interest rate cut phase: eased the tight liquidity situation in the market, attracted more funds to flow into crypto assets, and stimulated the market recovery.

The interest rate cut policy has also driven up the prices of major crypto assets including Bitcoin and Ethereum, while also driving capital flows into areas such as decentralized finance (DeFi) and the tokenization of real-world assets (RWA).

The Crypto Effect of Trump’s Election as US President

On November 6, 2024, Trump successfully defeated Harris and was elected as the new President of the United States. This result is seen as an important positive for the crypto industry. During the campaign, Trump promised to support the development of cryptocurrencies and was hailed as the first "Bitcoin President" in the United States.

Since Trump's victory, the price of Bitcoin has risen sharply from $70,000 to over $100,000 in just a few weeks, and its market value has reached a record high of $2 trillion. Driven by this positive news, the mainstream currency and a few Altcoin markets have risen across the board, and market sentiment has clearly warmed up, ushering in a new round of rising cycle.

Trump's crypto-friendly policies, including promoting the clarification of the regulatory framework and promoting the inflow of institutional funds, have injected confidence into the development of the industry and further promoted the United States to become an innovation center for global crypto assets.

2. Hot Tracks and Technological Innovation

In 2024, multiple tracks in the crypto market showed significant development momentum, covering decentralized finance (DeFi), Layer 2 solutions, Bitcoin L2, MemeCoin track, AI+blockchain, real world assets (RWA) and stablecoins, TON ecology and other fields. These tracks not only promoted technological innovation in the crypto market, but also greatly expanded the actual application scenarios of blockchain technology, laying a solid foundation for future market growth.

2.1 Continued Expansion of Decentralized Finance (DeFi)

As an important part of the crypto market, decentralized finance (DeFi) showed a strong expansion trend in 2024. It is not only limited to transactions and liquidity mining, but also penetrates into lending, derivatives, re-pledge and liquidity aggregation, as well as stablecoins and other fields, promoting the decentralization and innovation of financial services.

• Decentralized Exchanges (DEX) and the Evolution of Liquidity Pools

In 2024, decentralized exchanges (DEX) further improved user experience and market efficiency through technology upgrades and mechanism optimization. For example, Uniswap V4 introduced a dynamic liquidity pool management mechanism, which enables liquidity providers to dynamically adjust asset allocation according to market fluctuations, significantly improving profitability.

At the same time, cross-chain transactions and multi-chain support have become important trends in the development of DEX. The launch of cross-chain message & protocol mainnet and tokens represented by LayerZero and Wormhole provide underlying support for the efficient transfer of assets between multiple chains. Cross-chain bridge projects (such as Stargate, Hop Exchange, Across, Synapse Bridge, etc.) have achieved significant growth this year, making important contributions to the overall benefits and interoperability of DeFi.

Through cross-chain protocols and cross-chain bridges, DEX trading pairs are not limited to a single blockchain network, and assets between multiple blockchains can flow freely. This cross-chain liquidity greatly improves the overall benefits of DeFi and enhances the interoperability of blockchain applications.

• Innovation of decentralized lending platform

Decentralized lending platforms continue to grow in 2024, especially projects such as Aave, MakerDAO, and Morpho, which have made multiple innovations in lending, leverage, and staking. Aave further reduced borrowing costs in 2024 through a dynamic adjustment mechanism, helping users obtain more flexible financing options in different market environments. Morpho and Aave not only significantly increased their TVL by integrating Ethena's sUSDe, but also obtained a higher source of income. MakerDAO and Aave continue to exert their strength in the RWA market, allowing collateralized lending of RWA assets, pushing up their TVL and asset liquidity levels.

The transparency and flexibility of decentralized lending are providing important financial support to people around the world who cannot access traditional financial services. It is expected that with the development of decentralized identity (DID) and credit scoring systems, DeFi lending will become an important part of global financial services in the future.

• The explosion of decentralized derivatives platforms

Thanks to the development of Layer2 solutions, the decentralized derivatives market will continue to grow in 2024. Innovative liquidity incentive models represented by GMX will become the mainstream of the market. The order book and AMM mechanisms will gradually merge. The old derivatives platform Dydx will improve its market competitiveness through the application chain. Among them, SynFutures and Hyperliquid have achieved rapid development in 2024, and their market share has been greatly improved. In particular, Hyperliquid has performed particularly well, and its market share in the derivatives market has gradually jumped to the first place.

Hyperliquid created a new wave of airdrop wealth effect by airdropping 31% of its tokens (worth about $1.8 billion at the TGE listing price) directly to the community (rather than allocating them to venture capital institutions). This innovative community-oriented distribution model broke the VC-dominated market structure and stimulated the loyalty and participation of community users. This behavior attracted a large amount of funds (billions of dollars) to cross-chain to the Hyperliquid platform, further driving the spot assets on the platform to increase by 10 to 100 times, forming a strong capital aggregation effect and market attention.

• The outbreak of LRT track

The explosion of the LRT track is an important narrative in the DeFi field in 2024. This narrative was triggered by EigenLayer and produced two sub-ecosystems.

