Breaking and Reinventing: Panoramic Outlook of the Crypto World in 2025

Author: YBB Capital Researcher Zeke

Preface

Starting from the inscription craze and ending with the victory of the first encrypted president, 2024 is coming to an end. This year, Crypto experienced a very unusual "bull market". The performance of copycats was weak, Meme's voice was the most popular, and in the end, all the money came to BTC. In general, although there are some troughs and unwillingness, Crypto is indeed moving in a more positive direction. In the upcoming 2025, we also have many directions worthy of attention. In this article, we will make a brief outlook for next year based on recent perspectives.

1. About AI

At the current stage, chain abstraction projects often pursue conceptual perfection too much, causing the technical implementation process to become extremely complicated, which ultimately affects the user's interactive experience. The implementation of projects containing Intent architecture is relatively complex, whether it is based on centralization (such as TG Bot), structure (a combination of on-chain and off-chain preprocessing), or distributed (such as Solver + Executor and other architectures) Design, these intentional projects often have some common problems. For example, users still need to have a considerable degree of understanding of DeFi, and the expression of intentions must be clear, accurate and simple. For the complex and vague intentions proposed by users, current intention projects are powerless and the scope of implementation is also quite limited. Therefore, from the time Paradigm proposed this concept in mid-2023 to today, the so-called intention-centered projects have always performed with little fanfare, and have not been of much help in guiding new users and lowering the user's operating threshold. . However, we all know that judging from the development path of the second layer of Ethereum, the market demand for both is still imminent.

Let’s review the development of Layer 2 in the past few months. Among the leading projects, the Layer 2 alliance represented by OP Superchain has grown day by day. Zksync’s Elastic Chain and Arbitrum Orbit will eventually form an own alliance along this path. These In the future, the alliance can achieve direct internal interoperability through interoperable clusters and other solutions to alleviate the current problems of excessive fragmentation and lack of interoperability in the second-layer ecological liquidity of Ethereum. The competition of dozens of chains will also be reduced to the competition of multiple forces. . But from a broader perspective, as the encryption market is improving day by day, new architecture Layer 2 projects such as Movement and Fuel are also competing to launch their own mainnets in order to obtain scarce liquidity in the altcoin market. For projects below the first echelon, fragmentation and lack of interoperability are still increasing. Virtual machines designed based on different architectures may even have wallet plug-ins that are not interoperable. Not to mention allowing new users to enter, for ordinary users of the blockchain, the entire second-tier ecosystem is extremely complicated, and the development of non-financial application chains will also encounter great resistance under this situation.

If Ethereum wants to introduce new users, ecological alignment is the biggest prerequisite. An ecosystem that requires users to be half-geeks to get started will never usher in "Mass Adoption". Judging from the performance of Solana and Ton in bucking the trend this year, the strategy of lowering user thresholds and providing a consistent, more Web2-like experience has obviously played an important role in ecological growth. To put it more directly, what these two ecosystems have done besides publicity and issuance is only to reduce the difficulty of asset issuance, and they are more indifferent to the chain in use. Therefore, a comprehensive solution that prioritizes experience is necessary for Ethereum. However, due to the consistent open attitude of Ethereum's core developers, it is naturally impossible to align the entire second-tier ecosystem through forced methods.

I think the only solution that can solve this problem first is AI browser agent. In the early days of the birth of ChatGPT, many people had imagined that AI would revolutionize APP interaction from point to point , and that it could operate across multiple APPs to form a comprehensive super APP. Taking tourism as an example, after receiving the user's travel needs, AI can automatically complete comprehensive planning such as booking tickets, customizing travel routes, arranging meals and time, etc. based on the user's complaints. If this AI also has long-term memory capabilities, then it can also arrange a solution that is more suitable for the user based on this memory.

Today, Google is about to launch a Gemini-powered AI browser agent, Project Mariner. In the example shown by Google Lab Director Jaclyn Konzelmann, after the Chrome browser installs the AI ​​agent extension, a chat window will pop up on the right side of the browser. The user can instruct the agent to perform tasks such as "Create a shopping cart from a grocery store based on this list." Then, the AI ​​agent will automatically navigate to a grocery platform and add the items to the shopping cart to enter the checkout interface. After confirming that everything is correct, the user will check out by themselves (the agent does not have payment authority). A similar product, OpenAI, will also be launched next month.

