10 predictions for 2024

Original Title: "10 Predictions for 2024"

Original Source: IOBC Capital

Looking back at 2023, the total market value of crypto has returned to $1.7 trillion, with a year-on-year growth of over 110%. Cryptocurrencies have successfully weathered the winter cycle.

During this year, the cryptocurrency industry had the following events that left a deep impression:

1. Binance has reached a settlement with US regulators, and compliance for crypto companies is becoming a mainstream trend.

2. The Bitcoin ecosystem leads the inscription of the Fair Launch new paradigm, mainly due to the feasibility brought by the Taproot upgrade.

3. Ethereum's LSD/LSDFi defines the "risk-free return" in the cryptocurrency industry, and ETH Staking returns are similar to "Crypto Treasury Bond returns".

4. Layer2 is gradually taking over Ethereum's DApps ecosystem. Currently, the TVL (total value locked) of Layer2 has reached 20 billion, approaching Ethereum's 29 billion.

5、Solana has once again become a hot topic, and the Solana ecosystem has attracted market attention with DePIN and MEME projects.

6. RWA revenue has become the cornerstone of profit for DeFi lending protocols. MakerDAO, the most profitable DeFi protocol, derives 58.1% of its revenues from RWA, mainly TBills.

2024 is the year of the Dragon in the sexagenary cycle, with the beginning of spring on February 4th. From this day on, the 20-year period of the Nine Purple Li Fire cycle officially begins, which is a long-term benefit for Crypto.

IOBC Capital believes that there may be the following 10 development trends in 2024:

1. Approval of Bitcoin spot ETF may bring in over 30 billion dollars of incremental funds.

The listing of Bitcoin spot ETF will not only bring potential investors from mainstream stock markets such as Nasdaq, NYSE, and CBOE, but also facilitate more institutions to enter. Combining with the management scale of existing Bitcoin-related products in the market, it is conservatively estimated that Bitcoin spot ETF will bring more than 30B+ incremental funds.

2、The total market value of the Bitcoin ecosystem's inscription may reach 20B+, and only the truly Fair Launch top MEME has medium to long-term consensus.

Fair Launch is the core engine of every early stage of the Crypto bull market in the past. The inscription of the Bitcoin ecosystem classifies asset issuance protocols such as Ordinals, Atomicals, Runes, PIPE, Taproot Assets, etc. I will not go into the differences and advantages of these protocols here. From the perspective of MEME coins, only the top MEME with a truly Fair Launch has a medium to long-term consensus in the early stages of these inscriptions.

3、Bitcoin Layer2 will see rapid development, benefiting Bitcoin's application-oriented infrastructure.

Since the widespread attention of ordinals NFT and BRC20 in the market, there have been quite a few Bitcoin Layer2 financing projects in the second half of 2023 - some using client-side verification, which may be more Bitcoin Native; some using Rollup, based on the many years of development of Ethereum Rollup, which may develop more rapidly.

The development of Bitcoin ecosystem and its layer2 is beneficial to the infrastructure of Bitcoin ecosystem. For example, the wallet Xverse in Bitcoin ecosystem; Bitcoin Layer2 Lightec and its zkBridge and WrapBTC, etc.

4、Ethereum Layer2 TVL will surpass Ethereum Layer1 and may reach 100B+.

The TVL of Ethereum Layer1 is mainly contributed by the LST protocol. As of now, more than 28.6 million ETH have been staked. With liquidity staking protocols like Lido (stETH) and Alluvial (LsETH), the liquidity of staked ETH has been released, leading to more use cases based on LST, such as perpetual contracts and ReStaking using LST as collateral. This effectively increases the capital utilization of ETH.

With the successive launch of various Layer2 projects, various dApps have moved their main battlefield from Ethereum Layer1 to Layer2 with lower gas fees and faster speed. By 2024, the TVL of Layer2 may be higher than that of Layer1.

5、ZK Rollup's TVL volume still cannot match that of Optimistic Rollup, but the zk modular combination of Ethereum Layer2 Components will tend to be complete.

ZK Rollups and their associated components have become increasingly sophisticated. In the past year or two, various zk projects have emerged that focus on specific vertical segments, such as ZK co-processor, proof marketplaces/ZKProver (Risczero), zkDevOps, Hardware Accelerators (Ingonyama), and zkOracle (Hyper Oracle).

ZK Components is a trend in modular composition that helps reduce the barrier to entry for developers building zkDApps and provides greater flexibility.

6、Layerzero will issue coins in the first half of the year, expected to ignite the Omnichain track.

Layerzero already supports 54 chains, with over 96 million cross-chain messages and over 35,000 full-chain applications in the ecosystem.

According to the official Twitter account of Layerzero, the coin will be launched in the first half of 2024, with the potential to ignite the market trend of the Omnichain race.

7、Parallel EVM introduces a new narrative, driving secondary growth of chains such as Sei v2

Parallel EVM is a method of making blockchain networks faster and more efficient by running multiple (independent) transactions simultaneously.

There are several projects currently attempting to use Parallel EVM. Taking Sei Network as an example, Sei v2 proposes a significant upgrade to parallel EVM. Sei v2 will create a new component to support EVM smart contracts, which can also interact with existing Cosmwasm smart contracts. The Sei v2 chain will optimistically run all transactions in parallel, and when conflicting transactions occur, the Sei blockchain will track the storage portions touched by each transaction. Transactions involving different parts of storage will be rerun in parallel, while transactions involving the same state will be rerun in order.

Other projects such as Neon EVM and Nomad are also adopting Parallel EVM to improve performance, in addition to Sei v2. At the same time, EVM remains the most popular DApp environment, and these chains that support Parallel EVM can benefit from many infrastructure tools in the EVM ecosystem.

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