Hashed’s outlook for 2024: Bitcoin ecological infrastructure explodes, and the integration of AI and blockchain continues to advance
Written by: Hashed
Compiled by: Xiaobai Navigation coderworld
Summary
2023 is a year of resilience. Hashed has been working closely with developers to promoteBlockchainThis year, Hashed has invested in 26 early-stage industry teams around the world.
As a team, Hashed has built relationships with global industry leaders and reflected on specific areas of Web3 that they are excited about heading into 2024.
Hashed’s 2024 investment thesis focuses on the industries they believe will have the greatest impact. In this article, Hashed will look ahead toBlockchainnine areas.
They believe that blockchain will play a key role in reshaping the creator economy and intellectual property. They will also focus on expanding to Ordinals and BRC-20 Token，这标志着比特币网络扩展的潜力。此外，Hashed会探索区块链游戏中经济活动和资本市场的交汇点，随后深入了解下一代金融，包括实物资产（RWA）和证券代币发行（STO）。而且他们预计该行业将通过许可的 DeFi 走向成熟，这是监管机构采用的重要桥梁。
Hashed said the synergy between AI and blockchain is expected to bring new progress. When seeing some ecosystems adopt application-specific Rollups to enhance scalability, they believeL2The development of cryptocurrencies is also an exciting section. The article concludes with a look at the crypto-euro being offered to global financial markets and the untapped potential of cryptocurrencies as a tradable asset.
Blockchain will reshape creator economy and intellectual property
As with traditional media giants, the friction of rich creative processes still exists, including but not limited to creating IP derivatives such as web comics, games and movies, and with or withoutAIGenerated Content (AIThese issues persist as traditional media and entertainment giants take a defensive stance toward open IP infrastructure.
An open, on-chain and traceable/verifiable IP infrastructure and studio will serve as a foundation that enables content creators and any stakeholders in the content creation and consumption process to immerse themselves in and take ownership of the IP and content, something that was possible before the broadcast era, which expanded and then diminished direct connections and relationships between content creators and consumers.
As a technology, blockchain will create a paradigm shift in the media and entertainment industry to enable more transparent and fairer IP and royalty/revenue sharing management for any stakeholder in the content creation and consumption process, aiming to create a multiplier effect on the creativity of producers and consumers in different fields, from cartoonists, celebrities, athletes, film directors to animation, film studios and talent agencies, allowing them to grow into more influential IP (the next Pokémon or Hello Kitty).
To accelerate the above paradigm shift, an IP attribution/proof infrastructure or IP open standards need to be established to flexibly implement licensing and royalty schemes that encompass the complexity of AIGC. Going one step further on IP attribution and proof, fan-driven IP crowdfunding platforms similar to blacklists, fan-generated IP-like ETFs (such as webtoon ETFs), bets on the next development of anime series, etc. can all be examples of creating capital markets based on on-chain interconnected IP. Of course, individuals or companies with high brand identity IP can drive this initiative faster.
Examples: Creative Commons, Token-bound NFT Licenses, Pudgy Penguins, Yuga Labs
Ordinals and BRC-20: Revisiting the Bitcoin Ecosystem
While most crypto players are discussing the upcoming Bitcoin spot ETF, there is a wave of innovation happening on the Bitcoin network that is largely being overlooked by institutions and regular investors. We believe that Ordinals and BRC-20 technology are a paradigm shift for the Bitcoin ecosystem, demonstrating what many consider to be the most dominant, widely accepted, andSafetyThe long-term sustainable potential of blockchain.
Ordinals allow various types of data to be engraved on the smallest unit of Bitcoin, sats, turning them into NFTs on the Bitcoin network. This was soon followed by the introduction of the BRC-20 standard, a set of instructions that, when used with Ordinals, allow people to deploy, mint, and transfer these inscriptions as fungible digital tokens on the Bitcoin network. This became very popular in the second half of 2023, increasing Bitcoin's block size and doubling the average number of transactions per block. As a result, Bitcoin's average transaction fee soared about 20 times from the average transaction fee in early October to $37 per transaction.
