Genuinely compelling or just fleeting hype?

In the fast-paced crypto landscape, the speed of change has hit new heights in 2024. This dynamic field is always on the move, rarely lingering on a specific technology or concept for too long. Within the emotionally-charged world of crypto, many players are racing to create compelling stories that will spark the next big trend. As we move past the midpoint of 2024's second quarter, this year's narratives have proven to be particularly captivating. Let's dive into the narratives that are genuinely compelling and those that are just fleeting hype.

Hot trending narratives in 2024:

• Restaking

• BRC20

• AI+DePIN

• Telegram Trading Bots

• Blockchain Modularity

• RWA

Liquid Restaking

On April 30, Eigenlayer officially announced its token and airdrop strategy, with the airdrop claim period commencing on May 10. This announcement unquestionably drew market attention around Eigenlayert. Furthermore, recent internal conflicts within the Ethereum community have thrust Eigenlayer further into the spotlight. The revelation that several Ethereum Foundation members had “restaked” themselves and accepted advisory roles with Eigenlayer ignited a public debate on X. As a result, growing skepticism about Ethereum's commitment to decentralization has begun to surface.

In the Ethereum ecosystem of 2024, Restaking has surfaced as a pivotal initiative. To fully appreciate the nuances of Restaking, you must first acquaint yourself with Liquid Staking Derivatives (LSD) and Liquid Staking Tokens (LST).

Background

Back in September 2022, Ethereum underwent the Merge transition, shifting from the Proof of Work (POW) to the Proof of Stake (POS) consensus mechanism. This change allowed Ethereum holders to stake and secure their ETH within Ethereum's smart contracts. Post the Shanghai Upgrade in April 2023, users were granted the flexibility to withdraw their staked ETH. Given that Ethereum's stake rate (13.8%) is considerably lower than that of other POS public chains (which ranges between 60%-70%), there exists enormous growth potential, should liquidity be attained. Acknowledging this potential, many including centralized platforms such as Coinbase and protocols like Eigenlayer, have proposed the concepts of joint staking and restaking.

ETH Staking & Restaking

ETH asset management. Decentralized platforms like Lido and Rocket Pool, along with centralized exchanges such as Coinbase and Kraken, provide users with the ability to stake ETH and receive liquid staking tokens (LST) at a 1:1 ratio. These LSTs, acting as ETH derivatives, can be utilized in a variety of income-generating activities on mainstream DeFi platforms. This process, referred to as liquid staking derivatives (LSD), allows for increased participation and flexibility within the DeFi ecosystem.

Restaking, represented by protocols like Eigenlayer, Renzo, Etherfi

EigenLayer is leading the Restaking revolution as the first platform to introduce the innovative concept of restaking. Users can stake ETH to earn eETH, which they can then circulate for dual benefits. The innovative narrative proposed by EigenLayer for the Ethereum chain suggests that active nodes (AVS) can participate in the network governance of other chains, effectively exporting Ethereum's security consensus to other chains and generating additional off-chain restaking income.

EtherFi, the latest addition to the Binance launchpool, seamlessly integrates both staking and restaking into its technical architecture and business narrative. By staking ETH to secure eETH and then circulating it, users can participate in ETHFI staking to earn platform points and simultaneously receive Eigenlayer's staking points. This unique Restaking model amplifies the appeal of the Restaking narrative and significantly exceeds typical market expectations.

In the wake of the successful implementation of the Ethereum secondary staking protocol, the Bitcoin ecosystem has witnessed tremendous growth in restaking.

BounceBit, the first project to go live on Binance Megadrop, spearheads the BTC restaking public chain. By implementing a dual staking system that involves native BTC and BounceBit (BB) tokens, BounceBit is able to optimize the value of native BTC.

Restaking watchlist: https://x.com/i/lists/1793174114280325426

BRC-20

On April 20th, Bitcoin conducted its fourth halving at a block height of 840,000, slashing the mining reward from 6.25 BTC to 3.125 BTC. Based on CoinMarketCap's data, the market values of top-tier BRC20 inscription tokens, ORDI, and SATS, took a nosedive of over 40% in the week leading up to Bitcoin's halving. This downward trajectory remains robust. On the flip side, the appeal of Runes has consistently been skyrocketing.

