Reflections After Token2049: Structural Changes and Emerging Trends in the Crypto Industry

The Token2049 event in the cryptocurrency industry has concluded, with entrepreneurs and professionals from all over the world gradually leaving Singapore. Through this period of intensive communication and discussion, I have gained some new insights into the narratives of the new cycle.

This year, the overall structure of the cryptocurrency industry has been further improved:

1. Omnichain remains the most关注ed narrative of Layer0

A well-known Layer 0 project not only defines full-chain interoperability with a super-light node model but also launches the new standard of Omnichain Fungible Token (OFT). OFT provides a more user-friendly and efficient solution for cross-chain transfers, including two versions: v1 and v2, with v2 supporting non-EVM chains. Additionally, there are relevant standards supporting Omnichain NFTs.

Many projects have adopted this OFT standard, such as a certain Layer 2 project, a certain multi-chain stablecoin, and a certain CDP protocol. During Token2049, the Layer 0 project also provided free electric vehicle pick-up and drop-off services to facilitate participants.

2. Layer 1 projects are no longer the focus of market attention.

In this cycle, the market has differing opinions on Layer 1 projects. Although new public chains in the Move ecosystem have received some attention, neither the new public chains focusing on DeFi and NFTs nor those supporting multiple programming languages seem to have gained widespread consensus.

Many people no longer believe that a new public chain can emerge that surpasses Ethereum. Even if they think Ethereum may not be the ultimate solution, they are reluctant to invest heavily in new Layer 1 directions. Of course, there are still some institutions that continue to invest in new Layer 1 projects.

3. The Layer2 landscape is basically determined, and the supporting middleware is ready.

Optimistic Rollup is mainly led by two major projects, while the first tier of ZK Rollup/zkEVM includes several well-known projects. The middleware supporting ZK Rollup/zkVM is also ready, mainly including decentralized ordering networks, ZK proof generators, and hardware accelerators.

4. Cash Cow Projects Emerge in the Middleware Field

After ETH2.0, the LSD (Liquid Staking Derivatives) track has become the second "cash cow" business direction following Bitcoin PoW mining. Under the Ethereum PoS mechanism, the annual output value of Staking is approximately 680,000 ETH. In addition, the MEV (Miner Extractable Value) track has also begun to rehearse future profit distribution mechanisms before the implementation of Danksharding.

5. High Yield Rates Promote LSDFi and RWA Application Opportunities

ETH Staking yields have become the "bond yields" of the cryptocurrency industry, and LSDFi has further enhanced the yield for ETH holders. Currently, the annualized yield for Ethereum's PoS is approximately 3.6%, and with the additional yields from LSDFi, it provides substantial returns for long-term ETH holders. Meanwhile, the high yields of U.S. Treasury bonds have also driven the development of RWA (Real World Assets).

6. Lowering the barriers to user experience becomes a fundamental requirement

To achieve widespread adoption, lowering the threshold for user experience has become crucial. Intent Centric and TGBot are recent hot topics aimed at addressing issues such as protocol usability and maximizing user benefits.

7. The combination of Crypto and AI becomes a new trend

Token2049 showcased many projects that combine Crypto and AI, mainly including on-chain interaction automation, To Earn empowering AI businesses, Web3 version of ChatGPT, and ZKML among other directions.

As an important hub connecting the East and the West, the Token2049 event in Singapore attracted over 10,000 participants. Most major projects took part, with service-oriented projects more involved in the main venue booths, while narrative projects tended to hold surrounding activities.

Despite changes in the market environment, the industry continues to develop and innovate. Continuing to build and explore new opportunities remains the main theme of the cryptocurrency industry.