The existing infrastructure is still nascent and lacks accessibility, developer tools, and complex tracking systems. Existing token protocols lack support for third-party extensions, smart contracts, and othercontractCompatibility support is still lacking, and BRC-20 modules always require detailed onboarding tutorials. 2024 will be a key year for the industry to overcome these obstacles and widely adopt Ordinals and BRC-20 standards.
We are excited about projects that expand the Bitcoin ecosystem. We foresee this space unfolding like Ethereum DeFi did in 2020. The ecosystem infrastructure includes lending markets, decentralizedexchange, bridges, aggregators, portfolio management, development tools, and tracking infrastructure.cryptocurrencyThe most powerful, oldest and most dedicatedCommunityOne of them is the combination of on-chain participants who have become smarter and more active over the past few years. Those who help build the tools to enable BitcoinSafetyFlexible programming, development of independent indexing infrastructure orwallet, aggregation systems, or even startups or protocols that create a native Bitcoin metaverse or NFT marketplace could have a huge impact in 2024.
Examples: Bounce Auction, Darewise, Multibit, Ordinals, Ordiswap, Tap Protocol, Trac, UniSat, Xverse.
Economic activities in blockchain games and the booming capital market
游戏一直是最吸引人的领域之一，在全球超过30亿用户在所有媒体中进行经济活动。由于区块链游戏努力达到传统游戏和像Nexon、CCP这样的传统AAA游戏工作室的标准，因此吸引了大量用户。此外，用户体验已经从智能contract钱包到MPC等方面进行了有意义的改进，允许可编程账户和Safety性，从而为用户、游戏玩家和工作室提供更无缝的体验。
As the blockchain industry moves towards growth and maturity stages of mainstream adoption through infrastructure and user onboarding channels for blockchain gaming, we foresee economic activity occurring in real time in the form of fungible and non-fungible tokens, digital identities and social graphs, UGC, and adaptations in both the physical and virtual worlds.
更具体地说，由于 DotA 源自于魔兽争霸 3 之上构建的模组，最终启发了拥有超过 1.5 亿活跃玩家的英雄联盟的创建，FOCG（完全链上游戏）/ AW（自主世界）将通过其前端和后端的可组合性、社区治理和安全性，创造出前所未有的日益增长的虚拟经济。我们将在下面详细解释：
Front-end composability: Modify the game client to have a new UI, game art, sounds or music, or reimagine the gaming experience from scratch by creating an entirely new client. Rewarding such contributions (i.e., fees awarded to client developers) can be transparently and automatically executed via smart contracts, enabling an automatic and transparent revenue sharing model.
Backend composability: Every object in a game or world, including players, can be individually addressed on-chain by any smart contract, which means that players can truly fulfill the original promise of smart contracts as a way to form automatically executable agreements between them with full Turing-complete logic, which some call user-generated logic. The ability to form complex and powerful agreements will enable virtual societies to reach unprecedented political and economic complexity.
Community Governance: When an entire game or world is on-chain, value can be captured automatically and transparently without relying on enforcing third-party market royalties. The community has a say in deciding how value is captured, either by opting out (i.e. switching to or initiating a fork) or by voting in a predefined on-chain governance system. The ability to capture value and accumulate it into a community-controlled on-chain treasury can serve as a powerful economic flywheel for the virtual economy. Capturing value from economic activity within a world can provide a stable reserve backing for assets and fund community development and contributions, further facilitating greater economic activity.
Security: Since FOCG uses a lot of computing resources to verify each transaction, the games and worlds on the chain will be safe. This will enhance confidence in the flow of the virtual economy.
Reference examples: Nexon MapleStory Universe, CCP Project Awakening, The Citadel, Dark Forest, MUD/Lattice, Halliday, ERC-6551, dfns
Next Generation Finance: RWA and Equity Tokens
The financial landscape is undergoing a transformation that promises to bridge the gap between traditional finance and the world of blockchain technology. This shift is centered around real-world assets (RWAs) and equity tokens (whose products are called STOs), including assets that traditionally exist off-chain, which are now being tokenized and integrated into the blockchain ecosystem. It covers a wide range of real-world assets, including real estate, stocks, bonds, and other valuable assets, all of which are compatible through blockchain technology.