BRC20 has been a key narrative thread in the Bitcoin ecosystem in 2024. As a NFT housed on the most secure and decentralized network, BRC20 has steered market expectations towards BTCFi, surpassing the buzz around meme coins on SOLANA and BASE, and possibly outstripping the current meme mania. However, before diving into the BRC20 story, it's essential to clarify the relationship between BRC20, inscription, and runes.

Background

Inscription's inception traces back to Casey Rodarmor, the progenitor of the Ordinal protocol. At the tail end of 2022, Casey launched the Ordinals inscription protocol, a system of assigning sequence numbers to Satoshis in a methodical way, dubbed as ordinals. Bitcoin Inscription is essentially metadata inscribed on Satoshis via Ordinals, synonymous with "Bitcoin NFT". The associated act is known as inscription.

In March 2023, an anonymous developer brought the BRC20 protocol to light, a platform based on the Ordinals protocol, and minted the pioneer token asset ORDI. This standard leverages JSON data ordinal inscriptions to roll out token contracts, mint coins, and initiate token transfers, culminating in the release of BRC20 tokens such as SATS and RATS.

In September 2023, Casey put forth a novel concept of the Bitcoin FT protocol, sparking the ordi community to kickstart the development of the RUNE protocol. Upon the completion of Bitcoin's fourth halving, the RUNE protocol was officially launched. The soaring popularity of the No. 1-9 rune project led to substantial congestion on the BTC network, resulting in GAS costs soaring into the thousands.

In the journey of inscriptions and runes' evolution, wallets play a crucial role. They act as portals for users to tap into the inscription market, facilitating transactions, management, and transfers of inscriptions directly within their wallets, and connecting to various inscription NFT markets. OKX, Bitget Wallet, and Binance Web3 Wallet were pioneers among web3 wallets to support inscription.

Despite this, the inscription market is struggling with low trading liquidity due to diverse protocol standards, high transaction fees, and fragmented transactions. These obstacles significantly hinder the continued popularity of inscriptions. With Bitcoin's fourth halving and the sharp decline in inscription transactions, runes have emerged as a new focal point. However, it remains uncertain whether the introduction of runes can effectively solve the liquidity issues plaguing the inscription market.

BRC20 Watchlist: https://x.com/i/lists/1793209681760207339

AI+DePIN

I’ve been always asked which is a better track, AI or WEB3? In fact, this is not necessarily a binary choice. AI and WEB3 have many areas where they can be combined, such as decentralized computing, ZKML (ZK Machine Learning), AI games, oracles, etc. Let's first talk about AI+DePIN. DePIN, standing for Decentralised Physical Infrastructure Networks, primarily encompasses both physical and digital resource networks. Its essence lies in the tokenization of these resources, where it employs token incentives to spur user participation.

The emergence of DePIN as a hot new narrative in 2024 can be primarily attributed to its innovative combination. It incorporates traditional web2 products and services, while also leveraging the decentralized encryption technology of web3's blockchain. This unique blend has positioned DePIN at the forefront of tech narratives. According to data published by Coingecko, as of May 22nd, the total market value of DePIN tokens has exceeded $30 billion, with a 24-hour trading volume of over $1.4 billion.

This appears to be the most viable application for transitioning web2 users to web3, following RWA. DePIN is frequently paired with AI, as it has the ability to enhance AI by supplying data, computational capacity, and storage. This includes decentralized AI computing power, represented by Render on Binance. However, can this emerging narrative of DePIN truly engage a large user base? DePIN is still in its infancy. It is advisable for everyone to stay vigilant. Priority could be given to projects that have already launched tokens or are in the pipeline to do so.

DePIN Watchlist: https://x.com/i/lists/1793219273017671767

In conclusion, the crypto landscape in 2024 is teeming with new narratives including Liquid Restaking, BRC-20, and AI+DePIN, each offering unique opportunities and challenges. As we navigate these dynamic waters, it's crucial to separate the signal from the noise and discern the truly transformative narratives from fleeting hype. In our next piece, we'll delve deeper into the rest of the hot trending narratives- Telegram Trading Bots, Blockchain Modularity, RWA, SociaFi, and explore its potential implications for the crypto industry.