Embracing the Bull Market: 2024 Outlook and Trends for Ecosystems of Applications on Various Chains

Author: 0xWendy, SevenUp DAO

This upcoming bull market is significantly different from the previous ones. The infrastructure of public chains has been greatly improved, even to the point of redundancy, and there are countless innovative approaches in entrepreneurial projects. Let's dive into the chains and trends:

1. Chains

1. BTC: Ordinals Renaissance, Overlaying Macro Multiple Benefits

As the king of all chains, Bitcoin undoubtedly backs the most appealing narrative with Ordinals. Although ninety-nine percent of inscriptions may go to zero next year (or even in a few months), the substantial gains in stocks like $MARA have even caught the attention of traditional financial markets. Besides the halving expectations, inscription fees are an important driving factor.

As mentioned in previous tweets, pure memes are hard to sustain. In the context of centralized exchanges like Binance and VC support, this niche will be more project-led, such as launchpads ($auction, $turt, $bake, etc.), DeFi (staking Babylon, various swaps), bridges ($mubi, etc.), and L2 (Stacks).

Another interesting trend is the participation of Western entities in this Eastern-led frenzy, transitioning from misunderstanding and disdain to gradual involvement. The Asian-led Unisat and OKX, along with the European and American development teams from CBRC and Layer 1 Foundation, are worth looking forward to in their future developments.

A few days ago, I wrote an essay discussing the value of Bitcoin, which can be found on the IOSG Ventures public account. The main argument is that under the backdrop of halving, ETF, and interest rate cuts, the narrative object for Bitcoin as a store of value has gradually shifted to mainstream institutions. In the context of Bitcoin's high price as digital gold, retail participation and narratives will likely choose the Bitcoin ecosystem.

2. Ethereum: Big and Unyielding, L2 Takes a Backseat

Despite some recent FUD surrounding Ethereum, its position and contribution in the entire crypto space are undeniable. The most anticipated Ethereum narrative in 2024 is undoubtedly the Cancun upgrade, where the introduction of Sharding and Blobs will significantly reduce L2 fees, allowing the Ethereum main chain to retreat more into the background as a consensus layer and data availability layer, providing underlying support for numerous Layer 2 networks. Eigenlayer's re-staking will also go live on the mainnet next year.

However, in the short term, rollups still occupy a small proportion, and the high gas fees are unfriendly for small retail investors. In the midst of many L2s competing for attention, it is also challenging to create new narratives, so I personally will focus more on L2.

3. Solana: A Favorite Among Western Institutions, the First Chain of Depin

From being a chain known for outages to breaking free from the shadow of FTX, Solana is undoubtedly a favorite among Western institutions, with its cash capabilities being quite appealing. $PYTH and $JTO have sparked airdrop frenzy, and NFTs like Mads have also performed well. As a high-performance public chain, the Depin narrative tightly binds with Western institutions. Although there has been much debate recently about the value of Depin, which some see as old wine in new bottles, it does not prevent various forces (like Multicoin and other leading institutions) from betting on building this narrative, with SOL's official support as well, making Depin one of the main narratives capable of carrying the bubble in the next bull market.

The valuation and imagination of Depin will be unlocked, with projects like $honey, $mobile, $rndr, Grass, and the most appealing AI-related projects like Akash, Gensyn, and ionet all gearing up.

4. Base: Backed by a Good Parent, Constantly Innovative at the Application Layer

The reason for placing Base in such a prominent position is not only because its TVL currently ranks high among L2s but also due to my personal view on L2 development: application-driven is the correct strategy.

The Base ecosystem foundation has indeed put effort into investment and incubation, and it feels like it has its own logic and taste. If you look at the projects supported by Base, you will find that they are not dominated by technology and high performance but cleverly utilize the decentralization of blockchain and the low gas fees of L2 for many interesting attempts. From the once-popular Friendtech backed by Paradigm to the gambling mini-game ethxy incubated by a16z, and the gambling battle game play arena funded by 1kx, to Paragraph, which can compete with leading creator platforms like Mirror, these are all outstanding applications. Although the team emphasizes the decentralization of the Base chain and its separation from Coinbase's business, some things are understood by all.

