If you care about web3/crypto, you’re going to want to read this blog! Outside of maybe one, I believe these are unique predictions against the other reports shared this year.
Let’s dive right in:
1. Crypto & Enterprise Become Friends
Often times, it’s either crypto or its the establishment. However, I believe the narrative of a more symbiotic relationship emerges in 2024.
2023 saw the likes of companies like LINE (5.5M web3 users) & Flipkart (3.3M web3 users) launch on-chain applications and wallets, but that was only the start. Imagine what happens when more major, multi-nationals come on-chain.
Think about this simple formula for success: enterprise adoption = more users = more on-chain activity + opportunity to capture new users in crypto native applications = stronger crypto fundamentals (i.e., supply & demand)
Crypto needs enterprise, enterprise needs crypto. I believe 2024 will be the breakout year for this complicated relationship.
KPI: enterprise wallet adoption numbers, enterprise on-chain volumes
2. Enterprises Launch Own L2s
If you subscribe to the belief that traditional enterprises have: the users, the transaction volume, and are moving into web3 — then why not?
A simple thought exercise:
- Blockchain can facilitate multi-party transactions quite well. Enterprises can move relevant transactions on-chain where appropriate.
- Most users don’t know what blockchain is, nor do they care. So, they get the functionality blockchain brings, without worrying about blockchain.
- Where users care about blockchain and moving across networks, they can get opportunity and interoperability to do so.
- Enterprises retain control over network governance (to the degree they choose), retain lost gas fees they’d pay for their own users on the main network, and potentially increase revenue through chain operations.
In 2023, technologies like Polygon CDK and the rollup-as-a-service ecosystem emerged to create the easy deployment of such networks — innovators like Nubank & Flipkart led the charge.
In 2024, as the networks mature/launch and privacy becomes a focus — I believe we will see a larger number of enterprise follow suit.
KPI: YoY increase in L2 launches by enterprise on Polygon CDK
3. Speaking of L2s — Time to Decentralize!
Transaction volumes are moving to L2s. However, if we take Ethereum (L1) vs. Polygon zkEVM, Optimism, Base, etc. — L2s are not decentralized like the L1. Whether its the provers, the sequencers, etc.
In 2023, any conference you went to — there was talk of decentralizing the L2s either in the protocol itself or through new middleware platforms (e.g., Espresso, Astria, etc.).
There will be a move from product roadmap to implementation in 2024, as a core tenet of this space (decentralization) will need to be improved where the transaction volume goes. Along with this move, new business models will emerge for new sequencers/provers to enter the market.
KPI: YoY # of networks that decentralize sequencers & provers
4. Digital Identity Meets Crypto
When it comes to decentralized digital identity, there’s a fundamentally different architecture than the fungible & non-fungible token one we’ve come to know. These two worlds need to collide.
In off-chain decentralized digital identity, wallet providers support holding credentials, which I hold in my wallet, and there is a network of trusted issuers/verifiers. In the on-chain world, wallet providers support holding private keys, which I hold in my wallet, and reference to tokens stored on-chain, in which anyone in network can verify on-chain. When you have both in a singular architecture, it can be far more powerful for the user.
In 2023, innovative regulation came out of the EU on digital identity, which will propel this space forward globally. Additionally, crypto-native companies like Coinbase & Polygon experimented with digital identity. Slowly, but surely, the two sides will come together.
In 2024, I expect decentralized digital identity to have its breakout moment alongside crypto.
KPI: # of wallet providers that support both DID/VCs & tokens
5. Wallets Move to the Back
Over the past few years, we’ve seen the wallet discussion in the enterprise web3 space go from:
- Download e.g., MetaMask wallet and hold your keys, to:
- A wallet will be created for you in a new standalone app, to:
- Use your existing app with built-in wallet for web3 features (e.g., Grab, Telegram)
The next logical step is that the wallet fades into the back of your existing app, where we don’t even need to say there is a wallet. Imagine going to your favorite airline or hotel brand or bank’s mobile application, and there’s just digital assets (assets on a blockchain).
The next evolution becomes: “use your existing app”.
Rather than changing the user experience, it’s incorporating the technology without screaming about the technology. It’s providing users (mass amounts of users!!) functionality that blockchain enables, without them needing to know anything about blockchain. Mass adoption?
While I believe this will emerge in 2024, it’s honestly a 2–3 year prediction as more and more enterprises build in this space.
KPI: # of enterprises that launch web3 functions in native app
6. AI Enters Wallets
If you’re anywhere near Planet Earth, you know that 2023 was the year of artificial intelligence (AI).
Much has been said about the relationship between AI and blockchain and how they are complimentary: content creation, development, model validation, authenticity, etc.
However, I’m most interested to see how AI improves the wallet experience. For example:
- I own X tokens, or possess Y credentials — the AI recommends something for me.
- I want to create new token-based good to sell — the AI selects best chain and marketplace.
- I have certain buying patterns and the AI automates my decisions for me.
In our digital lives, we are building rich data sets — especially, as we move to this better future with digital ownership. In 2024, I’m excited to see how AI takes that growing data set and makes my life easier.
KPI: # of wallet providers that roll-out AI within wallet
7. Bitcoin Network Growth
Okay, this one might not be as unique as the other 6, but — I think bitcoin will be the most talked-about topic in crypto/web3 in 2024.
With the alleged, impending approval of the spot bitcoin ETFs in the USA, a potentially beneficial changing interest rate environment, and the bitcoin halving — there’s an incredible amount of interest in the network token.
I won’t belabor this point, as far more knowledgeable bitcoin people than me can give you the details (wallet address growth, miner fee growth, ordinals, layer 2s, new functionality, etc.), but the bitcoin ecosystem is growing.
Full disclaimer in the footnotes below, but I do own bitcoin and this is not financial, investment nor any other advice — do your own research!
KPI: price of bitcoin, bitcoin network volume
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At the end of the year, I’ll measure these predictions against the KPIs indicated and report back!
Would love to hear your thoughts in the interim!
When I set out to write this, I ended up with a list of 16 topics to evaluate for 2024, but I challenged myself to narrow it down to 7. If you’re interested in what else I’m monitoing, you can find the longer list below:
- Zero-Knowledge Proofs, Specifically ZK-EVM
- Privacy-Preserving Mechanisms on Public Chains
- Enterprises Entering the Web3 Infrastructure Space
- Modular Blockchain Movement
- Data Availability Platform Launches
- Web2 Gaming Studios Launching Web3 Functionality
- Enterprise M&A of Web3 Infrastructure Startups
- Stablecoins & the Rise of Programmable Money for Cross Border Activity
- Regulatory Pressure on the DeFi Space
There’s so much happening in web3/crypto, it’s difficult to choose which to focus on! I’m glad to have this problem.
I hope you found these insightful — we’ve got a wild year ahead of us and I’m looking forward to how this space develops & matures in 2024.
See you along the ride!
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Disclaimer: the content written in this article is solely for information purposes and does not convey financial nor investment advice. It is not intended to be a recommendation for anything in the crypto/web3 space nor against, but rather an informational piece on some predictions I might have on the market. Even further, bitcoin is a volatile and risky asset, this is explicitly not financial nor investment advice. Additionally, I own bitcoin and am disclosing that fact to you to take into account. Again, not financial, investment, nor any other kind of advice — rather, just my thoughts. Do your own research.
In addition, all content/opinions expressed in this post are the sole views of the author alone, and do not reflect the opinions of the author’s employer, nor anyone else.
