Table of Contents

1. Macroeconomic Overview and Predictions

   • Interest Rates and Monetary Policy

   • Inflation Trends

   • Geopolitical Dynamics

   • Regulatory Environment

2. Predictions and Emerging Trends for 2024

   • Public Chain Developments

   • BTC Ecosystem

   • Enhanced UX for Mainstream Adoption

   • Web3 Application Renaissance in 2024

   • DeFi 2.0

   • AI Integration in Blockchain

   • DePin and Ownership Economy

3. Key Narratives 2024

   • New Infrastructure/Technology: AA, Intents, AI x Web3, DePIN, Modular Bridge, ZK, etc.

   • New Assets and Derivatives: BTC DeFi, LRTs, DeFi 2.0, etc.

   • Mass Adoption Dapps: Next-gen Onramp, Autonomous World, Institutional-grade DeFi, etc.

4. Trade and Farm Guide

   • Trading Strategies: Embracing Technology and Risk Management

   • Farming Airdrops: A Key Strategy

5. Appendix: Noteworthy Projects for 2024

Macroeconomic Overview and Predictions

Interest Rates and Monetary Policy

• Central banks' interest rate policies have a direct impact on crypto markets by influencing liquidity and investor risk appetite. The entire interest rate cycle, including the potential for a downturn, will significantly affect crypto valuations.

• Cryptocurrencies' value proposition as a hedge against inflation could be highlighted in an environment where global inflation or deflation trends intensify.

• Key Predictions:

  • Bitcoin halving and anticipated approvals of ETH ETFs could catalyze increased institutional adoption, potentially counterbalancing the tightening monetary policy's adverse effects.

Geopolitical Dynamics

• The likelihood of crypto-supportive governments emerging by 2025 and the potential impact of the 2024 U.S. Presidential Election could significantly influence crypto markets. These events might drive demand for cryptocurrencies as safe havens or disrupt markets depending on the geopolitical climate and policy outlooks.

Regulatory Environment

• The regulatory landscape is poised for significant changes, with the SEC's evolving stance on Ethereum and approval of Bitcoin ETFs suggesting a shift towards greater acceptance of cryptocurrencies as commodities.

• The implementation of the MiCA regulation in the EU, and broader regulatory clarity could renew institutional interest in cryptocurrencies, marking 2024 as a pivotal year for regulatory acceptance.

• Developments like the use of smart contract wallets and applications such as Worldcoin, which has attracted millions of new users, underscore the need for regulatory frameworks that support innovation while ensuring market integrity.

Predictions and Emerging Trends for 2024

Public Chain Developments

• L2 as a Central Battlefield: The explosion of the L2 ecosystem, driven by reduced fees and the dencun upgrade, will broaden the scope of DeFi, gaming, social, and DePIN applications. Competition among L2 platforms and between L2 and high-performance public chains like Solana will be a focal point. The introduction of economic mechanisms in zkSync and potential breakthroughs in StarkNet could initiate new growth avenues for fully on-chain gaming and other applications.

• Ethereum's Role: Ethereum's shift towards serving as a foundational B2B blockchain, with most user interactions moving to L2/L3 and select high-performance L1s, emphasizes its central role in the crypto ecosystem. The evolution towards modularity and Ethereum's position as a critical settlement layer highlight its significance in capturing ecosystem growth. Focus on main EIP Scheduled for 2024: ERC-4337 > EIP-4844 > EIP-3074 > EIP-5003

• Deflation and Staking: Ethereum's ecosystem is expected to experience significant deflation, enhancing its value capture. The focus on staking and re-staking will further reduce the circulating supply of ETH.

• Modularity and DA Competition: Modularization, especially in the DA layer, and the integration and competition between ecosystems like Cosmos and Ethereum, will be key narratives. The demand for third-party DA solutions underscores the urgent need for scalability and efficiency enhancements on L2 platforms.

• Appchain Emergence: The trend towards appchains—blockchains tailored to specific applications like gaming or DeFi—is growing. Tools like OP Stack and Arbitrum Nitro support this trend by enabling appchains to leverage liquidity from larger public networks. 2024 will likely see further adoption of appchain toolkits by major public chains, enhancing the "hub-and-spoke" model within the blockchain ecosystem. Rollup-as-a-service (RaaS) platforms such as Caldera and Eclipse could become critical in facilitating this architectural shift.

• Growth of Cosmos and Solana: Continuous development in the Cosmos and Solana ecosystems, along with their integration into the broader crypto ecosystem, highlights the ongoing evolution and potential for new market entrants to capture significant value.

