Introduction
From the perspective of encryption history, the Web3 turmoil in 2023 will be unprecedented. strange. Following the bottom of the bear market in 2022, the crypto world has gradually gone through the bull market in 2023. But this year's tremendous progress in AI and the resulting threats have forced Web3 into an epic chapter. As early as the beginning of Bitcoin, people were longing for blockchain to establish order for intelligent networks; later, people realized that AI and blockchain/Web3 would meet in the metaverse, but it was only a longing; until ChatGPT in 2023 The popularity of AI caused the threat theory and computing power management issues, which forced people to start the implementation of the combination of AI and Web3.
We can judge from this that the construction of the metaverse in 2023 has begun to chaos, and the singularity of the metaverse has occurred. In this context, we are ushering in a first year of metaverse construction and a crypto bull market cycle that will surely go down in history. In 2024, despite the changes in the physical world, opportunities for mankind to move toward a digital society are surging.
01 Fusion: Asset Market of TradeFi and DeFi
2023 is called the first year of RWA, but why is the RWA market tepid this year? Let’s start by answering this question: Because the early media of the RWA market were mainly treasury bonds, gold and the US dollar, the investment returns of these assets were relatively stable, with limited rise and fall. Even the US dollar intervened in the form of stable coins, and TradeFi assets were RWA-based and integrated into the crypto economy. DeFi market convergence has limited room for maneuver.
With the success of Bitcoin ETFs on Wall Street, more TradeFi assets with asset investment returns, such as stocks and futures and other derivatives of traditional financial markets Pinhui will enter the encryption market through RWA. Taking BlackRock as an example, they are studying how to RWA a large number of their TradeFi assets to integrate into the crypto market. Let me give you some data to help you feel what this means - according to BlackRock's 2023 Q3 financial report, BlackRock's management scale is US$9.1 trillion. Previously, the management scale of Grayscale, a major Bitcoin player we were very familiar with, is Tens of billions of US dollars, including more than 20 billion US dollars in Bitcoin trust.
Therefore, the current crypto market with Bitcoin as its core is simply not enough for BlackRock. After the Bitcoin ETF enters the traditional financial market, bringing more TradeFi assets into the crypto market is worth BlackRock's play. Therefore, it can be judged that the RWA market in 2024 will be released in huge quantities.
Bitcoin ETF brings Bitcoin into the traditional financial market and brings funds to the encryption market; RWA brings assets from the traditional financial market into the encryption market and provides funds for the encryption market. The market brings quality assets. Therefore, we optimistically expect that it is a high probability event that the total volume of the crypto market will exceed US$10 trillion in 2024, and that the price of Bitcoin will reach US$100,000 this year. (Friendly reminder to investors, this article does not constitute investment advice. Please make your own decision based on your own judgment).
But this is just the beginning. We skip the description of this bull market cycle and, in line with the theme of the full text, directly look forward to the construction process of the metaverse in the next ten years. More than half of the high-quality assets in the physical world will be integrated into the crypto world through RWA; similarly, native crypto assets represented by Bitcoin ETFs will also be integrated with the traditional world financial system, providing more diverse wealth rights and assets to the early residents of the Metaverse Manage paths.
It is worth mentioning that some people are worried that after this bull market, the encryption market will fall into the fourteen-year bear market cycle encountered during the development of the Internet. Let’s not talk about whether these two things are comparable and referenceable. Taking a step back, even if the market cycle has its own inherent regularity, we believe that this will still be resolved by the above narrative. The industrial economic power of the huge social changes brought about by the Internet cannot match the social changes and economic energy brought about by the blockchain/Web3 we are in today.
02 Return: Basic ecology such as public chain performance, cross-chain interoperability and storage
After experiencing the baptism of inscriptions at the end of 2023, people in the crypto world have realized that the current public chain and other infrastructure are still younger. For example, Layer2, which has received hundreds of millions in financing, cannot withstand the baptism of inscriptions, not to mention its support for the application ecosystem. 2024 will undoubtedly be the year when a new round of public chain cross-chain interoperability and basic ecology such as storage return (these efforts will become the basis for the intersection of AI and Web3/blockchain in the metaverse).
For example, Layer2 is already considering upgrades and breakthroughs - if the storage and expansion you spend huge sums of money on are not enough to attract application developers, then should you do it yourself? Think about it, take a step forward, and build an application ecosystem so that good applications can develop better here and users can have a better application experience here.
For example, intention, modularization and chain abstraction. Against the above background, these will enter the stage of quantitative change to qualitative change in 2024 based on initial practice in 2023. effect. It is worth mentioning that we have conducted case studies on intent transactions. The imagination space of the new intent-centric narrative is huge and there is even nowhere to start. Rational developers and crypto ecosystem builders have already focused on the path to large-scale application and adoption of projects.
For example, NFT has evolved to ERC404, which has brought high-quality basic requirements for the construction of crypto-economy and metaverse. Its role is first to empower financial liquidity, which is not only reflected in the avatar NFT/PFT market, but also plays a role in the RWA market; in addition, it can be combined with DID to empower DID’s identity, contribution and honor, After the relationship between assets, 404 can help decompose it, so that DID can contribute the corresponding status, honor, rights and assets and divest them.
