Original source: a16z

Original translation: 1912212.eth, Foresight News

Based on feedback from partners in the fields of American Dynamism, Bio, Consumer Technology, Crypto, Enterprise, Fintech, Gaming, Infrastructure, etc., we have released a comprehensive list of large ideas that technology builders may explore in the coming year. Here are some of the trends that some crypto partners think are exciting in 2024.

Entering a new era of decentralization

As we have seen time and again, when control of a powerful system or platform is in the hands of a few people (not to mention a single leader), it becomes too easy to infringe on user freedom. This is why decentralization is important: it is a tool that can democratize systems by enabling trusted neutral, composable Internet infrastructure; promote competition and ecosystem diversity; and provide users with more choices and more ownership.

But in practice, decentralization has been difficult to achieve at scale, especially when compared to the efficiency and stability of centralized systems. Meanwhile, most Web3 governance models involve DAOs that use simplified but cumbersome governance models based on direct democracy or corporate governance that are ill-suited to the sociopolitical realities of decentralized governance.

However, thanks to the active labs of Web3 over the past few years, best practices for decentralization have begun to emerge. These practices range from adapting decentralized models to applications with richer functionality to DAOs adopting Machiavellian principles to design more effective decentralized governance that holds leadership accountable. As these models evolve, we should soon see unprecedented levels of decentralized coordination, operational functionality, and innovation.

—Miles Jennings, General Counsel and Head of Decentralization (@milesjennings on Farcaster | on Twitter)

Reimagining the UX of the Future

While UX in crypto has been criticized since 2016, the fundamentals haven’t actually changed all that much. It’s still too complicated: keeping your own keys; connecting your wallet to decentralized applications (dApps); sending signed transactions to an increasing number of network endpoints, etc. This is something we can’t expect users to learn in the first few minutes of using a crypto app.

But now, developers are actively testing and deploying new tools that could reset the user experience on the crypto front end in the year ahead. One such tool includes pass-through passwords that simplify logging into apps and websites; unlike passwords that require manual work from the user, pass-through passwords are automatically generated cryptographic passwords. Other innovations include Smart Accounts, which make accounts themselves programmable and therefore easier to manage; embedded wallets, which are built into apps so that onboarding can be frictionless; multi-party computation, which makes it easier for third parties to support signing without custody of user keys; advanced RPC (remote procedure call) endpoints that can identify user needs and fill in the gaps, and more. All of this will not only help Web3 become more widely adopted, but also make the user experience better and more secure than it was in Web2.

—Eddy Lazzarin, CTO (@eddy on Farcaster | @eddylazzarin on Twitter)

The Rise of the Modular Tech Stack

In the online world, one force always dominates the others: the network effect. Network effects are often so powerful that there are really only two kinds of modularity: modularity that expands and strengthens network effects; and modularity that undermines and weakens them. In all but the most rare cases, only the former makes sense, especially when open source is involved.

A monolithic architecture has the advantage of allowing deep integration and optimization across what would otherwise be modular boundaries, thereby improving performance… at least at first. But the biggest advantage of an open source, modular technology stack is that it unlocks permissionless innovation; allows players to specialize in specific areas; and incentivizes more competition. We need more of that in this world.

—Ali Yahya, Partner (@alive.eth on Farcaster | @alive_eth on Twitter)

AI Meets Blockchain

Decentralized blockchains are a counterweight to centralized AI. Right now, AI models (such as ChatGPT) can currently only be trained and operated by a handful of tech giants, as the required compute and training data are prohibitive for smaller players. But with crypto, it’s possible to create multilateral, global, permissionless markets where anyone can contribute computation or a new dataset to someone on the network who needs it, and get compensated. Harnessing the long tail of these resources will allow these markets to drive down the cost of AI, making it more accessible.

But as AI changes how we produce information, transforming society, culture, politics, and economics, it’s also creating a rich world of AI-generated content, including deepfakes. Crypto has a role to play here, too, to open up black boxes; to track the origins of things we see online; and more. We also need to find ways to distribute generative AI and govern it in a democratic way so that no single actor ultimately decides for everyone else; Web3 is the laboratory for solving this problem. Decentralized, open-source crypto networks will democratize (rather than centralize) AI innovation, ultimately making it safer for consumers.

—Andy Hall, Professor at Stanford University (@ahall_research); Daren Matsuoka, Data Scientist (@darenmatsuoka on Farcaster | on Twitter); Ali Yahya, Partner (@alive.eth on Farcaster | @alive_eth on Twitter)

Play for Earn to Play for Earn

Play for Earn games allow players to earn money in the real world (not just virtual) based on the time and effort they put into the game, often in real life. This trend ties into broader changes that are transforming gaming and its surrounding areas, from the rise of the creator economy to the changing relationship between people and platforms. Web3 enables us to break the current practice where all revenue from playing games and making transactions goes only to gaming companies. Users spend a lot of time and create a lot of value for these platforms, so they should be compensated as well.