EigenLayer is a restaking protocol based on Ethereum, which allows users to restake ETH, lsdETH and LP Token on other side chains, oracles, middleware, etc., as nodes and receive verification rewards. Third-party projects can enjoy the security of the ETH mainnet, and ETH stakers can also get more benefits, achieving a win-win situation.

Around the EigenLayer ecosystem, LRT (liquid re-staking) track projects have emerged, including Ether.fi , Puffer Finance, Kelp DAO, etc. In order to compete for market resources (ETH staking), these LRT track projects have launched LRT Wars through airdrop points, multiple airdrop incentives, etc. At its peak, the TVL staked on the EigenLayer network exceeded $20.12B, and the ETH staked exceeded 3.88M ETH. At present, the EigenLayer mainnet has been launched, and the popular projects in the LRT track have also been launched. The overall market performance is biased compared to the ultra-high market popularity it has generated.

At the same time, EigenLayer also gave birth to the AVS (Actively Validated Services) active verification service ecosystem through re-staking and pooling security, including EigenDA, AltLayer, Brevis, Lagrange, Omni Network, Automata and other ecological projects. However, the overall development of the AVS track is currently average, and the actual demand scenarios are not yet fully mature.

• Liquidity aggregation trend

The outbreak of the LRT track has triggered a trend of liquidity aggregation in DeFi protocols and products. In order to grab the liquidity and market share of crypto assets in the market, liquidity aggregation products have appeared in the market, such as the full-chain liquidity public chain Uniswap unichain, Zircuit pledge chain, the cross-chain market StakeStone based on LST liquidity, and various DeFi liquidity aggregation protocols. These projects have significantly improved the availability and profitability of DeFi products by integrating multi-chain assets and liquidity.

2.2 Innovation and Development of Layer 2 Solutions

In 2024, the Layer 2 (L2) ecosystem has entered a critical development period and has become one of the most dynamic areas in the Ethereum and other public chain ecosystems. Through technological innovation and ecological expansion, L2 has not only alleviated the scalability bottleneck of blockchain, but also provided efficient and low-cost solutions for scenarios such as decentralized finance (DeFi), NFT transactions, and on-chain games, further promoting the popularization of blockchain applications.

Ethereum Layer 2 mainly includes two technical routes: Optimistic Rollups and zk-Rollups. In 2024, Optimistic Rollups continued to develop steadily under the leadership of Arbitrum, Optimism and Base, while zk-Rollups' advantages in transaction efficiency and privacy protection promoted its rapid rise and became an important growth point in the Layer 2 track.

• Ethereum Layer 2 competition intensifies

In 2023, Optimism and Arbitrum, which use the Optimistic Rollups technology solution, successively issued coins and built ecosystems, occupying a dominant position in Layer 2. However, in 2024, zk-Rollups projects including Manta, Starknet, ZKsync, and Scroll successively issued coins and built ecosystems, and the zk-Rollups technology solution has developed rapidly, squeezing out the ecological space of Optimism and Arbitrum.

• Base Chain Outbreak

With the support of Coinbase's traffic, the Base chain's total value locked (TVL) increased by $1.8 billion in one year, accounting for 35.17% of the Layer 2 market, becoming the market share leader. The Base chain also supports MemeCoin and AI ecological projects, becoming an active ecological base camp on par with Solana.

• The rise of zk-Rollups

zk-Rollups has achieved rapid development in 2024 with the technical advantages of zero-knowledge proof (zk-SNARKs). zk-Rollups achieve more efficient transaction verification by compressing transaction data while ensuring privacy protection. Representative projects such as zkSync, StarkWare, Manta and Scroll have not only attracted a large number of developers and capital, but also improved market competitiveness through strong ecological expansion.

zkSync has further consolidated its ecological foundation by supporting more DeFi protocols, NFT markets, and decentralized data storage projects through the continuous upgrade of the zkSync Era network. StarkWare's StarkNet solves the computing bottleneck of zk-SNARKs through zk-STARK technology, while reducing the resource consumption of transaction verification, attracting widespread attention from developers.

• Multi-chain interoperability and RaaS services

In 2024, the Layer 2 ecosystem will develop towards multi-chain interoperability and service-oriented development. Optimism has achieved efficient collaboration and intercommunication between multiple L2 networks through the Superchain model, while zkSync is also developing cross-chain solutions to support seamless intercommunication of assets and data between different networks. Other mature L2s, including Polygon ( Polygon CDK ), Arbitrum, Starkware, etc., have also promoted large-scale adoption by providing or announcing the open source of their proprietary technologies.

On this basis, RaaS (Rollup as a Service) providers have emerged. RaaS providers simplify the operation process of the Rollup chain and provide developers with one-click access or creation of Rollup services, including node operation, infrastructure management, sorting, indexing and analysis functions. Representative projects include:

• Conduit and Nexus Network: Connect to Optimistic Rollups (such as Optimism and Arbitrum);
• Truezk and Karnot: Focus on zk-Rollups technology stack;
• Caldera and AltLayer: Providing integration services across Optimistic and zk-Rollups.

