Outlook for the Web3 Industry in 2024

In 2023, the Web3 industry has made significant progress in various fields. Looking ahead to 2024, the following directions are worth paying attention to:

ZK Technology

ZK technology is expanding beyond scenarios such as scaling and cross-chain, and is being applied to more areas. This mainly includes:

• zkEVM: Different types have made progress, which needs to be analyzed specifically based on the project roadmap.
• zkVM: zkWASM is becoming mainstream, RISC V and zkLLVM are also being explored.
• ZK Mining: GPU, FPGA, and ASIC each have their advantages, the number of Prover DAOs is increasing.
• ZK Middleware: zkBridge, zkPoS, ZK Coprocessor and other directions of development

MEV

Development trends in the MEV field:

• Focus on the early stage of the trading supply chain
• Next generation DEX design improves LP
• Private auction/trading pool combining technologies such as FHE and MPC
• Evolving towards unlicensed systems
• OFA( Order Flow Auction ) Rise
• Blockbuilder market concentration is high
• Relays face issues of centralization and incentives.

Account Abstraction (AA)

AA is divided into two main categories: smart contract wallets and modular services.

• The wallet track pattern is stable, and the wallet factory is worth paying attention to.
• Bundler and Paymaster become standard services
• L2 native support for AA develops faster
• DApp support for AA is still an issue.
• Private mempool combined with MEV and intent

Intents

The development of Intents is rapid, main trends:

• Combined with MEV and AA architecture
• The Telegram Bot evolves towards Intent direction
• Need to solve issues such as solver misconduct and order flow trust.

Data Availability(DA)

Characteristics of the DA track:

• There are not many participants, and the head effect is obvious.
• Ethereum remains the top choice for large Rollups.
• Other DA projects mainly serve the Cosmos ecosystem, RaaS, etc.
• EigenDA has a special positioning, or attracts intermediary clients.
• Some DA projects targeting specific scenarios can capture niche markets.

Rollup Framework and RaaS

• The Rollup market is becoming saturated, and the number of RaaS projects is increasing.
• OP Stacks and other frameworks have gained widespread adoption
• Specific applications may use customized execution environments
• New technologies such as FHE rollup are worth paying attention to.

Cosmos

Cosmos Ecosystem Development:

• Cosmos Hub strengthens its ecological position
• The number of application chains has decreased due to the influence of L2.
• Highly customizable framework still has advantages

Security

The field of security covers multiple aspects:

• On-chain detection and interception
• On-chain tracking tool
• Manual Audit and Bounty
• Development Environment Tools
• Various technical methodologies applied

AI

The main directions of the combination of AI and cryptocurrency:

• Underlying computing power infrastructure
• Training on specific data sources
• Chat Tool
• Data Labeling Platform

Institutional investors are more focused on projects such as ZKML and those with advantages in vertical domain data.

DeFi

Trends in the DeFi field:

• Demand for actual yield products is increasing
• DEX opportunities increase, especially L2
• The potential of projects aimed at non-crypto native users is significant.
• The perpetual DEX and liquidity staking segments have performed remarkably well.

Games and Entertainment

Game Studio Classification:

• Casual games: low cost, fast iteration
• Large-scale games: long development cycle, high cost
• Moderate games: card games, tower defense, etc.
• IP Construction: Cross-Media Content
• AI Featured Games: Innovative but needs real-world validation

UGC, game UA and other areas are also worth paying attention to.

User/Fan Interaction

Mainly involves industries such as entertainment, sports, and film.

• Two models: Direct IP operation vs Authorized cooperation
• Platforms with an existing community foundation are more likely to succeed.
• Projects with high IP value and a high overlap of user groups have greater potential.

Institutional Services

Institutional services are divided into sub-sectors such as trading/brokerage, asset management, banking/payment, etc.

• Expected to maintain steady growth
• Compliance construction has become a focus.
• The responsibilities of service providers are more clearly defined.
• PB service market share is expected to improve
• ETF applications bring about a reshaping of the market landscape
• Europe has become a hotspot region

Bitcoin Ecosystem

Bitcoin ecosystem development direction:

• Sidechain technology route faces challenges
• The Layer2 project framework is gradually improving.
• Client verification technology is worth paying attention to.
• New Applications Expansion of the Lightning Network
• New asset types such as BRC20 carry risks.
• The application of DLC technology may become widespread

DePIN

DePIN is a sector where volume can easily increase during a bull market, and key factors include:

• Decentralized mechanism design
• Seize market opportunities
• Choose the appropriate type of hardware and user group

It can be divided into different types such as ToC high-frequency use, improvement types, and unique mining machines, each with its own opportunities and challenges.