What makes this era truly special is the active participation of major traditional financial players like JPMorgan Chase, Goldman Sachs, KKR, Hamilton Lane, etc. These financial institutions are paving the way for the introduction of physical assets to the blockchain, heralding a huge change in the industry.DAO, Securitize, Chainlink, Maple Finance, Goldfinch, Ondo Finance, and Backed Finance are at the forefront, leading the digital transformation as crypto-native currencies, and adapting seamlessly to RWAs and STOs.
In this context, two broad categories emerge: infrastructure-centric and asset-centric. Infrastructure-centric projects are laying the foundation for this new financial ecosystem, creating protocols, security measures, and platforms that support the future of RWAs and STOs. On the other hand, asset-centric projects aim to have deep vertical positioning for specialized assets.
We are committed to exploring both categories in a balanced manner. While we recognize that asset-centric efforts have great potential, our relative focus tends to be on infrastructure development. We believe that building a strong and secure infrastructure for tokenization and trading is the cornerstone of this financial revolution.
In the early stages of the RWA and STO revolution, we see great growth potential in projects that seamlessly integrate with existing Web2 services and establish partnerships with major Web2 entities while adeptly navigating the intricacies of the global regulatory landscape. Currently, the market is primarily focused on products tied to U.S. Treasuries and tokenization of fundamental assets. However, we recognize that there is considerable opportunity in projects exploring areas such as derivatives tokenization and securitization, with a more inclusive strategy to embrace a wider range of asset classes and financial products. Our assessment will also include regulatory elements such as compliance, risk management, and due diligence, as well as operational elements such as efficient on- and off-ramps, market accessibility, and scalability. These aspects are critical to bridging the gap between decentralized finance and traditional finance, laying the foundation for a more integrated and resilient financial ecosystem.
Reference examples: MakerDAO, Securitize, Chainlink, Maple Finance, Goldfinch, Ondo Finance, Backed Finance
Permissioned DeFi promotes regulated institutional adoption
2020-2021 年期间，中心化金融协议兴起，使大众能够接触到cryptocurrency作为可投资的资产类别。然而，2022 年发生了一系列事件，几个中心化参与者的一些不良行为迅速玷污了整个行业，导致了广泛的抛售和杠杆清算，这使得 2023 年见证了强大的 DeFi 创新的出现，例如共享池永续 DEX 和点对点货币市场。
We expect to see transformative developments in the DeFi space on the institutional side in 2024. Unlike fully decentralized offerings (e.g., GMX, Lido, Morpho, etc.), we see permissioned DeFi projects introducing controlled access models in their protocol designs, prioritizing issues related to regulatory compliance, privacy, and security.
The main driver behind the rise of permissioned DeFi protocols is the growing emphasis on regulatory compliance. As governments seek to bring cryptocurrencies and blockchain operations into regulatory frameworks, permissioned DeFi platforms that prioritize compliance and structured institutional onboarding are expected to benefit. One way to do this is to implement KYC or KYB verification procedures, supplemented by zero-knowledge technology to protect customer privacy. With these access controls, protocols can reduce the risk of unauthorized transactions and potential vulnerabilities, thereby increasing the likelihood of welcoming institutional capital.
Institutional capital drives the development of traditional financial markets, and we expect that these capital flows will be more suitable for interacting on-chain if the right infrastructure and protocols are in place.
In the lending space, institutions are unlikely to consider leveraging if they have to sacrifice capital efficiency on overcollateralized assets. But for collateralized lending to develop, proper credit rating infrastructure is needed to capture on-chain footprints, risk management, and accurate asset price predictions. Institutions also emphasize downside protection and hedging capabilities, so insurance markets that price on-chain risks are key. Institutions with existing crypto assets may look for ways to gain yield. If so, we expect enterprise-grade platforms with permissioned capabilities (such as proven validator sets or security-focused infrastructure providers) to be particularly attractive.
The permissioned DeFi model will be the first step for regulators to adopt. In the long run, this allows the industry to benefit from scale in a controlled and structured way.