These services significantly lower the technical threshold for developers, promoting the rapid expansion of the L2 ecosystem and the enrichment of application scenarios.

2.3 Bitcoin Inscription and the Outbreak of L2

In 2024, Bitcoin Inscription and Bitcoin Layer 2 (L2) tracks showed completely different development trends: the popularity of the Inscription protocol quickly faded after the initial boom, while the Bitcoin L2 track showed growth potential, but the overall market size was still relatively limited.

Bitcoin inscription:

Thanks to Bitcoin's progress in key technologies (such as SegWit, Bech32 encoding, Taproot upgrade and Schnorr signature), the transaction efficiency, scalability and programmability of the Bitcoin network have been significantly improved. These technological innovations provide a technical foundation for the explosion of the inscription ecosystem and have spawned a series of inscription protocols, including Ordinals & BRC20, Atomical & ARC20, Rune & Pipe and Taproot Assets.

However, the growth momentum of the Bitcoin inscription ecosystem has gradually slowed down in 2024: although the inscription infrastructure (such as wallets, asset issuance platforms, and cross-chain bridges) has made some progress at the technical level, the transaction volume and user activity of inscription assets have dropped significantly. Binance’s recent decision to withdraw from the inscription market further reflects the current dilemma of this track. The inscription protocol has failed to continue to attract market enthusiasm, and the ecological development has stagnated. Whether its narrative can be revitalized in the future remains to be seen.

Bitcoin L2:

With the outbreak of Bitcoin inscription ecology, the growth of asset trading and cross-chain demand for various inscription assets has indirectly promoted the development of Bitcoin L2 ecology. Compared with Ethereum, BTC L2 track started late, but in 2024, a number of traditional and emerging L2 projects emerged, trying to promote Bitcoin ecology into the field of decentralized finance (DeFi) and smart contracts through scalability solutions.

• Continued development of traditional L2 projects: Old projects such as Lightning Network, Stacks, Rootstock, Liquid Network, etc. have gradually expanded to a wider range of application areas such as payment, DeFi, and cross-chain asset management by optimizing infrastructure.
• Emergence of new BTC L2 projects: With the help of Ethereum EVM technology, new Bitcoin L2 projects such as BitVM, Bsquare (B² Network), Bitlayer, BEVM, BounceBit, DLC, BOB, Botanix, etc. have emerged one after another. According to L2 Watch statistics, there are currently 50+ BTC L2 projects on the market.

Although the Bitcoin L2 track has made some progress in technology development and the number of projects, its market performance is still limited. By the end of 2024, the total value locked (TVL) on the Bitcoin chain will grow to approximately US$6.372 billion, but compared with the TVL of US$66.11 billion on the Ethereum chain, the gap is still obvious. In addition, there are few BTC L2 projects that can achieve breakthroughs in market voice, asset size, and user base. Currently, projects with on-chain TVL exceeding US$100 million include Bitlayer, BSquared, Rootstock, BOB, Merlin, and Stacks. Popular BTC DeFi protocols include Babylon (TVL exceeding US$5 billion), Solv Protocol (on-chain TVL exceeding US$1 billion), and Avalon Labs.

2.4 MemeCoin Track Explodes

In 2024, the outbreak of MemeCoin is the strongest narrative driver in the crypto market. As the MemeCoin market continues to expand, they have transformed from an early meme culture hype tool to an important narrative track and market trend in the crypto market, becoming an important force driving the development of the crypto industry.

According to CoinMarketCap data, the total market value of the entire MemeCoin market has reached $9.738 billion , accounting for about 2.8% of the total market value of the entire cryptocurrency market (US$3.37 trillion). More strikingly, MemeCoin's trading volume continues to account for 6-10% of the share, showing the most concentrated liquidity and trading activity among all crypto tracks.

Unlike traditional crypto projects that are mainly driven by technology or products, the core of MemeCoin lies in its cultural narrative and community promotion. These tokens have no complex technical support or actual product applications, and their value mainly comes from the attention economy and cultural symbolism. The fluctuation of MemeCoin prices is completely dependent on speculative demand and market sentiment, making it more like a social game or speculative lottery.

MemeCoin can completely explode and become the mainstream narrative of the market in 2024. In addition to the overproduction of Altcoins and the falsification of its narrative logic, the lack of sustained narrative hotspots in the overall market, and the lack of market recognition of institutional coins (high FDV, low circulation), the main reason is the development of MemeCoin infrastructure.

In 2024, the MemeCoin fair launch platform led by Pump.Fun completely reshaped the MemeCoin market landscape. Pump.Fun greatly simplified the process of creating and trading Memecoin on the blockchain through simple token creation tools, dynamic pricing curves and liquidity mechanisms, and promoted the democratization and community of MemeCoin creation. As of the end of 2024, the Pump.fun platform has deployed more than 5 million MemeCoins, with cumulative revenue exceeding US$400 million, becoming the most profitable and successful Web3 application in 2024.

