2025 Encryption Preview - Listen to what major investment institutions say (II)

Author: IOSG Ventures, Bing Ventures, Waterdrip Capital, HashKey Capital

Compiled by: Scof, ChainCatcher

At the beginning of the New Year, the global investment environment continues to change, and various emerging technologies and market trends continue to emerge. In this context, how investors formulate long-term strategies and how to evaluate and select investment projects has become a topic of widespread attention within and outside the Crypto industry.

In this regard, RootData and ChainCatcher hosted the interview. In the last issue, we invited investment institutions including OKX Ventures and Bixin Ventures to make constructive replies. The investment institutions invited in this issue include IOSG Ventures, Bing Ventures, Waterdrip Capital and many other representative investment institutions. They have in-depth discussions on investment trends and suggestions in 2025.

**What are the investment strategies and optimistic tracks in 2025? What

is the logic behind it?**

**[IOSG

Ventures](https://www.rootdata.com/zh/Investors/detail/IOSG%20Ventures?k=MTcy) :**

1. Crypto x AI

Crypto x AI is the most innovative and dynamic field in the industry recently. It has attracted nearly out-of-the-box market attention and provides an extremely wide space for imagination. Sovereign AI (AI system powered by decentralized crypto infrastructure) represents a revolutionary opportunity (but there are many risks to give AI such great power). These systems can achieve true autonomy, leveraging unmanaged wallets to interact with other agents and humans on-chain. We will even see AI agents purchasing human services when they need to perform off-chain tasks.

2. DePIN

DePIN is a highly innovative and diverse field. It combines crypto-economic models with off-chain hardware, thus solving many challenges in traditional industries. Although DePIN is a very promising field, not all DePIN projects are equally promising, and the success of the specific item is highly dependent on itself.

We are looking forward to DePIN projects that can provide clear and measurable value (such as reducing costs, increasing efficiency, or entering untapped markets). The success of DePIN usually comes from the new business models it implements that cannot be replicated by centralized systems. This advantage allows projects to have better market penetration, distribution and accessibility. DePIN can also drive cost efficiency and better unit economics by reducing operating costs or increasing resource utilization, making its decentralized model more competitive and sustainable. In addition, capital expenditure optimization is an important advantage of the DePIN project as it distributes infrastructure costs to the community through token incentives, enabling faster scaling and wider participation.

On the other hand, we should try to avoid DePIN projects that improperly use tokenized. Their failed token economics often lead to an unsustainable ecosystem. The tokens of some projects do not bring about actual efficiency improvements or improvements over traditional methods, but rely solely on token incentives to cover up potential inefficiencies and subsidize usage costs in the short term. Tokenization alone cannot justify decentralization and sometimes the results are worse than existing centralized models.

3. Pay

Stablecoins have become the mainstream payment medium in the crypto industry. And due to its programmability, cross-border practicality and an increasingly clear regulatory framework, stablecoins are expected to become the standard settlement currency for global payments.

Although stablecoins have obvious advantages over fiat currencies in programmability and cross-border liquidity, their wider applications are still subject to regulatory challenges and inefficient in-and-out chain mechanisms. However, the U.S. government that advocates crypto may provide regulatory clarity to create a healthier environment for efficient, liquid and low-cost crypto and fiat transactions.

4. Consumer Applications

The field of consumer applications is very exploratory, but it is also more difficult to define, often overlapping with other fields such as AI, DePIN and payments. This field covers a wide range of applications, including but not limited to AI-powered consumer solutions, consumer-facing DeIN projects, and payment solutions designed for consumers.

In addition to actual application scenarios, consumer applications also have speculation and gamification components in the field of encryption. A very important category here is chain games. They incorporate speculative economic elements and Meme and are still one of the most successful consumer interaction experiments in the industry. These speculative applications often blur the lines between entertainment, finance and practicality, creating unique opportunities for innovation.

Looking ahead, new experiments combining encryption and consumer-oriented applications will bring more opportunities. The gaming mechanics that incorporate economic incentives show great potential, providing new ways to attract users and drive adoption. This area has a very broad design space and we expect it to bring breakthrough innovations in 2025.