Reference cases: Alluvial Finance, Blueprint Finance, Centrifuge, Fortunafi, Fractal Protocol, Maple Finance.
The integration of AI and blockchain
Outside of the crypto industry, AI is taking over in 2023. This presents a challenge to technologists and pioneers: how to maintain a neutral and composable network infrastructure as we democratize progress.
Blockchain offers a promising avenue for alleviating control and governance-related challenges in powerful technological and economic systems. By decentralizing governance, enhancing transparency, and improving data privacy, blockchain can contribute to creating a more fair, responsible, and inclusive AI ecosystem.
The convergence of AI and blockchain technologies represents a synergy that has great potential to reshape a variety of industries. AI, with its ability to analyze huge data sets and make intelligent predictions, can improve efficiency and decision-making processes within blockchain networks. Blockchain, on the other hand, provides a decentralized and secure platform for storing and managing data, which can address some of the challenges associated with AI, such as data privacy and security issues. Together, these two technologies create a powerful framework that can revolutionize industries ranging from finance to healthcare.
Substantial progress in blockchain services through AI is reflected in the enhancement of smart contracts. Smart contracts are self-executing contracts where the terms of the contract are written directly into the code. AI can be integrated to analyze the conditions and results of smart contracts, making them more adaptable to changing environments. This dynamic combination not only ensures the accuracy of contract execution, but also allows for the automation of complex decision-making processes within the blockchain ecosystem.
Deep learning models such as Midjourney and Stable Diffusion may become protocols similar to the media version of ChatGPT, where original content and IP holders can pledge their assets (NFTs, game items, photos, papers, iconic designs, etc.) to prove ownership and originality, and a portion of the revenue generated by the product can be distributed as loyalty compensation. This will alleviate the IP ownership issues of content generated by AI engines and open up new markets for content creators.
By 2024, more builders will leverage these technologies to power decentralized, open-source networks with good governance, revolutionizing the way we produce and consume digital experiences. The seamless integration of blockchain and AI is more than the sum of their individual strengths, but a multiplicative synergy with standout features in each product. Incentivized AI-enabled products and sustainable protocol designs will outperform existing web2 applications.
Reference cases: Worldcoin, Lovo AI, Zettablock, Gensyn, Modulus labs, Ritual.net
Leading the way in L2 by embracing application-specific Rollups (L3)
2023 is a time of expanded L2 usability. With Arbitrum experiencing explosive growth and numerous companies creating their own Rollup solutions using the OP stack, numerous L2 solutions are beginning to emerge. The viral launch of services such as GMX and Friend.Tech heralds the potential for wider L2 adoption.
Application-specific Rollups (L3), which leverage their own high-performance CPUs for computation, will have a greater impact in 2024 to build on this momentum. In his 2020 Rollup-centric roadmap, Vitalik Buterin emphasized that Ethereum needs to solve scalability issues in both data and computation scalability. Data scalability is expected to be gradually addressed through the implementation of EIP-4844 and sharding. However, computation scalability is primarily addressed by Rollups. Layer 3 proposes a practical solution for computation scalability by continuing to provide settlement and composability within Rollups, relying on the general layer for dispute resolution, and maintaining the same level of security as the base layer.
However, this is a trade-off. While it effectively runs applications at a lower cost and with high performance, it sacrifices composability with applications on other Rollups. Nonetheless, applications that benefit more from having their own ecosystem (e.g. dYdX, Ronin, etc.), providing services in a more controlled environment, are better suited for application-specific Rollups. With the launch of several well-funded gaming and social applications targeting mass adoption that we expect to see in 2024, L3 will play a larger role in games that provide high-quality services to a large number of users simultaneously, social services that host large amounts of text, images, and videos, and order-based exchanges that handle large amounts of traffic from traders.
Which part of the infrastructure layer will benefit the most? Probably the order layer projects that manage validator calculations and ordering, and the layers that enhance composability between different application-specific Rollups. In addition, products designed to minimize the miner extractable value (MEV) in application-specific convolutions, privacy solutions to curb centralized validation nodes, and solutions for quickly building high-performance validation nodes for application-specific Rollups are expected to see significant progress.