In addition to the Meme launch platform, TG trading robots (Maestro Bot, Unibot, BananaGun, etc.), decentralized wallets (such as Ouyi Web3 Wallet) and market software tools (such as GMGN, DEXTools, DEX Screener, moonshot, etc.), these three types of products make it easier for users to find smart money on the chain and discover potential MemeCoin thresholds, simplify the transaction process, and promote the MemeCoin craze.

In 2024, a series of popular tokens emerged in the MemeCoin track, forming a market boom and wealth effect. The popular MemeCoins include $MEW, $NEIRO, $GOAT, $MOODENG, $PNUT, $ACT, $POPCAT, $TERMINUS, $PAC, $DEGEN, $SPX, $CHILLGUY, etc. These tokens not only created huge profits for early investors, but also became a hot spot for community participation and discussion.

2.5 AI+Blockchain

In 2024, the artificial intelligence (AI) industry continues to develop rapidly around the world. The maturity of large model technology, the widespread application of multimodal AI, and the commercialization of generative AI have injected new vitality into various industries. In this context, the combination of AI and Web3 has become a hot spot in the emerging field, bringing new narrative driving force and investment opportunities to the crypto market.

In the Web3 field, AI and Web3 are further integrated. There are at least 200+ Web3 + AI concept projects in the industry, covering infrastructure, data, prediction markets, computing and computing power, education, DeFi & cross-chain, security, NFT & games & metaverse, search engines, social & creator economy, AI chatbots, DID & messaging, governance, medical care, trading robots and many other directions.

In summary, there are four major types of AI tracks in the Web3 field:

• AI infrastructure: including AI public chain infrastructure and computing power resource network, providing basic services and resource support for AI applications. AI public chain infrastructure includes Near, Olas, Cortex, Fetch.ai, etc., while computing power resource network includes Filecoin, Render Network, Io.net , Aethir, Grass, etc.
• Web3 + Data/Model + Market/Network/Protocol: Through decentralized incentive mechanisms and blockchain technology, a decentralized AI data, model and network market is built to break the monopoly of traditional resources and allow more participants (small and medium-sized enterprises and individuals) to have the opportunity to enter and contribute resources to the AI ​​ecosystem. Typical cases include: Bittensor is a decentralized AI model market that allows developers to earn rewards by contributing and optimizing AI models; Ocean is a decentralized data market that allows data assets to be tokenized and traded through blockchain and smart contracts; NEAR Tasks officially released by NEAR is an artificial intelligence annotation platform based on blockchain; Measurable Data (MDT) is a decentralized data exchange economic system that aims to provide a blockchain-based data economy where data providers and data buyers can trade data securely and anonymously; Cortex is a decentralized AI platform that supports distributed training and reasoning of AI models.
• AI + Application Layer: Relying on AI technology and resources, we build AI + Dapp application projects in on-chain data, chain games, social networking, NFT, creator economy, DeFi, etc., and use AI to empower smart contract decision-making and execution to better meet users' intention-based needs and new experiences. Typical cases include: on-chain AI data analysis project Arkham, AI chatbots (Myshell, CharacterX), AI search engines (Kaito, Pulsr, QnA3, Typox AI), AI creator platforms (LiveArt, Art Blocks, Bottto), etc.
• Web3 AI Agent: AI Dapps that integrate AI with Web3 crypto economy, including AI Agent Framework (ai16z & Eliza, Zerebro, ARC, Swarms), AI Launchpad (VVAIFU, Virtuals, Clanker, HOLD), Web3 AI Agent (AIXBT, ACT, LUNA, Degenai), AI Meme (GOAT, Turbo, Fartcoin, CHAOS, ANON), etc.

Among these four categories, the computing resource network in AI infrastructure has been developed this year. Computing resource projects including Io.net , Ather, and Grass have been launched one after another this year to provide support for AI development resources.

Web3 AI Aget has developed most rapidly, starting with the emergence of AI Meme coin GOAT. The subsequent AI Agent framework ai16z & Eliza has gained a massive amount of attention. Its token $ai16z has a market value of more than $20B through DEX liquidity alone without being listed on a large exchange, raising the market value and influence of AI Agent. In addition, with the support of AI Launchpad, many AI Agent Tokens have been released, triggering a wave of market speculation.

2.6 RWA and Stablecoins

In 2024, RWA (real world assets) and stablecoins have become important driving forces in the crypto market, promoting the deep integration of blockchain technology and traditional finance.

The RWA market is growing rapidly:

In 2024, the on-chain real world asset (RWA) market continued to expand, with total assets reaching $15.2B , an increase of nearly $7B compared to 2023, and the number of holders exceeded 80,000. In terms of scale, private credit accounts for the largest proportion and is gradually expanding; U.S. Treasury bonds account for the second largest proportion and are also gradually expanding; commodities, corporate bonds, stocks and other RWA assets are relatively small in scale and have a weaker growth rate.

Private Credit dominates the RWA market. Figure continues to lead, accounting for more than 70% of the market share in terms of total loan volume and active loan stock. Established projects such as Maple, TrueFi, Centrifuge and Goldfinch have maintained a stable market share.