It is worth mentioning that although Google’s Project Mariner is currently only available to selected testers, I have already experienced similar agents developed by some projects in Crypto for ordinary users. Judging from a few hours of trial, the current agent's accuracy in realizing complex and fuzzy intentions can reach 60 to 70% (the cursor operation speed is relatively slow), and it can complete tasks such as Dex tokens in various public chains on its own. Transactions and even cross-asset operations from Ethereum to the second layer, all I need to do in the process is to inform it of the intention and enter the wallet password.

Of course, this base still needs to call the API of the centralized model, so what is the collision that Crypto can have with it? I think that in addition to becoming an intent solution with a better experience, the AI ​​browser proxy will also promote the explosion of AI wallets, decentralized computing power, and decentralized data projects next year.

Thinking about a simple question, in the past few years with the rapid development of AI, why has such a wonderful idea as Agent not been realized until today? In fact, looking back at the development process of OpenAI, it is not difficult to find that the development of pure language models is always faster than the development of image generation and other models. This is because the Internet itself is a huge corpus, which can provide inexhaustible text materials for training. , what limits the development of language models is more computing power and energy. While agents require a lot of manual marking and feedback, and the reasoning process is expensive, Crypto naturally has the ability to obtain labor through incentives. In this economic system, upper-level users can provide a large amount of tagged data and feedback in a decentralized manner to obtain Tokens. The bottom layer can also integrate decentralized computing power and data projects. After training is completed, it can also communicate with wallets and DeFi projects through SDK. Integrate to achieve a true AI wallet and ultimately form a closed loop. Ideas about other AI agents can also be derived from this, because any AI agent suitable for Web3 will require computing power, marking, and feedback to "grow".

2. Stablecoins

Stablecoins will always be a battleground for military strategists, and it is also a track with extremely high barriers to entry in Crypto. As for its application value, it has been widely recognized even outside the industry. For example, this year, several giants in the traditional financial field have also entered the stablecoin market, including PYUSD launched by PayPal, USDb launched by BlackRock and Ethena, and AUSD launched by VanEck (serving Argentina, Southeast Asia and other regions).

As Tether and Circle continue to deepen their dominance on this track, new entrants to stablecoin issuers have gradually divided into two categories. First, issuers of French-backed stablecoins have begun to turn their attention to emerging markets and specific application scenarios, mainly in South America. Algorithmic stablecoins are also generally turning to stablecoins that use low-risk financial products as the underlying assets. For example, we mentioned in the previous article Ethena and Usual mentioned in the article. Judging from the trend, next year there will be more Delta-neutral stablecoins to compete for short liquidity in Cex, and hedging assets will gradually expand from BTC and ETH to public chain tokens with higher risks and lower liquidity to compete. The only remaining sinking market. As for the Usual stablecoin, which is based on short- and medium-term U.S. Treasury bonds, I think more innovations are in the protocol tokens and income methods. In terms of the type of RWA assets, there is no better choice than short- and medium-term U.S. Treasury bonds, but relatively Compared with the limited liquidity in Cex, the competition for such stablecoins will be smaller and the upper limit space will be larger.

In general, the development of stablecoins is gradually moving towards the pursuit of more stable underlying assets and decentralization in governance. However, what I hope more is that there will be some fully decentralized and non-super stable currency protocols emerging next year.

3. Payment

With the compliance and accelerated adoption of stablecoins in various countries, the payment track downstream of stablecoins will also become a new focus of competition. Heterogeneous public chains with high TPS and low Gas, such as Solana and Move, will become the main infrastructure for payment applications. . Traditional payment is already an extremely mature and involuted Red Ocean market. What changes can blockchain provide? First, there are two simple and often mentioned points. One is to optimize cross-border payments and eliminate pre-financing requirements, making cross-border remittances faster, cheaper and easier, and solving the trillion-dollar prepayment problem in the traditional system. . The second is to serve emerging markets. I have also mentioned this in previous articles. In regions such as Asia, Africa and Latin America, the application value of stablecoins has been reflected. Strong financial inclusion has enabled residents of third world countries to effectively To cope with the high currency inflation caused by government instability, stablecoins can also participate in some global financial activities and subscribe to the world's most cutting-edge virtual services.

