To enhance user experience and improve development efficiency, AI can be integrated with existing blockchain applications, such as DeFi, gaming, and NFT. The fusion of AI and Web3, supported by regulatory compliance, has the potential to change user behavior and accelerate mass adoption of Web3, contributing to the construction of a trusted digital society.
AI is also one of the key focuses of OKX Ventures, with current investments in projects like Flock and MyShell. MyShell, for example, leads in multimodal voice models, with over 12k+ stars on Github. The product has 420k+ registrations, 50k creators, 70k private robots, and 900 public robots, serving as a model for the integration of AI agents and Web3.
Although blockchain gaming has not seen a breakthrough in 2023, it remains a high-potential sector due to its good data and the ability to accommodate a large number of users. In the past year, the gaming industry disclosed 133 transactions and raised $1.18 billion in funding, with a total of approximately 2,500 to 3,500 gaming projects.
According to Footprint data, the total number of users in the GameFi field is expected to reach 340 million in 2023, with a total trading volume exceeding $32 billion and a total transfer frequency of 7.4 billion. The on-chain transaction volume generated by gaming projects is 23 times higher than the average of DeFi protocols. For example, the Sweat Economy supported by NEAR is one of the most widely used mobile earning applications worldwide. In the past 30 days, it has had 1.04 million unique active wallets (UAW). Currently, it has over 145 million users who remain active and healthy while earning cryptocurrencies.
With the opportunity of 3A games, blockchain gaming will become a new growth point for user acquisition. From the supply side, after a year of development in 2023, a large number of high-quality games are ready to be launched. With the support of 3A game IP, traditional game users will smoothly enter the Web 3.0 world, gradually opening up new prospects for the gaming industry.
OKX Ventures expects a blockchain gaming revival in 2024, with a user competition battle among various games. 3A games’ capturing ability of users and asset value is highly regarded and has been strategically invested in projects like BIG TIME, Ember Sword, and Shrapnel. For example, the timing of BIGTIME token launch was perfect, coinciding with the market recovery. Players can earn in-game tokens as rewards daily, and the token price has also seen significant growth, making it a successful investment.
FOCG (Fully Onchain Game) will also become a new growth point in the gaming field. FOCG refers to games where assets, settlement, and game logic all occur on the blockchain, creating a new and more complex normalized on-chain application that brings financialization and composability. Currently, the FOCG sector is still in its early stages of development and construction, with applications and assets in relatively scarce supply, presenting immense growth opportunities.
OKX Ventures sees great potential in FOCG and has strategically invested in projects like Curio to support innovation in the industry. It is expected that FOCG will continue to grow around three main aspects: engines, game content, and surrounding ecosystems such as wallets and trading platforms.
DePIN is a physical infrastructure grid that transparently and efficiently manages real-world services using blockchain technology, and it is expected to explode in 2023. Currently, DePIN has a market cap of over $20 billion, with a growth rate of over 50% since the beginning of the year. The trading volume is $11 billion, generating approximately $15 million in annual on-chain revenue.
According to a report by Messari, the DePIN ecosystem had over 650 projects in 2023, covering six subdivisions: computing, AI projects, wireless, sensors, energy, and services. It’s worth noting that DePIN’s revenue is utility-based rather than speculative. Compared to other cryptocurrencies that experienced a decline of 70-90% during bear markets, DePIN’s revenue only decreased by 20-60% from its peak, showing more resilience and support.
In terms of applications, DePINs are expected to explore new directions that integrate AI, ZK, gaming, and other fields in 2024. For example, ZK-Verifiable GPU Cloud Services can be implemented on the blockchain within 1-2 years, while centralized providers will no longer be able to offer their services. In terms of narratives, the infrastructure of the DePIN sector is highly regarded, particularly specific Layer1 solutions for DePIN.
Considering the advantages of high throughput, low fees, and a large developer community, most DePIN projects are currently built on general-purpose chains like Solana or Polygon. Projects like Helium and Render Network have already migrated to Solana and brought a large number of users to the network. According to data from Dune Analytics, IOTex has accumulated over 440,000 users, and Helium has over 180,000 users on Solana. From the demand side, specific Layer1 solutions for DePIN will start to activate and expand by 2024, providing services tailored to DePIN.