In terms of RWA projects, Ondo Finance has become a benchmark project in the RWA field by tokenizing U.S. Treasury bonds and corporate bonds, with a locked-in value (TVL) exceeding $3 billion. MakerDAO has introduced $10 billion in assets to the chain by launching the RWA custody plan, pushing the support assets of its decentralized stablecoin DAI from crypto assets to RWA. OpenEden is an RWA (real world asset) tokenization protocol that focuses on U.S. Treasury bonds on the chain. It has launched the OpenEden TBill Vault product, allowing users to mint TBILL tokens with USDC to earn income, and has cooperated with Binance Labs to expand the market.

In terms of RWA innovation, USUAL is an innovative RWA stablecoin protocol that has launched USD0, a permissionless and fully compliant stablecoin supported by real-world assets (RWA) 1:1. Its goal is to integrate the RWA token liquidity of various platforms/companies and merge CeFi and DeFi. Usual has integrated with multiple decentralized finance (DeFi) platforms and protocols, including the lending platform Morpho, the yield platform Pendle, etc. Its total locked value (TVL) on the chain exceeds $1.6B, showing its strong growth momentum in the stablecoin field.

In 2024, large financial institutions are also laying out the RWA track. BlackRock launched the first tokenized asset fund BUIDL on the Ethereum network, and cooperated with Securitize and Circle to support 24/7 real-time subscription and redemption. Tether, the issuer of the stablecoin USDT, announced the launch of the asset tokenization platform Hadron by Tether, with the goal of simplifying the tokenization process of real assets (stocks, bonds, real estate, funds, loyalty points, etc.).

Stablecoins are developing rapidly:

The total supply of stablecoins reached an all-time high of $200B in 2024, becoming the core driving force of the crypto market. It is not only a value anchoring tool, but also the liquidity foundation of DeFi protocols and exchanges.

In the stablecoin market, USDT continues to maintain its leading position, with significant growth in both market value and circulation. USDT has been issued multiple times on multiple blockchain networks (including TRON and Ethereum). As of December 2024, USDT's market value has exceeded US$140 billion, an increase of nearly US$50 billion from the beginning of the year, an increase of more than 55%.

At the same time, Ethena is the most outstanding stablecoin project this year, and has further spawned a craze for interest-bearing stablecoins. The market value of USDe launched by Ethena has exceeded $5.9B, which not only contributes a large amount of new liquidity to mainstream DeFi protocols such as Aave, Maker, Morpho, Pendle, etc., but also serves as the main source of income for these DeFi protocols.

In addition to its rapid growth in the crypto space, stablecoins are also gaining popularity in areas such as global payments and cross-border remittances. According to estimates by Castle Island Ventures and Brevan Howard Digital, the payment settlement volume of stablecoins in the first half of 2024 has reached approximately $2.62 trillion, and is expected to exceed $5.28 trillion for the entire year. There are approximately 20 million active addresses trading on-chain stablecoins each month, and more than 120 million addresses hold non-zero stablecoin balances.

In emerging markets, such as Brazil, India, Indonesia, Nigeria and Turkey, the use of stablecoins has gone beyond traditional crypto transactions and has been integrated into daily financial activities. The survey showed that 69% of respondents used stablecoins for currency substitution, 39% for payment of goods and services, 39% for cross-border payments, and another 20% to 30% of respondents used stablecoins for salary payments and business activities. Juicyway, an Africa-based cross-border payment company, has processed more than $1.3 billion in stablecoin transactions. Nigeria ranks second in global crypto adoption.

In 2024, large companies and banks are also scrambling to enter the stablecoin market. PayPal, an American online payment company, launched the stablecoin PayPal USD, which is pegged to the US dollar, and announced in September that it would allow merchants to buy, hold and sell cryptocurrencies through their business accounts. In addition, Stripe acquired the stablecoin platform Bridge for $1.1 billion, resuming the crypto payment services for American companies through USDC on Ethereum, Solana and Polygon. Japan's three largest banks - Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC) and Mizuho Bank (Mizuho) jointly launched a cross-border payment system called "Project Pax" in September 2024, replacing intermediary banks in traditional cross-border payments with stablecoins to improve efficiency and reduce costs.

2.7 The explosion of TON ecosystem

In 2024, TON public chain achieved a large-scale explosion in the gaming and social fields by relying on Telegram's huge user base and innovative Mini App product model and airdrop gameplay. The explosion of social games such as Notcoin, Hamster, and Catizen quickly attracted a large number of Web2 and Web3 users in a short period of time, increasing the on-chain activity and market popularity of TON public chain.

NOTCOIN has become a phenomenal application. With its Tap-to-Earn model, it attracted 5 million users within a week of its launch, and exceeded 40 million users in just a few months, becoming the most popular Web3 application in Telegram Apps Center. Its token was issued fairly with an FDV of more than $1 billion, leading the Telegram Mini Apps craze.

Following NOTCOIN, games and social applications such as Catizen, Dogs, Hamster Kombat, and Uxlink continued to be popular, coupled with the wealth effect of airdrop incentives and token launches, these Mini App projects have successfully focused market attention.