• VM Innovation & Liquidity Fragmentation: Exploration of VM-agnostic solutions and liquidity fragmentation through Chainlink CCIP, Wormhole, and LayerZero, alongside the emergence of MoveVM, indicates a critical phase in virtual machine evolution and cross-chain liquidity solutions.

BTC Ecosystem

• Innovations and Integration: The BTC ecosystem is undergoing significant exploration, including decentralized indexing, evolution of Ordinals, cross-chain decentralization, zk-proofs, and L2 solutions. Progress in these areas could lead to the development of the BTC ecosystem and faster integration with Ethereum and other blockchain ecosystems.

• Modular and Cross-chain Advances: The advancement of modular blockchains and cross-chain technology could merge the ecosystems of Ethereum, BTC, and Solana, potentially unveiling numerous yet-to-be-known projects. A notable pathway could be Ethereum acting as a second layer for BTC, enhancing the integration between BTC and Ethereum.

• BTC Narratives Remain at the Forefront: The focus on narratives such as Ordinals/BRC-20, approval of spot Bitcoin ETFs, and the halving event in 2024 continue to position Bitcoin at the forefront of investor attention. The approval of spot ETFs could bring significant liquidity to the crypto market, marking mainstream acceptance of Bitcoin as a legitimate asset.

Enhanced UX for Mainstream Adoption

• Bridges, Bots, Wallets, and Oracles: Essential tools and middleware are evolving to improve usability, security, and efficiency. This includes advancements in cross-chain interoperability, automated trading bots, more secure and user-friendly wallets, and accurate decentralized oracles for real-time data.

• Strategic UX Enhancements: 2024 is poised to witness concentrated efforts on refining crypto UX, introducing innovations like Intents and sophisticated wallet solutions to streamline user interactions and enhance security protocols.

• Account Abstraction & Identity Solutions: Implementation of account abstraction wallets, such as Creso and Avocado, alongside ERC-725 for universal profiles and on-chain identity, marks significant strides towards simplifying user engagement with blockchain services.

• Intent-Based Transactions: Enhancement in transaction efficiency and awareness in both perpetual and spot markets through platforms like IntentX, SYMMIO, and CoWswap. Transitioning from basic trading bots to advanced trading terminals, we see a movement towards equalizing the playing field for traders, with notable advancements from Unibot to Thunder Terminal.

• Institutional DeFi Tools: Introduction of tools like Brahma signifies an evolution in managing multi-sig operations, indicating a broader institutional embrace of DeFi protocols.

• ZKPs as a Modular Interface: ZKPs are becoming a key interface between different components of modular blockchain architectures. This development promises greater smart contract composability and flexibility for developers, potentially leading to more privacy-centric applications.

DeFi 2.0: A Technological Leap Forward

• Restaking: Concepts like restaking are gaining traction, with 10+ LRTs competing for TVL. providing additional security to decentralized services and generating extra rewards for participants.

• Perpetual Protocols' Ascendance: DeFi's perpetual markets are poised for exponential growth in 2024, with platforms like Synthetix (SNX), GMX, Gains Network (GNS), and dYdX expected to quintuple their transaction volumes compared to 2023. Despite the bull market's narrative shifts, perpetuals are anticipated to remain among the best foundational sectors. Despite the perpetual market becoming increasingly saturated with new entrants, the demand for innovative and uniquely architected solutions continues, driving the need for differentiation and novel offerings within the space. The amalgamation of cutting-edge technologies like AI with the burgeoning DeFi sector, particularly in perpetual protocols, indicates a burgeoning marketplace for avant-garde financial instruments and services.

• Bitcoin DeFi: The success of platforms like Lido in the LSD space indicates a strong demand for Bitcoin in DeFi, potentially leading to a "DeFi summer 2.0" on Bitcoin.

• Real-World Asset (RWA) Growth: The acceleration of institutional adoption will likely drive the development of critical infrastructure components, such as decentralized identity solutions, oracles, and interoperability mechanisms, essential for a comprehensive RWA ecosystem.

• On-Chain Liquidity Dynamics: The market anticipates a surge in on-chain liquidity and financial activities. Innovations in liquidity management and Request for Quotation (RFQ) systems are set to optimize capital efficiency and mitigate challenges like impermanent loss. With RFQ systems fostering competitive pricing and MEV protection, the deployment of these high-efficiency models is expected to expand with the continuous advancement of on-chain trading infrastructure.