With the establishment and improvement of regulatory frameworks for the cryptocurrency industry in countries and regions like El Salvador, Canada, Dubai, and Brazil, the industry is moving towards compliance and may benefit from a more favorable development environment and wider adoption in 2024. The formal approval of a Bitcoin spot ETF by the U.S. SEC, in particular, means that traditional financial investors now have official exposure to Bitcoin, which will further catalyze the compliance and scalability of the cryptocurrency industry and, in turn, encourage traditional finance to embrace innovation, promoting fairness, security, and transparency in the financial industry.
According to Blockworks data, on the first day of trading for the U.S. Bitcoin spot ETF, the trading volume reached $4.6 billion, with Grayscale’s GBTC accounting for over $2.1 billion, BlackRock’s IBIT over $1 billion, and Fidelity’s FBTC over $680 million.
Eric Balchunas, a senior ETF analyst at Bloomberg, stated that during the first two days of the Bitcoin spot ETF’s listing, nine issuing institutions absorbed $1.4 billion, surpassing the outflow of $579 million from GBTC, resulting in a net inflow of $819 million. Both traditional macro funds and ultra-high net worth individuals have injected a large amount of liquidity into the cryptocurrency industry. From another perspective, the volume of on-chain stablecoins continues to increase, indicating a continuous influx of new capital. According to DefiLlama, the total market capitalization of stablecoins is $133 billion, with USDT having a market capitalization of $94.9 billion, accounting for 71% of the market share.
With the support of capital, the cryptocurrency ecosystem will accelerate its development towards greater perfection. Blockchain infrastructure has developed rapidly in recent years, and with the catalyst of VC capital, necessary conditions have been created for new applications and innovations. Approximately $73.4 billion flowed into cryptocurrency-related companies and projects from 2017 to 2022. In 2023, the total funding amount reached $9.13 billion, with a total of 1,178 funding rounds.
From January 2020 to January 2024, funding has flowed on a large scale into infrastructure, games, NFTs, and DeFi, apart from CeFi. These types of projects have accumulated sufficient funds during the bear market, ensuring a certain level of product delivery and becoming new targets for the next wave of innovation.
The rise of the cryptocurrency industry has become the engine driving significant changes in internet technology and the financial sector, opening the door to the future world. In this challenging and opportunistic field, cryptocurrency industry builders have become the creators driving digital future, leveraging their deep understanding and unique insights into blockchain technology, and through innovation and dedication, the cryptocurrency industry has achieved tremendous success. However, these builders are not satisfied with the status quo, but continuously drive the advancement of the cryptocurrency industry.
They participate in open-source projects, lead entrepreneurial companies, actively contribute to community-building, and promote the prosperity and development of the entire industry. Their spirit of dedication not only inspires more young people to join this field but also injects fresh blood into the cryptocurrency economy.
Furthermore, with the emergence of new technologies and solutions, as well as the gradual establishment of a global regulatory framework for cryptocurrencies, the relationship between the cryptocurrency industry and the traditional financial system is constantly evolving. The interaction between the two is transitioning from competition and cooperation to integration, thereby influencing and promoting market liquidity between them. It is evident that the cryptocurrency industry will reach new heights in 2024. However, the entry of large-scale liquidity is not achieved overnight. The cryptocurrency industry exhibits rapid and diverse development, and innovative projects in this field require professional support in terms of funding, technology, and strategy.
As a top-tier investment institution, OKX Ventures has long been rooted in the forefront of the industry, providing support for diverse innovations and aiming to support high-quality startups and projects. With a deep understanding and insight into the blockchain industry, as well as professional post-investment management experience, OKX Ventures has gradually forged a differentiated approach of “Innovation + Empowerment” with a global team. By integrating and collaborating across various sectors, OKX has established a comprehensive resource system, enabling one-stop access to OKX’s resources for the teams it invests in, providing multiple services and resource integration.
Furthermore, OKX Ventures is not just a traditional financial investor but also assumes the dual role of “explorer” and “enabler,” growing together with “entrepreneurial partners” and accelerating the development of industry innovation.
Looking back at history, since its inception in 2009, Bitcoin has gone through several economic cycles and market fluctuations but has ultimately rebounded and created new all-time highs. This performance has strengthened the confidence of long-term Bitcoin investors, including OKX Ventures.
In the rapidly changing market environment, OKX Ventures keenly observes market trends, flexibly responds to market changes, adjusts strategies, and consistently increases investment in innovative projects. It has successfully navigated several bull and bear cycles and reaped abundant rewards. In the future, OKX Ventures will continue to deepen its presence in the primary cryptocurrency market and provide support to industry builders and high-quality startups and projects.
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