With Telegram's huge user base (over 900 million MAU), TON provides a powerful user and traffic entry point for Web3 projects. Many Web3 projects use TON to expand their user base and community traffic. The focus on users and traffic also drives Telegram to achieve its first profit in 2024, with the number of Premium subscribers exceeding 12 million and total annual revenue exceeding US$1 billion.

Although TON has achieved great success in gaming and social ecology, its DeFi and other ecological developments are relatively weak, and the mainnet is more like a traffic pool and user service platform. With the increase of homogeneous projects in the ecosystem, the wealth effect has gradually weakened, and user stickiness has dropped significantly. The intensification of competition and the decline of project enthusiasm have caused the on-chain activity of the TON ecosystem to show a clear downward trend at the end of the year.

3. Cryptocurrency market financing status and investment trends in 2024

In 2024, the financing situation in the crypto market showed a trend of diversification and gradual recovery. Although the market has experienced fluctuations in the past year, innovative projects and technology-driven projects still attracted the attention of investors, especially in the fields of Web3 infrastructure, DeFi, CeFi, games and AI+blockchain, where the financing activity and amount have increased significantly.

3.1 Investment environment recovery and capital injection

Judging from the overall financing data, 2024 is a year of recovery in the crypto market financing. According to RootData statistics, in 2024, the primary market of cryptocurrency and blockchain disclosed 1,536 investment and financing events, with a total financing amount of more than US$10.1 billion, an average financing amount of US$9.13 million, and a median financing amount of US$4.1 million.

In terms of the number and amount of financing, the investment and financing market situation in 2024 is basically the same as that in 2023, with 1,217 transactions and a total of US$9.3 billion in financing. However, there is a big gap compared with the amount and number of financing in 2021 and 2022, reflecting that the financing situation in the crypto market has improved somewhat, but it is far from returning to the peak of the last round of DeFi bull market, and the overall market investment trend tends to be cautious and rational.

3.2 Capital Flow and Track Heat:

In 2024, the capital flow in the crypto market showed a clear trend of focusing, and multiple tracks became the focus of investors. According to RootData statistics, Web3 infrastructure, DeFi, games and CeFI, social entertainment and AI tracks received the most financing, especially the Web3 infrastructure track received nearly US$4 billion in financing, accounting for nearly 40% of the total financing amount.

In the Web3 infrastructure track, we can see that in 2024, public chain infrastructure and L2 expansion solutions including Layer1, modular blockchain, Layer2, ZK, parallel EVM, DA, side chain, Layer3, etc. will become the first choice of investment institutions. This also indirectly reflects the preference of investment institutions for heavy infrastructure.

Well-known VC institutions such as Animoca Brands, Andreessen Horowitz (a16z), Polychain, Coinbase Ventures, Binance Labs, Spartan Group, Paradigm, etc. have increased their investment in the blockchain and Web3 fields in 2024. From the perspective of their investment preferences, investment institutions tend to invest in Web3 infrastructure and DeFi. Animoca Brands and Spartan Group prefer infrastructure and gaming tracks, and the two have the largest number of investments.

3.3 Popular investment cases

Typical cases in the financing of Web3 blockchain projects in 2024 include Monad public chain's US$225 million, Farcaster's US$150 million in Round A, Berachain's US$100 million in Round B, EigenLayer's US$100 million in Round B, and HashKey Group's US$100 million in Round A.

The financing scale of these projects shows that investment institutions prefer projects with clear commercialization paths and innovative technologies. Capital begins to focus on protocols with long-term growth potential, cross-chain capabilities and scalability. The Web3 investment and financing market is gradually returning from early "bubble-style" investments to rational, technology-driven capital flows.

3.4 The rise of crypto project mergers and acquisitions (M&A) activities

As the crypto market matures, mergers and acquisitions (M&A) activities have become another highlight of crypto market investment and financing in 2024. Many large companies enhance their competitiveness by acquiring innovative projects and technologies. Among them, payment company Stripe acquired stablecoin payment platform Bridge for $1.1 billion, becoming the largest acquisition in the crypto field. Other M&A cases include Robinhood's acquisition of cryptocurrency exchange Bitstamp for $200 million, Bitcoin mining company Bitfarms' acquisition of Stronghold Digital for $175 million, mining company Cleanspark's acquisition of Bitcoin miner GRIID for $155 million, and Riot Platforms' acquisition of Bitcoin mining infrastructure and hosting service platform Block Mining for $92.5 million. The M&A trend shows that large companies are strengthening their market position by absorbing innovative projects and technologies.

Part 2 Crypto Market Outlook in 2025

With the continuous iteration of encryption technology and the growth of market demand, 2025 will be a key year for the development of the encryption industry. The encryption market will show more possibilities and witness the vigorous development of multiple emerging tracks and applications. We can make optimistic predictions about some tracks and application trends in the encryption market. Of course, in the new year, the encryption market will also face some risks and challenges, and practitioners need to prepare countermeasures.

