This article makes multiple predictions about the crypto world in 2024, including Ethereum Layer2 network, Bitcoin ecosystem, Web3 games, modular blockchain, DeFi, and DePIN.
Summary:
This article discusses the predictions for the crypto world in 2024, including various trends such as RWA, DePIN, and infrastructure. It has gained nearly 500,000 reads on Twitter (X) and is now reprinted here for readers’ enjoyment. However, these predictions are purely speculative and biased, and should not be considered as investment advice.
1. L2 will remain one of the most important narratives in 2024. With the upgrade of dencun, the significant reduction in L2 costs will lead to the explosion of the L2 ecosystem. Besides games, perp, DeFi, NFTs, there will also be an explosion of social and DePIN on L2.
2. L2, such as arb, op, zksync, starknet, and blast, will compete with other public chains in all aspects. With the implementation of EIP-4844 and the evolution of the DA layer, L2 will compete with high-performance public chains in terms of cost and speed. The competition between arbitrum and solana’s ecosystems will be an important focus in 2024.
3. Zksync will launch an economic mechanism in 2024, becoming a significant force driving the explosion of L2.
4. If Starknet achieves a breakthrough, it will open up the narrative of full-chain games.
5. In 2024, the diluted market value of an L2 project will exceed 100 billion US dollars; in an optimistic scenario, during the peak period of the cycle, the diluted market value of an L2 will exceed 300 billion US dollars. The final structure of the L2 market cannot be determined in 2024, but it will be basically settled after this cycle.
6. The BTC ecosystem has opened Pandora’s box through the battle of inscriptions, and many teams are exploring expansion packages, including decentralized indexing, inscription system evolution, decentralized cross-chain, zk proofs, and L2. Once progress is made, the BTC ecosystem will develop, and integration with the Ethereum ecosystem will also accelerate. The exploration of the BTC ecosystem is one of the most noteworthy evolutions of this cycle.
7. Ethereum L1 is gradually evolving into a B2B chain, where the vast majority of interactions for ordinary users will occur on L2/L3 and a few high-performance L1 chains. Ethereum is gradually becoming the underlying asset in the crypto field. At the same time, with the evolution of modular blockchains, Ethereum will become the most important settlement layer, with most execution layers and some DA layers being outsourced. However, due to the need for security at the lowest level, ETH will still capture the value of overall ecosystem growth.
8. Similar to the predictions for 2023, modularity will still be an important narrative in 2024, especially in the DA layer. Ethereum’s re-staking field will also enter the DA layer competition. In the modularity field, there will be competition and integration between the cosmos ecosystem and the Ethereum ecosystem. There will be competition between third-party DAs and native DAs. Before danksharding is achieved, the urgent market demand for L2 will result in a certain scale of demand for third-party DAs.
9. In addition to the Ethereum and BTC ecosystems, the cosmos and solana ecosystems will continue to develop, consistent with the predictions from early last year. Cosmos will make progress through modularity, while Solana will make progress through various applications. Furthermore, with the maturity of modular blockchains, Solana’s evolution will involve participating in a broader crypto ecosystem, and its integration with Ethereum will be stronger, capturing greater value.
10. Web3 games will achieve breakthroughs on L2/L3 (arb, starknet, etc.), and there will be a game with over a million users (not achieved in 2023, but mature enough in 2024). The game chain based on Arb will become the forefront of web3 game breakthroughs. With the launch of Magic’s game chain and increased interoperability with more games, it will have significant implications for the evolution of web3 games.
11. Besides integrating NFTs, DEXs, lending, and blast, Blur is expected to enter the NFT perp market, and even the NFT markets of L2, BTC, and Solana ecosystems. Blur still has the opportunity to become one of the most important disruptors in the industry in 2024.
12. In addition to the explosion of projects on L2 in the Ethereum ecosystem, there is expected to be a large-scale deflation, capturing value. Unlike other L1 chains that increase issuance and reward miners with fees, all new tokens and fees will be returned to stakers and holders, incentivizing more users to stake or re-stake, further locking ETH in circulation.
13. Perp in DeFi will experience significant development in 2024, with SNX, GMX, GNS, DYDX, and others generating at least 5 times the trading volume compared to 2023. Perp may not be the most important narrative during a bull market, but it is likely to be one of the best fundamental tracks.
14. The advancement of modular blockchains and cross-chain technology will lead to the integration of the Ethereum ecosystem with the BTC and Solana ecosystems. This cycle will see the emergence of many currently unknown projects. According to the current evolution of the BTC ecosystem, one possible path is for Ethereum to support BTC on Layer 2. If this becomes a reality, the integration between Bitcoin and Ethereum will gradually increase. However, the BTC expansion package needs to follow its own native path, similar to protocols like atomicals. If the AVN can be developed, it will have a significant impact on the development of the BTC ecosystem.
15. DePIN will achieve some breakthroughs on Solana and Arbitrum, but this track is still in the early stages of development, and more exploratory projects will emerge.
16. AI is still a long way from practical implementation, but it remains one of the important narratives in 2024. AI protocols based on L2 and high-performance public chains will gradually emerge.
17. The Ethereum re-collateralization track will become an important narrative at some point in this year.
18. NFTs, memes, and inscriptions will experience a revival at some point, leading to an increase in NFT DEX trading volume and providing a market foundation for the launch of NFT perps.
19. Some celebrities will enter the NFT, meme, and inscription domains.
20. With the development of L2 and the exploration of high-frequency applications, smart contract wallets have the opportunity to emerge in 2024.
Extended reading:
Biteye’s Outlook for the 7 Major Tracks in 2024: BTC Ecosystem, Modular Blockchain, MEME, DePIN… [Image]
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