But games weren’t necessarily designed to be workplaces (at least for most players). What we really need are games that are both fun and allow players to capture more of the value they create. As a result, play-to-earn is increasingly evolving into play-to-earn, making an important distinction between games and the workplace. As play-to-earn games move beyond their initial growth phase, the dynamics that lead to how game economies are managed will continue to change. Ultimately, however, this will not be a separate trend, but simply part of gaming.

—Arianna Simpson, @AriannaSimpson

When AI Becomes Game Makers, Crypto Provides Assurance

As someone who spends a lot of time thinking about Web3 games and the future of gaming, it’s clear to me that AI agents in games must provide assurances that they are based on specific models and that those models have not been tampered with during execution. Otherwise, the game loses integrity.

When lore, terrain, narrative, and logic are all procedurally generated—in other words, when AI becomes the game maker—we will want to know that the game maker is trustworthy and neutral. We will want to know that this world is built on guarantees. The most important things crypto provides are those guarantees — including the ability to understand, diagnose, and punish AI when it goes wrong. In this sense, AI alignment is really an incentive design problem, just like dealing with any human agent is an incentive design problem… and that’s what cryptocurrencies are about.

—Carra Wu, Partner (@carra on Farcaster, @carrawu on Twitter)

Formal Verification Gets Less Formal

While formal methods are popular for verifying hardware systems, they are less common in software development. For most developers not working on hard or safety-critical systems, these methods are too complex and can add significant costs and delays. However, smart contract developers have different needs: the systems they develop process billions of dollars; vulnerabilities can have devastating consequences and are often not immediately fixable. As a result, there is a need for more approachable formal verification methods in software development, and smart contract development in particular.

Over the past year, we’ve seen a wave of new tools (including our own) emerge that provide a much better development experience than traditional formal systems. These tools take advantage of the fact that smart contracts are architecturally simpler than regular software—having atomic and deterministic execution; no concurrency or exceptions; and a small memory footprint and few loops. The performance of these tools is also improving rapidly, by leveraging recent breakthroughs in the performance of SMT solvers (SMT solvers use complex algorithms to identify or confirm the presence of bugs in software and hardware logic). As developers and security experts gain widespread adoption of tools inspired by formal methods, we can expect the next wave of smart contract protocols to be more robust and less vulnerable to expensive hacks.

—Daniel Reynaud, Partner, Research Engineering, Karma (@karma on Farcaster, @0xkarmacoma on Twitter)

NFTs Become Ubiquitous Brand Assets

A growing number of well-known brands have begun to make digital assets available to mainstream consumers in the form of NFTs. For example, Starbucks introduced a gamified loyalty program where participants collect digital assets as they explore the company’s coffee products (not to mention an AR pumpkin spice maze!). Meanwhile, Nike and Reddit have developed digital collectible NFTs explicitly marketed to a broad audience. But brands can do much more than that: They can use NFTs to represent and reinforce their customers’ identities and community relationships; connect physical goods and their digital representations; and even co-create new products and experiences with their most devoted fans.

Last year, we saw a trend toward large-scale collectibles of low-cost NFTs as consumer items—these NFTs are often managed through custodial wallets and/or “Layer 2” blockchains, with correspondingly low transaction costs. As we head into 2024, the conditions are in place for NFTs to become ubiquitous digital brand assets, as Steve Kaczynski and I explain in a forthcoming book, for companies and communities of all kinds.

—Scott Duke Kominers, Research Partner (@skominers on Farcaster | on Twitter)

SNARKs Go Mainstream

Historically, technologists have had several strategies for verifying computational workloads:

1) re-performing the computation on a trusted machine;

2) performing the computation on a machine dedicated to the task (a TEE); or

3) performing the computation on a trusted neutral infrastructure, such as a blockchain. Each strategy has limitations in terms of cost or network scalability, but now, SNARKs (Succinct Non-interactive ARguments of Knowledge) are becoming more accessible. SNARKs allow a "cryptographic receipt" for some computational workload to be computed by an untrusted "prover" in an unforgeable manner: in the past, computing such a receipt cost 10^9 more than the original computation; recent advances are bringing that number down to around 10^6.

Thus, SNARKs become feasible in situations where the initial computation provider can afford the 10^6 overhead, and the client cannot re-execute or store the initial data. The resulting use cases are numerous: Edge devices in the Internet of Things can verify upgrades. Media editing software can embed content authenticity and transformation data; and meme mashups can pay homage to the original source. LLM reasoning can include authenticity information. We can have self-validating tax forms, bank audits that cannot be forged, and many more uses that benefit consumers.

—Sam Ragsdale, Investment Engineer (@samrags on Farcaster, @samrags_ on Twitter)

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