Examples: Radius, Cartesi, Espresso, Astria, Automata, AltLayer
Providing encrypted euros and dollars to global financial markets
The stablecoin ecosystem has grown into a large market worth approximately $130 billion by the end of 2023, with Tether’s USDT issuance of approximately $90 billion. A big reason for USDT’s success is that it is the first stablecoin to target financial markets in the blockchain space, but we believe that in 2024 in particular, stablecoins will undergo a major shift as they move toward customized solutions designed for specific user groups and purposes. This shift will include considerations such as onshore vs. offshore objectives, compliance levels, and base currency selection. While it remains unlikely to see stablecoin laws at the federal level in the U.S. next year, we think we will continue to see attempts to disrupt existing dominant products.
Currently, the stablecoin market is dominated by USD-based options such as USDT, USDC, and DAI.Xiaobai NavigationThe monetary denominations of the financial markets formed in cryptocurrencies, meanwhile, people in countries that need strong monetary support are turning to the most proven of all reserve currencies, the US dollar, instead of using secondary or tertiary reserve currencies. At the same time, Tether is now one of the largest buyers of US Treasuries, and even compared to all countries holding US Treasuries, it ranks in the top 15 in terms of holdings, which shows how great the demand is to use the US dollar as a medium of exchange online or outside the United States that is not fully regulated and authorized by the United States.
In 2024, we will continue to see different ways to realize the disruptive potential of USD-denominated stablecoins (aka crypto-Eurodollars), and continued entrants into a market dominated by USDT and USDC. In the process, we will see the emergence of stablecoin issuers that provide specialized services for financial markets, B2B payments, C2C remittances, etc., which have so far been handled by single stablecoins. At the same time, user experience innovation will appear in the end-user facing space, leading to more stablecoin-based services, including new banks, bank cards, and API tools that compete or collaborate with existing fintech applications.
While the use of stablecoins is diverging, the future application of crypto-EUR/USD will be characterized by the disruption of the major players that dominate these traditional financial markets. Builders working on stablecoin Lego in the current fintech landscape will have great potential to eventually create a stablecoin-based financial market that includes primary and secondary markets, derivatives and foreign exchange markets.
Examples: Circle, First Digital, StraitsX, Mountain Protocol, REAP, BasedApp, Bleap
The impact of blockchain on the digital advertising market
Blockchain technology is expected to revolutionize the advertising industry and solve the privacy and efficiency issues that have long plagued the traditional online advertising model. As the backbone of Internet business, advertising has been criticized for monopolizing user data. However, the emergence of Web3, which emphasizes autonomy and privacy, presents a new paradigm.
In Web3 applications, relying on server-side data storage or client-side cookies to obtain user information becomes redundant. The transparency of the blockchain, where all transaction data is stored and accessible, provides a powerful database for analyzing and identifying potential customers, greatly improving advertising efficiency. For advertisers, this means a more straightforward targeting process, as wallet information shared across various media platforms can be used to serve relevant ads to users, even when they browse across different platforms. This approach is particularly advantageous given the limitations that privacy laws previously placed on advertising effectiveness.
This shift to a Web3-based advertising model is expected to break the monopoly of large companies in the advertising market and pave the way for a more competitive and diverse media landscape. By minimizing intermediary fees, both media agencies and advertisers will gain significant benefits. In addition, the possibility of a futures market for advertising time slots and keywords, taking advantage of their value that fluctuates over time, can introduce new dynamics to the capital market and provide an opportunity to hedge against market fluctuations.
Additionally, user privacy remains a paramount concern. Advanced cryptographic techniques are being developed that can provide users with the option to hide their transaction data, thereby maintaining their privacy when using these services. This balance between efficient advertising and privacy protection is the cornerstone of the future of blockchain-driven advertising, bringing a vibrant and fairer market to all stakeholders in the industry.
Reference examples: Brave Browser, Hypelab, Persona, Slise
The article comes from the Internet:Hashed’s outlook for 2024: Bitcoin ecological infrastructure explodes, and the integration of AI and blockchain continues to advance
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