The concept "PayFi" proposed by Solana Foundation Manager Lily Liu at the 7th EthCC Conference provides more imagination for blockchain combined payment. This concept involves two cores. The first is timely settlement, which is T+0 settlement. PayFi can achieve same-day settlement, or even multiple settlements per day. The delays and complexities of the traditional financial system that should be involved in the entire process will be eliminated, greatly increasing the speed of capital flow. The second is buy now, pay later (BNPL), which is "Buy Now, Pay Never". For example, a user deposits $50 into a lending product and buys a cup of coffee worth $5. Once the accumulated interest reaches $5, that interest will be used to pay for the coffee and the funds will be unlocked and returned to the user's account.

There are many ideas that can be extended from this. For example, in terms of use scenarios, the financing needs of emerging projects can be used to form more secure and transparent entry and exit in the blockchain through PayFi. Currency exchange in tourism no longer requires the use of various physical finance. Free control over institutions, payment and collection time (delayed collection earns interest, early payment earns discounts). The income methods will also be more diversified. In addition to depositing stable coins into lending products to obtain interest as mentioned above, I personally think that the types of stable coins should also be allowed to be converted at will. With the emergence of emerging stablecoins in the future, users can choose the most appropriate stablecoin type at any time based on their personal risk tolerance, so that they can obtain stablecoin protocol tokens and higher stablecoin interest at the same time. For DeFi, if this payment system can become mainstream, its growth space will be unimaginably huge.

4. Dex

We have already mentioned the fragmentation and lack of interoperability of Layer 2 in the first section. In fact, this development path still has a problem, that is, excess block space. The development of Infra is far better than the development of Dapp. This problem will cause a large number of long-tail chains to be naturally eliminated within a few years. It is also an extremely troublesome problem for Ethereum, which has misguided DA pricing and cannot get positive feedback from Layer 2.

Looking back at this round of growth against the trend, public chains basically rely on their own strong community, ecology, and publicity advantages, and provide these advantages to the asset issuance platform to achieve rapid growth in overall TVL. Therefore, not every Layer 2 can replicate this eyeball economy, and the lack of super applications is still a real problem that will be faced next year. Going with the trend, in addition to what we mentioned above, the related needs of AI Agent in the future may be a way out. Also obvious trends in the short term include on-chain order book Dex, privacy, payment-related stacks, decision-making tools, etc.

I am personally optimistic that on-chain order book Dex will become the mainstream of the next generation of Dex. After all, from the development of AMM, the complexity of its technical path is constantly doubling, but the efficiency increase is becoming more and more limited. This is what we are talking about. It has also been mentioned in articles related to Uni. However, for the second layer, the limitations of performance and Gas are still very obvious. The improvement of matching algorithms and the innovation of Gas solutions will become key challenges.

5. Asset issuance remains the main theme

From 23 years to today, that is, from Inscription to today’s AI Meme platform, the method of providing asset issuance has been a hot topic in the past year. If we extend this time span, in fact, from the ICO era to the present, asset issuance can be regarded as the only theme in the currency circle. It’s just that the external package and the threshold for distribution are changing. On the bright side, users’ gaming needs have promoted the advanced development of Infra and DeFi. As this technology becomes known and recognized by the world, blockchain can enter the mainstream and integrate into reality. Looking at the bad side, this game has become more pure and absurd, and the reduced difficulty of asset issuance also means that this dark forest is more dangerous. Nowadays, with just a few pictures and a few words, a grand zero-sum game begins. Why don't we lead it back to a more positive side? Promote the progress of the industry in the game.

For example, some current AI Memes have begun to develop into practical agents instead of the nonsense AI Agents of earlier versions. The recently popular DeSci can also be called the "scientific research version of ICO". Although the current core is driven by Meme, in the long run DeSci combined with the various advantages of the blockchain can make traditional scientific research more transparent, easy to disseminate, easy to finance, and easy to comminicate. But whether it will finally be implemented and how it will evolve remains a question mark.

In fact, I have mentioned similar ideas to DeSci in my article about GameFi, such as the shortage of independent game funds and personnel, and how to effectively promote the development of independent games through blockchain. The problems with blockchain financing are that the threshold for asset issuance is too low, there are too few restrictions, and the financing capacity is too strong (it can also be said that the entry threshold on the chain is extremely low). How to limit the use of funds through rules and force project parties to continuously create truly valuable things is also the focus of our thinking.

Let gamers play and builders move forward, which is the prerequisite for the continuous development of blockchain. We may see more versions of “ICO” next year, but what I hope is that the next “DeFi Summer” can be promoted in this gaming feast. ****