**[Bing

Ventures](https://www.rootdata.com/zh/Investors/detail/Bing%20Ventures?k=MTE4Mzg=) , General Partner, Bruce Lan:**

Investment Strategy:

In 2025, our investment strategy focuses on discovering the value of early-stage projects and promoting the mainstream application of blockchain technology. The logic behind this is simple: the rapid iteration of the blockchain industry allows the earlier iteration and the earlier it is to make arrangements, the more likely it is to capture the opportunity for exponential growth.

Specifically, we are more concerned about the following directions:

1. Early project priority:

In the next few years, the core competitiveness of the blockchain field lies in technological innovation and practical implementation capabilities, and these can often be found in early projects. For us, supporting potential start-ups is not only an investment, but also an important way to drive the entire industry forward.

2. The combination of Web3 and Web2:

The key to the mainstreaming of blockchain technology lies in whether it can truly "break the circle" and integrate into daily life and traditional markets. We are optimistic about projects that can find a combination of Web3 technology and Web2 user needs, such as applications that optimize user experience and lower usage thresholds.

3. New projects from well-known teams:

When many experienced teams in the industry choose to start a business, they often have accumulated deep resources and market insight. This type of project usually has a high starting point and therefore has a higher success rate.

Key tracks:

In 2025, we are particularly optimistic about the following areas, which show the comprehensive evolution of blockchain technology from underlying architecture to practical applications:

1. ParallelVM (parallel virtual machine architecture):

We believe that parallel virtual machine architecture is the key to improving blockchain performance. Transaction processing speeds in traditional blockchain systems are often bottlenecks, and ParallelVM provides solutions to improve throughput by executing transactions and contracts in parallel. Especially in scenarios such as DeFi and blockchain games that require extremely high transaction intensity, ParallelVM has huge application potential. Of course, the challenge of this track is that the issues of concurrency management and security still need time to be solved.

2. Alternative VM architecture:

Blockchain developers have very clear requirements for more efficient and flexible virtual machines. Alternative VM breaks the limitations of Ethereum Virtual Machine (EVM) and supports more programming languages ​​such as Rust and Wasm, which is crucial to attract developers and create more complex applications. Although the ecological construction of the new architecture takes time, its potential cannot be ignored.

3. Crypto Compliance:

As global regulation of cryptocurrencies becomes increasingly strict, compliance is becoming a urgent need. Whether it’s KYC, AML or tax compliance, projects that simplify these processes and ensure compliance and transparency will be very popular, especially in the trend that mainstream financial markets want to be crypto.

4. DeFi Infrastructure and Innovation:

We always believe that infrastructure improvement is the key to DeFi's expansion of user base. For example, reliable cross-chain bridges, decentralized insurance, and safer oracle systems can all give users a higher level of trust in DeFi.

5. The combination of AI and encryption (AI x Crypto):

The combination of AI and blockchain is an emerging direction. We see that AI can be used to optimize blockchain network performance, and blockchain can provide data privacy protection for AI. This technology crossover may lead to some unexpected innovations, such as smarter smart contracts or decentralized AI services.

6. Bitcoin Innovation:

Bitcoin remains a mainstay in the crypto industry, but its potential has not been fully released. We are following the development of Bitcoin Layer 2 extensions and smart contract capabilities, which allow Bitcoin to make its mark in payments and DeFi. Of course, the Bitcoin community has a low acceptance of change and may be slow to innovate.

The choice of these tracks is not accidental. They reflect the dual driving force of technology and market demand, and are also the core of our investment strategy.

**[Waterdrip

Capital](https://www.rootdata.com/zh/Investors/detail/Waterdrip%20Capital?k=MTEz) :**

2025 is the year when Crypto moves towards mass adoption and embrace regulation. For the primary market, our investment logic will be based on the following core trends:

Compliance and mainstreaming : The gradual clarity of the global regulatory environment and the launch of cryptocurrency ETFs mark the move of cryptocurrencies from the edge to the mainstream financial system.

Technological innovation and integration : The combination of AI and blockchain will give birth to new application scenarios and business models, and promote the further expansion of market size.

Cost efficiency and market demand : Stablecoins and RWA tracks can significantly reduce transaction costs, improve asset liquidity, and meet the actual needs of enterprises and investors.