1. Market track and application development forecast

In 2025, the application scenarios of the crypto market will be further expanded, and the actual implementation and industry penetration of blockchain technology will enter a new stage. From finance to the real economy, decentralized technology will promote the transformation of traditional industries with efficiency, transparency and cost advantages. DeFi, NFT, Web3 ecology, smart contracts and other technologies will accelerate maturity, promoting the widespread recognition and acceptance of crypto technology and digital assets by global users.

1.0 “Bitcoin First” Strategy

Bitcoin (BTC) is widely regarded as "digital gold" due to its fixed supply (21 million coins) and censorship-resistant properties. This feature makes it the preferred asset to hedge against risks in the traditional financial system amid high inflation and increasing monetary policy uncertainty. At the same time, Bitcoin's long-term appreciation potential and transparent decentralized network further consolidate its position as a reserve asset.

As the global economic environment becomes more complex, Bitcoin's "anti-inflation" attribute will attract more attention from companies and countries. In particular, in the face of currency depreciation, economic sanctions and the instability of the traditional financial system, Bitcoin provides a way to store value independent of the traditional monetary system.

It is expected that by 2025, some large technology companies (such as Apple, Microsoft, and Google) may follow the example of pioneers such as Tesla and include Bitcoin in their balance sheets as part of their reserve assets to diversify the risk exposure of traditional assets (such as cash, bonds, and stocks), while enhancing their layout in the Web3 and blockchain fields through Bitcoin strategies.

At the same time, with the changing geopolitical landscape and the gradual weakening of the US dollar's hegemony, Bitcoin may be included in the foreign exchange reserves of more countries to reduce their dependence on the US dollar-dominated monetary system. Emerging economies, in particular, can cope with US dollar fluctuations and international economic sanctions by holding Bitcoin.

The "Bitcoin first" strategy will continue to increase the demand for Bitcoin purchases, driving the continuation of the Bitcoin bull market. It is highly likely that the price will break through $200,000 next year.

1.1 Ai Agent

In 2024, the Web3 AI track will show two main trends:

• Development of AI infrastructure: The launch of computing resource network projects such as Io.net , Ather and Grass has provided important resource support for the development of AI. These projects have introduced abundant computing power supply to the Web3 AI ecosystem through the model of sharing economy. However, the current AI infrastructure is still insufficient in the actual demand side, and the balance between supply and demand has not yet been fully established.
• Evolution of AI Agent Narrative: In 2024, AI Agent gradually evolved from the hype wave of "AI MEME" to a multi-level narrative of "single AI Agent application → AI Agent LaunchPad → AI Agent framework". However, at present, this narrative is still mainly focused on speculative hype and lacks real commercial landing scenarios.

As the market demand for practical applications increases, 2025 will be a key turning point for AI Agents to move from hype to actual application. More AI Agents with real demand scenarios and functions are expected to emerge, breaking the imbalance between supply and demand. In particular, AI projects in the Web2 track will gradually enter the Web3 field, which will introduce more advanced technologies and application frameworks to Web3.

Four major AI Agent development directions worth paying attention to:

• Chain trend of AI Agent framework: AI Agent framework may further evolve into Layer 1 infrastructure dedicated to AI. This type of chain AI framework can achieve deep integration of smart contracts and AI Agents, providing more efficient underlying support for AI task execution and resource allocation.
• Combination of AI Agent + DeFi: Introducing AI Agent in on-chain transaction agents will become one of the most direct landing directions in the Web3 field. AI Agent can provide autonomous financial services by understanding the user's transaction intentions, thereby significantly improving the user experience. This combination point will also be a hot spot for institutional investment and market focus.
• Optimization of AI infrastructure: The development of AI infrastructure will be closer to real demand scenarios, shifting from simple computing power supply to serving actual applications. Only by achieving a balance between resource supply and demand and bringing sustainable revenue can AI infrastructure truly become the cornerstone of industry development.
• The rise of AI middleware: As the requirements for privacy and security increase, the operating environment of AI Agents requires higher trustworthiness. AI middleware such as TEE (Trusted Execution Environment) and privacy protection protocols will play a key role in ensuring that AI Agents perform operations autonomously in a secure environment.

1.2 Innovation of RWA and Stablecoin

In 2024, the on-chain RWA assets are centered on private credit and US bonds, which have become an important pillar of the DeFi market due to their stable returns and wide market acceptance. The introduction of such assets not only provides a stable source of income, but also injects a large amount of high-quality collateral assets into decentralized finance, further promoting the improvement of on-chain capital efficiency.