• Collaborative Ecosystems vs. Niche Chains: DeFi protocols are at a crossroads, choosing between creating bespoke chains for tailored needs or integrating within collaborative ecosystems like Arbitrum derivatives, showcasing platforms like GMX and Aevo, each carving out their niche in the perpetuals domain.

• Intention-Based Trading Platforms: Approximately 50% of Ethereum's decentralized exchange volume is projected to transition towards intention-based trading platforms, enhancing price discovery mechanisms and mitigating front-running risks.

Web3 Application Renaissance in 2024

• In the evolving landscape of public blockchains and L2 ecosystems, the competition among public chains for breakout applications is intense, capital are strategically focused on incentivizing application development and enhancing TVL to attract ecosystem participation. In this context, applications capable of creating breakthroughs and generating significant market excitement (FOMO) receive prioritization over those fully aligning with crypto-native thesis. Projects that can invoke user FOMO, have a solid product foundation, and retain users will be rewarded by the market.

• Growth of Fully On-chain and Web2.5 Games: The gaming sector continues to evolve, with projects exploring fully on-chain ecosystems, hybrid models, and autonomous worlds. This evolution could significantly impact user adoption and open new avenues for blockchain integration into mainstream gaming. While fully on-chain game logic may limit game types and playability, potentially increasing user barriers, composable NFT gameplay could be an early beneficiary in a not fully on-chain logic environment, offering a new growth vector for the market.

• Web3 Gaming on Layer 2/3: Anticipation builds for a breakthrough in Web3 gaming on Layer 2 and Layer 3 solutions (e.g., Arbitrum, StarkNet), with the potential for games surpassing one million users—a milestone yet to be achieved in 2023. The advent of game-centric chains on platforms like Arbitrum could spearhead this evolutionary leap, offering interoperability among a wider array of gaming experiences. Platforms like Immutable, XAI Games, and WINR operates as independent blockchains.

• Tokenized Social Experiences: Innovations in tokenized social experiences, such as those pioneered by friend.tech, highlight the potential for novel use cases in consumer engagement through blockchain technology. These developments suggest an expanding role for tokenomics and community governance in shaping online interactions and digital identities.

• NFT and Meme Revival: Platforms like Blur are expected to diversify into NFT derivatives and potentially penetrate L2, BTC, and Solana's NFT markets, positioning themselves as key disruptors in 2024. A resurgence in NFTs, memes, and inscriptions could catalyze trading volumes and foundational markets for NFT derivatives, underscored by celebrity forays into these domains.

• UI Layer Composability: 2023 unveiled significant advancements in UI layer composability, exemplified by Unibot. The forthcoming year promises expanded opportunities beyond Telegram chatbots, fostering a more integrated trading environment within the web. This evolution anticipates a richer composability landscape, not just for asset ledgers but also for social platforms, heralding a new era of interactive and immersive Web3 applications.

• Gaming and SocialFi Convergence: Immutable and Friendtech, alongside emerging platforms like Beam and LensProtocol, are setting the stage for a convergence of gaming, social interaction, and financial mechanisms within the Web3 ecosystem.

AI Integration in Blockchain: Catalyzing the Crypto Evolution

• AI and Blockchain Convergence: The integration of AI with blockchain, particularly through technologies like zero-knowledge proofs (ZKPs), is advancing. This integration could revolutionize data privacy, enhance decentralized decision-making, and create new incentives within the blockchain space.

• Emerging AI Protocols on L2 and High-Performance Chains: While AI's practical application within the blockchain remains nascent, its role as a pivotal narrative in 2024 is undisputed. Advancements are expected in the deployment of AI protocols over Layer 2 solutions and high-performance blockchains, indicating a confluence of AI capabilities with decentralized architectures.

• Transformation Across the Crypto Ecosystem: The fusion of AI with blockchain technology heralds a paradigm shift, promising to unlock novel functionalities and streamline efficiencies across the crypto sphere. This integration is poised to revolutionize various domains by decentralizing computational processes, enabling the monetization of decentralized AI services, empowering off-chain autonomous agents, and pioneering decentralized computing networks. Notable projects like Autonolas, Bittensor, Fetch.ai, and TauLogicAI exemplify the diverse potential applications of this synergy.

• Market Validation and Anticipated Developments: Initial ventures such as $OLAS, $TAO, $RNDR, and $AGRS have already demonstrated the market's receptivity to AI-integrated projects, achieving significant valuations and underscoring the sector's potential. The year 2024 is anticipated to be a milestone, showcasing the fruition of these initiatives and providing a clearer perspective on the transformative impact of combining AI with blockchain technology.