Therefore, the track we focus on will innovate in these fields in RWA, AI+Crypto Infra, and the Pay Fi, DeFai paradigm around stablecoins.

The combination of traditional finance and blockchain (RWA track)

The global regulatory environment is gradually becoming clear, accelerating the compliance process of the crypto industry. In the future, blockchain technology will gradually be deeply integrated with the traditional financial system. The tokenization of government bonds, real estate and other financial assets, while improving the liquidity and transparency of these traditional assets, can also provide new collateral for the DeFi ecosystem. Recently, countries such as the United Kingdom and the United States have been exploring the issuance of digital bonds, which is undoubtedly the best example of positive signals of RWA's policies.

In addition, the continued rise in BTC prices not only promoted the outstanding performance of asset-driven crypto concept stocks represented by MicroStrategy in the secondary market, but also triggered a wave of "copy effect" - more and more listings Companies have begun to follow this model by enhancing their valuation and market attractiveness by including Bitcoin or other crypto assets on their balance sheets.

AI and Crypto

AI+Crypto will be the next market opportunity of hundreds of billions. We focus on the application of AI Agent in blockchain payment infrastructure and AI-driven decentralized financial tools. Stablecoins may become the preferred payment tool for AI agents, and high-throughput blockchains (such as Solana, Lightning Network, BASE) will benefit significantly from the popularity of AI. In addition, using DID technology to authenticate and fraud protection solutions for AI is also one of the future directions.

Stablecoins and payment innovation

Stablecoins have proven their value as a global payment tool over the past year, especially in reducing transaction costs and improving efficiency. We expect that 2025 will usher in large-scale adoption of stablecoins in corporate payments, especially small and medium-sized enterprises (such as catering, retail, etc.) will be the first to switch from credit card payments to stablecoin payments. In addition, as more companies realize the cost advantages of stablecoins, stablecoin issuance and payment integration businesses will usher in new growth opportunities.

In terms of investment strategies, we are more inclined to plan projects that are in the early stages and have the potential for large-scale adoption in the future. We are very optimistic about the direction of AI+Crypto, which includes infrastructure projects such as TEE (trusted execution environment) and Data Labeling (data annotation), as well as AI Agent application projects specifically for a certain vertical business scenario . Waterdrip Capital has also begun to systematically deploy this field since 2023-2024. For example, SWAN Chain, as an AI computing chain, is based on Green Field's forensic service BAS; and Alsa, which integrates AI+ payments; it can be said that AI has been trained. , the upstream and downstream of the industrial chain of computing, storage and then application are fully integrated.

But we will still keep our eye on other tracks and look forward to seeing more breakthrough technologies and business models emerge in 2025.

For the secondary market, we tend to buy targets that have real implementation scenarios and their own ability to make blood; including public chains, service providers, and agreement projects, which is very similar to companies with good cash flow performance in the traditional stock market that will buy back regularly The stocks of your own company; secondly, you can pay attention to the crypto concept in the stock market; last year we released a research report on crypto concept stocks. As mentioned above, in addition to asset-driven MSTR, we also analyzed such as MARA. mining concepts and infrastructure concepts, as well as exchange concepts, payment concepts, etc. Therefore, in the secondary market, we will focus on placing stocks with related concepts.

**[HashKey

Capital](https://www.rootdata.com/zh/Investors/detail/HashKey%20Capital?k=MTg0) , Partner, Xiao Xiao:**

2025 Investment Outlook:

Focus on application fields, especially various out-of-circle tracks and community-driven scenarios. The second half of 2025 will gradually summarize the pain points in application and explore a new round of infrastructure/tool ​​layer.

Continue to adopt the first-level linkage strategy, the first-level focus on digging projects with reasonable or undervalued early valuations, the second-level information channel is based on the first-level information channel, adopt a more flexible approach to expand the scope of investment targets, and use lending, derivatives and other methods to control risks. .

Key tracks:

1. Crypto AI : autonomous agents and multi-agent systems, intent-based trading agents, smart money agents, agents combined with tools, data services, agents platforms (launchpad, marketplace, etc.), etc.
2. Consumer dapps related : Applications with potential to get out of the circle, such as payment/stablecoin, RWA, trading, games, advertising, Depin, etc.
3. New concept : Referring to the logic of user attention, a concept that small-scale layout is easy to attract attention.
4. Ecology : Continue to pay attention to Solana, Ethereum, Bitcoin ecosystems, and explore new opportunities in new ecosystems such as Base, Sui, Berachain, Monad, and Movement.