It is expected that in 2025, with the improvement of various RWA protocol infrastructures, the RWA and stablecoin tracks will continue to see new changes:

• Expansion of on-chain RWA asset range : The asset range of on-chain RWA will be further expanded to commodities (such as gold, oil), stocks, ETFs, corporate bonds, and even more complex financial products (such as supply chain finance and expansion of trade settlement). These emerging RWA asset types will be integrated into the DeFi and CeFi ecosystems, becoming collateral or income-generating assets of the protocol, further improving capital utilization. At the same time, these high-yield assets are expected to provide returns far exceeding those of private credit and US bonds, attracting more traditional institutions and investors to enter the on-chain financial field.
• The rise of new RWA stablecoins: In 2025, stablecoins based on RWA assets are expected to see significant growth. New stablecoins represented by Usual.money will be directly linked to US Treasury bonds or other RWA income-generating assets, providing holders with an automatic dividend mechanism to achieve higher holding returns.
• Diversification of financial institutions and stablecoins: In 2025, stablecoin issuers will be more diversified. Traditional financial institutions (such as JPMorgan Chase and Wells Fargo) and fintech companies may enter this field and launch customized stablecoins based on RWA for cross-border payments, lending, trade settlement, supply chain finance and other scenarios.

1.3 Continuous Development and Innovation of Decentralized Finance (DeFi)

In 2024, the decentralized finance (DeFi) market maintained a steady growth momentum, and the total value locked (TVL) showed a steady upward trend. Mainstream DeFi protocols have significantly improved user experience through continuous technological and product upgrades. At the same time, new innovative tracks have emerged in the market, such as LRT (re-pledged liquidity) and innovative protocols such as Ethena and Usual.money, which have performed well in providing real yield and optimizing asset liquidity. These innovations enrich the DeFi ecosystem and provide users with more diverse financial options.

In 2025, the DeFi market is expected to usher in a more mature and diversified development. The following trends and innovation directions are worth paying attention to:

• Asset liquidity and capture of real yield: Improvements in cross-chain bridges and interoperability protocols will enable users to more easily migrate assets and operations between multiple blockchain networks, improving the liquidity of encrypted assets. At the same time, RWA will continue to be introduced into the DeFi ecosystem as a high-quality collateral type, providing a more stable source of income for DeFi protocols and attracting funds from traditional financial institutions.
• AI Agent-driven updates : With the development of AI Agent technology, more intelligent and autonomous DeFi applications are expected to emerge. For example, on-chain smart trading agents and automated strategy execution tools will help users achieve intent-based operations, provide more intuitive user interfaces (UI) and user experiences (UX), and significantly reduce the learning curve and operational barriers for users to enter the DeFi market. AI Agents can play a role in areas such as user asset management, risk hedging, and yield optimization, providing users with personalized financial solutions and promoting the large-scale adoption of DeFi products.
• Promotion of regulatory compliance: After the Trump administration came to power, due to its pro-cryptocurrency stance, the long-standing regulatory gray area of ​​the DeFi field is expected to improve. It is expected that in 2025, the United States will introduce a clearer policy framework to promote the compliant development of DeFi. This regulatory compliance will prompt DeFi and Web3 to return to the United States, further broaden DeFi's user base, and bring more traditional capital inflows to the market.
• Integration of DeFi and CeFi: Clarified regulation will attract more traditional financial institutions to participate in the DeFi field. Large financial institutions and fintech companies may launch hybrid financial products that combine DeFi protocols with traditional financial instruments to meet the dual needs of institutional users for transparency and profitability.

1.4 Meme track continues to explode

In 2024, the development of meme launch platforms, trading bots and market tools led by Pump.Fun promoted the meme craze and made MemeCoin one of the important tracks in the crypto market. With its unique cultural consensus and community-driven force, the MemeCoin track is no longer limited to short-term speculation, but has gradually formed one of the crypto market ecosystems with long-term appeal.

It is expected that in 2025, the MemeCoin track will continue its strong growth momentum and show the following trends and changes:

• The total market value of the MemeCoin track is expected to grow from the current more than 100 billion US dollars to 1 trillion US dollars, and its market value share in the entire crypto market will increase from the current 2.4% to 8%-10%, becoming an important part of the crypto market.
• The rise of the top MemeCoins : It is expected that the market capitalization of 1-2 MemeCoins will exceed 100 billion US dollars (currently only DOGE and SHIB have competitive potential), the market capitalization of 5-10 MemeCoins is expected to exceed 10 billion US dollars, and 10-30 will enter the top 100 of the crypto market capitalization rankings (compared to the current 9), further consolidating their position in the crypto market.
• Diversified narrative drive : MemeCoin will no longer be limited to simple meme drive and short-term hype, and may combine decentralized finance (DeFi), NFT, AI technology, etc. to expand narrative space and application scenarios.
• More investors’ participation and purchases : In addition to retail investors, more venture capital firms, institutional traders, and traditional financial institutions will participate in MemeCoin investment and transactions.
• Expansion of the MemeCoin community : The MemeCoin community will continue to grow, and its unique cultural consensus and strong market consensus will be further recognized by investors. MemeCoin's strong user stickiness and social attributes will give these projects more lasting vitality.

1.5 Decentralized Science (DeSci)

In 2024, the decentralized science (DeSci) track ushered in growth due to landmark events such as Binance Labs' investment in BIO Protocol and a16z's lead investment in AminoChain, attracting the attention of some capital and investors.

Looking ahead to 2025, the DeSci track will show significant trends and innovations in research funding allocation, organizational forms, and interdisciplinary collabor