DePin and Ownership Economy

• Breakthroughs in DePin: The DePin sector, particularly on platforms like Solana and Arbitrum, is in its early stages of construction, with more exploratory projects expected to emerge.

• Decentralized Networks: Blockchain technology allows users to reclaim sovereignty over resources traditionally controlled by large entities. This shift towards decentralized physical network infrastructure (DePin) and decentralized social media (DeSoc) is gaining significant traction, driven by advancements in infrastructure development, increased awareness, and the growing user base in the crypto domain.

Key Narratives 2024

New Infrastructure/Technology

Account Abstraction & Intents-Centric Design

• Description: A move towards more intuitive blockchain interfaces focusing on user intentions rather than the complexities of blockchain operations. This simplification is pivotal for enhancing accessibility and fostering wider adoption.

• Projects/Concepts:

  • Intent-Centric Architecture: Solutions focusing on simplifying user interactions with blockchain technologies.

  • User Intent Focus: Platforms that prioritize the intentions of the user to streamline transactions and interactions, making blockchain technology more accessible to non-technical users.

AI X Blockchain

• Description: Integration of AI with blockchain is a top narrative for 2024, featuring decentralized AI training, inference, and the deployment of AI agents/bots in dApps. This convergence is expected to capture the attention of both the crypto community and traditional Web2 institutions.

• Projects/Concepts:

  • AI-Driven Blockchain Solutions: Projects leveraging AI to optimize blockchain operations, enhance security, or offer predictive analytics.

  • Decentralized AI Applications: Applications utilizing AI for a variety of use cases, including trading bots and automated decision-making within the blockchain space.

DePIN

• Description: Decentralized Physical and Digital Infrastructure Networks (DePIN) are gaining VC interest, bridging the gap between speculative crypto applications and tangible impacts on real-world systems.

• Projects/Concepts:

  • Decentralized Data Storage and Physical Resource Networks: Projects like decentralized WiFi networks, ride-sharing platforms, and IoT networks that utilize blockchain for management and operations.

  • Decentralized WiFi and Energy Grids: Blockchain platforms managing decentralized networks for physical utilities.

  • Decentralized Computing and Storage Solutions: Utilizing blockchain for distributed computing power and data storage, highlighting Solana's role as a prominent network for such applications.

Cross-Chain & Modularization

• Description: Focus on creating flexible and interoperable blockchain ecosystems that can easily interact and exchange data or value, with modularization seen as the end goal for platforms like Ethereum.

• Projects/Concepts:

  • Omnichain Solutions and Layer 3 Innovations: Technologies and platforms designed to facilitate seamless interactions across different blockchain networks, enhancing the composability and efficiency of the blockchain ecosystem.

ZK and Cryptography

• Description: Advances in zero-knowledge proofs (ZKPs) and cryptography are crucial for improving privacy and security in blockchain transactions.

• Projects/Concepts:

  • ZKML (Zero-Knowledge Machine Learning): Innovations that leverage zero-knowledge proofs for privacy-preserving machine learning applications on blockchain.

  • Decentralized Identity Solutions: Platforms offering secure and private identity verification methods, Utilizing ZKP for privacy-preserving transactions and interactions on the blockchain. potentially revolutionizing how personal information is shared online.

New Assets and Derivatives

RWA/LSD Derivatives

• Description: The tokenization of Real World Assets (RWA) and the development of Liquidity Staked Derivatives (LSD) indicate a significant expansion of blockchain's utility in traditional finance (TradFi), potentially leading to more institutional funds flowing into the space post-BTC ETF approval.

• Projects/Concepts:

  • Innovative Restaking Token: Innovations that allow staked assets to be reutilized within the ecosystem, enhancing liquidity and yield opportunities.

  • Tokenized Treasuries and Credit Instruments: Platforms offering tokenized versions of traditional financial assets, enabling on-chain investment in real-world assets.

  • Synthetic Assets Platforms: Creating blockchain-based representations of real-world assets, allowing for broader exposure and participation in traditional markets.

DeFi 2.0

• Description: Evolving sophistication of blockchain-based financial products, providing users with advanced options for risk management and speculative investments.

• Projects/Concepts:

  • Structured Products and Options: Development of on-chain options, futures, and other derivative products that offer hedging and speculative opportunities.

  • Intent-Based Trading Platforms: Enhancing market efficiency by aligning trading with user intentions, thereby streamlining transactions.