And the DePin concept is rising. For example, the AI+DePin project Peaq, which mainly promotes the European and American markets, has been on the main network, and now a new Fortune 500 company is onboarded every week. Partner, it is also mapped as the key layer1 in the Messari Depin report. DePin will be an important breakthrough and infrastructure for the combination of AI and Web3. In addition, whether the more basic network bandwidth related to this can be combined with the blockchain will also be witnessed in this cycle.
As for the public chain track itself, we expect that a new public chain ecology will gradually prosper in this cycle. However, from the narrative perspective of 2024, the final The mainstream ones are still the Ethereum ecology and the Bitcoin ecology:
Ethereum ecology: In addition to the step-by-step Layer 2 and the possibility of application development, our greater expectation lies in TradeFi The incremental market brought about by (traditional finance). There is a high probability that the TradeFi (traditional finance) RWA we discussed in the first part will choose Ethereum as the path to enter the crypto market. For example, BlackRock, which wants to put assets on the chain, has to develop its own Layer 2, and there is a high probability that it will. Choose Ethereum.
Bitcoin Ecology: As early as the DeFi period of the Ethereum ecosystem, people were imagining the huge market space of "BTC+DeFi". All this will become reality in 2024. Our expectations for the Bitcoin ecology should not be to do it again in Ethereum, but to pioneer the market space brought about by the combination of BTC and DeFi, which is the largest in the crypto market. At present, there are already practices in the market that try to make assets circulate better on the second layer, be better issued, and obtain more leverage.
The leap forward in the basic ecology of the encryption world will provide the possibility for AI and Web3 to achieve great success.
03 Iteration: Application Market Led by AI and Web3
As mentioned earlier, Web3 has not yet entered the application era. To a large extent, Web3 application development is subject to the threshold of the public chain. Some good Web3 iterations and Web2 application scenarios have been stranded due to public chain performance and protocol thresholds. But it is the practice of “AI+Web3” that opens the regulatory gap in the Web3 application market.
Of course "AI+Web3" is still subject to the infrastructure ecosystem, and AI on-chain is a cutting-edge proposition, but the progress of this matter depends on the development The team’s understanding of AI on-chain. Compared with the development teams in Web3 social networking, chain games and other tracks, we have reason to believe that the AI development team will have a deeper understanding and practice of AI on-chain and be cutting-edge.
Even, we can further imagine that the practice of the AI ecology based on large models and the Web3 ecology based on public chains in this era is likely to be their future The base at the intersection of metaverses. Therefore, it is optimistically expected that there will be several "AI + Web3" projects with more than 1 billion U in 2024, which will lead the encryption world to enter the era of Web3 applications, applications of Web3 social networking, chain games, and the Web3 media we are in. The market will also be active in this cycle, and there will even be functions dedicated to serving "AI + Web3". For example, MugglePay, which is dedicated to helping companies accept cryptocurrency payments, has shifted its development focus in 2024 from e-commerce to the AI and gaming fields. , and has launched an original subscription payment (Web3 subscription) function for AI service providers; and StreamAi, which provides data storage and accurate push for AI, is committed to becoming the largest cloud service provider in "Web3 network and space interstellar network". And ChatGPT for "programs and robots".
However, we need to sort out the "AI+Web3" that is active in this cycle and the "AI+Web3/Blockchain = Civilization" we once proposed "s difference. This cycle of "AI+Web3" is just a collection of application scenarios, which can be understood within the inertial iteration logic of "Internet +". However, in the next ten years or even decades, AI, which continues to improve productivity, and Web3, which is Turing-complete production relations and even social relations, will meet in the metaverse, and mankind will enter a new era of digital advancement.
Of course, all this depends on the practice of these active "AI+Web3" projects in 2024.
Conclusion
This will probably be based on Bitcoin The last bull-bear iteration of the cycle will probably be a bull market cycle that will go down in history. Since then, Web3/blockchain has begun to establish order for AI/intelligent networks, and the native asset market in the crypto world driven by this will also expand rapidly; at the same time, the digitalization of physical world assets (RWA) has also entered the fast track, and the crypto market Assets will gradually surpass the financial asset market of traditional physical markets.
On this basis, people’s imagination of the metaverse has begun to come to fruition. The two main lines of metaverse construction (AI and Web3) have unfolded one after another and will eventually converge in Metaverse. The latest news is that Sora's generation ability is amazing, and OPENAI has promoted the construction of the metaverse a big step forward. But Web3 in the encryption world has not fallen behind. The current constraints are more basic hardware equipment and network facilities, especially network facilities. A fatal question is, can users in the Chinese-speaking world dare to trust China Mobile? While human elites are laying out technological highlands related to the future, China Mobile is still busy consuming user traffic in exchange for more user phone bills. It is expected that this type of problem will be solved using methods from the Web3 world.
2024 has a lot to look forward to. mutual encouragement!
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