**What suggestions can you share for projects planned to finance in

2025?**

**[IOSG

Ventures](https://www.rootdata.com/zh/Investors/detail/IOSG%20Ventures?k=MTcy) :**

• To eliminate the false and preserve the truth, first think about what the structure and ability of your own team are suitable for, find the positioning and PMF that suits you, and clearly show it to investors, while retaining a way of thinking that flexibly adjusts direction.
• You need to have a clear profit model and token economic model, and think clearly about why tokens are needed and what tokens are used for. Investors will pay attention to how the project generates revenue, how tokens increase value, and design a reasonable incentive mechanism.
• The Crypto financing environment in 2025 will focus more on substantive value creation rather than concept hype, requiring differentiated competitive strategies and community-driven GTM methodology logic.

**[Bing

Ventures](https://www.rootdata.com/zh/Investors/detail/Bing%20Ventures?k=MTE4Mzg=) , General Partner, Bruce Lan:**

For entrepreneurial teams in 2025, the financing environment is more complex but full of opportunities. Here are some of our suggestions:

Suggestion 1: Engage the community in depth

At present, community users have become an important driving force for the success of the project. The team needs to design a fair and transparent token allocation mechanism, which not only motivates investors, but also attracts core users to join. Users are no longer just investors participating in the project, they are also part of the ecosystem, which directly affects the future development of the project.

Suggestion 2: Follow Dex 's trend

The mainstreaming trend of decentralized exchanges cannot be ignored. Dex provides better liquidity and transparency. Many popular projects will be preferred to list on Dex, creating market popularity, and then force centralized exchanges to follow up and support. This trend brings greater autonomy to projects and also broadens financing channels.

Suggestion 3: Tell your story clearly

A clear narrative is crucial in a competitive track. The team needs to be able to accurately convey the core value of the project, especially the point of combining technological innovation and market demand. A good story can help the team stand out among investors and community users.

Suggestion 4: Focus on long-term community value

Financing is not only to solve short-term funding needs, but also an opportunity to build long-term community trust. Through transparent governance and fair mechanism design, the team can attract users to continue to support the project ecosystem and lay the foundation for future development.

Summarize:

From an investment perspective, we are optimistic about the overall trend in 2025. Especially in the areas of the combination of blockchain and AI, the improvement of DeFi infrastructure, and the gradual entry of Web3 technology into the mainstream market, we have seen a lot of opportunities. At the same time, for projects planned to finance, we recommend that the team pay more attention to community construction, keep up with the trend of decentralized transactions, and win the trust of the market through clear project descriptions. Future competition is not only a competition of technology, but also a reflection of trust and value.

**[Waterdrip

Capital](https://www.rootdata.com/zh/Investors/detail/Waterdrip%20Capital?k=MTEz) :**

1. Adhere to long-termism and strengthen cash flow management

The current crypto market may be in a bull market cycle, but the project party needs to be prepared to face the dull market conditions in the next 2-3 years. Good cash flow management and hematopoietic ability will be the key to project survival and development. If you are aiming to do projects that have real business implementation, then when financing, you should fully consider the efficiency of funds and formulate long-term financial plans.

2. Focus on the integration opportunities in traditional industries

With the deep integration of blockchain technology with other industries, project parties should actively seek cooperation or financing opportunities with traditional industries. Financing of VCs in traditional industries can bring more support to projects

3. Establish communication channels with regulatory agencies and pay attention to regulatory policies in the crypto industry

As the global regulatory environment becomes clearer, project parties should actively communicate with regulators to ensure project compliance. Compliance is not only the basis for long-term development of projects, but also the key to attracting traditional capital and institutional investors.

**[HashKey

Capital](https://www.rootdata.com/zh/Investors/detail/HashKey%20Capital?k=MTg0) , Partner, Xiao Xiao:**

Successful projects in 2024 are basically community driven, and paying attention to and grasping the needs of the community and users is the king.