  • Perpetual Contracts Growth: Platforms such as SNX, GMX, GNS, and dYdX leading the charge in expanding DeFi's derivatives market, indicative of the sector's maturation and increasing demand for sophisticated financial instruments.

BTC Ecosystem and Ordinals

• Description: Expansion of Bitcoin's utility through innovations in DeFi, NFTs, and other applications showcases the evolution of the largest cryptocurrency by market cap.

• Projects/Concepts:

  • Bitcoin-based NFTs and Digital Assets: Projects exploring new use cases for Bitcoin, including NFTs and decentralized finance applications.

Mass Adoption Dapps

Next-Gen Gateway

• Description: The development of more user-friendly and versatile crypto trading and storage solutions is essential for mass adoption.

• Projects/Concepts:

  • Cutting-Edge Crypto Wallets and On-Chain Prop Firms: Innovations in wallets that offer improved usability and advanced features for a broader user base.

Gaming

• Description: Gaming is seen as a key gateway to mass adoption, with the potential to onboard new users and facilitate microtransactions through engaging and immersive experiences.

• Projects/Concepts:

  • Game Engine, SDK, and Developer Tooling: Platforms and tools that enable the development of blockchain-based games, ranging from fully on-chain experiences to hybrid Web 2.5 games.

Global Payment Solutions

• Description: Innovations in payment technologies aim to revolutionize cross-border transactions, making them more efficient and accessible.

• Projects/Concepts:

  • Blockchain-Based FX and Remittance Solutions: New stablecoins and payment platforms that offer modernized solutions for global transactions.

SocialFi and Identity

• Description: The emergence of decentralized social media and identity solutions emphasizes user sovereignty and privacy, marking a significant shift in online interactions.

• Projects/Concepts:

  • Decentralized Social Media and Privacy: Platforms like Friend.tech that explore decentralized social networking and identity management, leveraging blockchain to empower users.

Trading and Farming Guide

Trading Strategies

Identifying and Capitalizing on Emerging Ecosystems

• Investment in Early-Stage L1 and L2 Chains: Focus on Layer 1 and Layer 2 tokens that have shown significant performance but whose ecosystems are still developing. These projects are poised for growth as their increased valuations enable them to attract liquidity, protocols, and users through incentive programs.

• Strategy Playbook:

  1. Spot trending L1/L2 chains with a strong community and upcoming catalysts.

  2. Use resources like DeFillama to discover protocols within these ecosystems.

  3. Invest in innovative projects or those established as go-to protocols within their category.

70% Long-Term Investment + 30% Rotational on Narratives & Meme

• Strategic Portfolio Allocation: Dedicate a substantial portion (at least 70%) of the crypto portfolio to long-term holdings. The remaining 30% can be utilized for trading based on news, narratives, and potentially high-reward memecoins.

• Selective Narrative Investment: Concentrate on narratives with the highest potential for retail and institutional interest, including alternative L1s & Modular Ecosystem, Gaming, crypto AI, and DeFi2.0 (RWAs, LSD/LRT, Perps)

• Rationale: Projects within these sectors are accessible to retail investors and have historically performed well in bull markets. AI and real-world assets, in particular, are attracting attention from traditional finance and institutional investors.

• Narrative Lifecycles: Understand that narrative dominance is fleeting; a narrative's peak performance is usually followed by a significant downturn.

• Profit Optimization: Timing is crucial; knowing when to enter and exit investments based on narrative cycles can significantly impact profitability.

• New vs. Established Narratives: While new narratives often offer the highest rewards, established ones with solid technology and product-market fit can provide steady returns.

• Innovation Leaders: Projects that initiate new narratives often maintain their dominance, underlining the importance of not dismissing opportunities based on perceived lateness.

Farming Airdrops: A Key Strategy

• Anticipating Airdrops: With several significant airdrops announced in 2023 and expectations of more in 2024, actively participating in airdrop farming can be a lucrative strategy. Given the market conditions to continue to improve and retail investors to start coming back, I anticipate several even bigger airdrops this year. Key airdrops to watch include Eigenlayer, LayerZero and other notable projects.

• It’s time to farm airdrops🧑‍🌾

  • Staking $TIA, $PYTH, $INJ & other tokens for list of projects airdrops

  • Restaking LST on EigenLayer via LRT Protocols (Kelp, EigenPie, EtherFi, etc.)

  • Use tokenless protocols of popular Eco for Airdrops

Appendix: Noteworthy Projects for 2024