As the only compliant exchange in the U.S., the connections and capabilities of CB are naturally not to be overstated. The backers of multiple applications on the platform are also top-tier, so the development of Base next year is worth watching.

5. Blast: L2 Pinduoduo, Simple, Brutal, Effective, and Wealthy

Although Blast resembles a secondary pool of Blur, I personally hold a positive attitude. Top institutions and founders are at the helm, and although it has been jokingly referred to as the Lido distributor, its massive TVL provides a solid foundation for future development. In my previous analysis of Blast, I highlighted its large airdrop incentives for development (50%), which will attract brave participants, and there will be no worries about a lack of meme coins to chase. Moreover, Tieshun has explained that Blast will be used to build a better NFT ecosystem and may migrate from Blur, so we can also expect a small spring for NFTs and NFTFi on Blast.

6. Other Interesting Infrastructures

Here I will briefly mention without elaboration: parallel EVMs like Neon, Nomad, the localized hotspot Metis from V God’s mom narrative, the experienced and playful ZkFair team, Sei/Sui which may pump after trapping investors, Bera focusing on liquidity, Manta also being a Lido distributor, Mantle for DeFi building blocks, and technical zk series like zksync/Scroll. This bull market will push many L2s to hasten their token launches, but launching tokens is also a delaying tactic. Without ecosystems and applications, they can only become empty cities heading towards decline.

7. Among several gaming public chains, Ronin is one I particularly like

Once the king of the last bull market with Axie, it fell from grace after a massive theft of its cross-chain bridge, but the team has shown resilience, not only maintaining a healthy balance but continuing to build. Recently, the new star Pixels has achieved quite impressive results, and the performance of RON's price is also commendable.

2. Trends

If we step out of the perspective of chains and summarize several trends of the bull market, we can find:

1. New Asset Issuance Methods Bring Speculative Frenzy with Low Costs and High Odds

Too many people have talked about Ordi, so let’s mention something similar: on Solana, probability (gambling) chains like Zero and foaminscribe have led to a rush of gamblers using bots for low-cost scratch-off lottery tickets. Speculation is an important driving force for industry development, and the dopamine rush from high odds is synonymous with bull markets. Therefore, project teams should think more about these gameplay designs.

2. Meme is the Pearl of the Crypto Bull Market

From this year's first half with Pepe to Harry Potter, from Shiba Inu to second-hand Hondas, there will be a phenomenon-level meme emerging every so often. Understanding meme culture deeply is very important and necessary. The spirit of crypto was born from a rebellion against tradition, and mocking rebellious niche geeks is a form of cyber aesthetics. Memes are not unowned natural products; on the contrary, they are a fusion of capital manipulation and community sentiment, timing, location, and people, overflowing with market liquidity and emotions. The huge wealth creation myth is also one of the important means to attract external capital and attention into cryptocurrencies. The rational essence of playing memes is to make the narrative memorable first. More importantly, keep your IQ at 50 while playing.

3. Behind Applications is DeFi, but DeFi May Not Be a Good Application in This Bull Market

GameFi and SocialFi are essentially shell games of DeFi, but I personally believe that DeFi will not replicate the glory of the last bull market. V God’s new article also opposes overly financialized applications. The barriers to entry for DeFi nesting dolls are high, and they lack fun, which may not be a good choice for mass adoption.

4. Applications Drive the Development of Supporting Solutions, Quietly Making Big Profits

The rise of the application layer has led to the development of Privy and more AA MPC wallet solutions, and the wallet market landscape will change significantly. The full-chain game engines behind the GameFi track, like Mud and Dojo, also belong to this category. Users may not have a particularly deep impression or understanding of them, but compared to Unity and Unreal, the related infrastructure of GameFi/AW has a very large imagination space.

5. The Budding of Mobile End

Although it is still very early, from OKX's heavy investment in mobile wallets and achieving some success, it is evident that pulling out cash for a gamble is a user necessity. Although competition between on-chain and mobile is fierce, it is undoubtedly a huge cake, and it remains to be seen who will win.

In summary, the ecosystem of this bull market can be described as a hundred flowers blooming, with many things worth playing and looking forward to, and there are many attempts in the industry's development.