20 Predictions for 2025: A Web3 Landscape from Expansion to Privacy

Author: Equilibrium Research

Compiled by: Yuliya, PANews

Predicting the future is an extremely challenging task, and one could even say it is an impossible mission. However, everyone participates in prediction activities in some form and needs to make decisions based on their judgments about future trends.

Equilibrium has released its annual prediction report for the first time, looking ahead to potential events and industry developments that may occur by the end of next year. This report was jointly completed by Equilibrium's laboratory and venture capital department.

Before diving into the specifics, here is the methodology for making these predictions:

• These predictions focus on relevance (technology-driven), specificity, and falsifiability. Therefore, the report will not include price predictions or vague statements (e.g., "ZK will become faster and cheaper").

• The scope of predictions is strictly limited to areas of professional competence. These predictions reflect Equilibrium's mission to design, build, and invest in the core infrastructure of decentralized networks. Based on this, the report does not cover predictions in areas such as applications, stablecoins, decentralized finance, and governance, even though these areas are also worthy of attention.

Scalability

1. The number of Ethereum scalability solutions (L2/L3) will exceed 2,000

Currently, L2Beat lists 120 L2 and L3 projects (collectively referred to as "Ethereum scalability solutions"). The modularization process of Ethereum will continue to accelerate in 2025, and by the end of the year, the number of scalability solutions will surpass 2,000, growing approximately 17 times from the current scale.

The new L2/L3 projects will mainly come from two directions: application-specific scalability solutions (games, decentralized finance, payments, social, etc.) and "enterprise-grade" L2 solutions (traditional companies expanding into the blockchain space, such as Coinbase or Kraken).

2. The scalability factor of Ethereum will exceed 200 times

The scalability factor refers to the ratio of the daily average UOPS or TPS total of Ethereum scalability solutions compared to the Ethereum L1 layer (data sourced from L2Beat and rollup.wtf). Currently, this value fluctuates around 25 times, and to reach over 200 times, it needs to grow at least 8 times (this growth will be achieved through optimizing existing solutions and launching new ones).

The L2 scalability factor reflects both user demand for Ethereum L2/L3 applications and the scalability capacity of the underlying infrastructure. From a broader perspective, it demonstrates the success of Ethereum's rollup-centric scalability roadmap relative to the demand for block space on the Ethereum L1 layer.

Comparison of daily average UOPS of Ethereum scalability solutions with Ethereum L1 (data source: L2Beat)

3. Solana's transaction processing capacity will exceed 5,000 TPS (non-voting transactions)

Over the past year, due to the growth of the decentralized finance ecosystem, meme coin speculation, DePIN, and demand from multiple other areas, the demand for Solana's block space has remained high. This has not only achieved thorough stress testing but has also driven the core team to continuously improve network performance. Although more and more teams are beginning to focus on scaling the Solana network, enhancing Solana L1 performance remains the top priority for the core development team.

Data source: Solana Roadmap

In recent months, Solana's non-voting transaction processing capacity has averaged 700-800 transactions per second, peaking at 3,500 transactions. It is expected that by 2025, this figure will grow to an average of over 5,000 non-voting transactions per second, representing a 6-7 times increase from the current level. Peak levels may far exceed this.

Solana's average transaction processing capacity in recent months has remained at 700-800 transactions per second (data source: Blockworks Research)

Key network upgrades expected to achieve this goal include:

• Full launch of the Firedancer client on the mainnet: This is the most anticipated major upgrade. While a gradual approach may be taken regarding stake distribution, the overall performance improvement looks quite significant (not to mention the robustness brought by having two clients in production).

• Improvement of the core Anza client: Another core client developed by Anza can optimize its design by learning from some experiences and design choices of Firedancer.

• Other performance optimizations: Including more granular fee markets, more efficient scheduling, and program compression schemes to improve on-chain resource utilization. Another observation is that Solana's blocks are nearing capacity limits (average computational unit is 40m, with a limit of 48m), so increasing block size is also an option.

4. Over 80% of L2/L3 data will be published to alternative DA layers

L2 and L3 can choose to publish data to Ethereum (in the form of blobs or calldata), alternative DA layers (such as Avail, Celestia, EigenDA, and NearDA), or publish to external data availability committees (in extreme cases, data is stored on a single node).

Currently, about 35% of L2/L3 data is published to alternative DA layers (the chart below does not include Avail, NearDA, and EigenDA), with the remaining data published to Ethereum (mainly in blob form). Relevant metrics and data dashboards can be viewed on Celestia, Ethereum, and GrowThePie.

It is expected that by 2025, the share of alternative DA layers will grow to over 80%. Based on the increase in target blobs and maximum blobs in the Pectra update, this will mean that the amount of data published to alternative DA layers will grow 10-30 times from the current level. This growth will be driven by high-throughput rollups (such as Eclipse and MegaETH, which are expected to drive the development of Celestia and EigenDA) and the native rollup ecosystem developing on top of Celestia and Avail.

Data source: GrowThePie

5. ZK-based scalability solutions will surpass Optimistic solutions (by deployment count)

Currently, among the scalability solutions listed by L2Beat, only about 25% (30 out of 120) are validity rollups or validiums (which use ZKP to prove the correctness of state transitions and publish data to Ethereum or alternative DA layers/external data availability committees).

As ZK proofs and verifications become faster and cheaper, the long-term advantages of Optimistic scalability solutions are diminishing. Validity rollups like Starknet have already set records in scalability (and this is just the beginning). At the same time, ZK-based scalability solutions provide stronger guarantees in asynchronous interoperability compared to Optimistic solutions. Finally, with faster and cheaper proofs and verifications, latency (or finality time) naturally decreases without undermining the underlying trust guarantees.

Therefore, it is expected that by the end of 2025, the share of ZK-based scalability solutions will increase to over 50% (likely significantly exceeding this ratio). Multiple ZK tech stacks are expected to launch their production-ready chain development toolkits (such as Polygon, ZK Sync, Scroll, etc.), making it easier to deploy new validity rollups or validiums. Additionally, interest in converting existing Optimistic rollups to validity rollups is also increasing (for example, by utilizing OP Succinct or Kakarot zkEVM for proofs).

6. The maximum Gas limit of Ethereum will double to 60m Gas per block

While Ethereum focuses on a rollup-centric scalability roadmap, the L1 layer still plays an important role for many high-value applications that are less sensitive to Gas fees. Over the past year, there have been calls from various parties inside and outside the Ethereum Foundation to raise the Gas limit.

The current maximum Gas limit per block is 30m Gas (with a target of 15m), a figure that has not changed since 2021. Since then, blocks have remained at the target level (50% of the maximum limit). It is expected that this limit will double in 2025, with the new maximum limit reaching 60m Gas, and the block target being 30m Gas. However, this requires the following conditions to be met:

• The Fusaka update is implemented in 2025

• The Ethereum core developer community agrees to raise the fuel limit as part of Fusaka

ZK Proofs

7. By the end of 2025, every Ethereum block will be proven

ZK proofs for Ethereum blocks can make it easier to verify correct execution. For example, this will benefit lightweight clients that currently rely solely on consensus/validator signatures.

Proving each Ethereum block using a general-purpose zkVM to run EVM execution is already feasible at this stage, with an annual cost of about $1 million (considering the speed of technological advancements, this cost may already be lower by the time this article is published).

Although the proof will be delayed by a few minutes (currently, generating a proof for an Ethereum block takes an average of this long), this is still beneficial for services that are not time-sensitive. As costs and proof times decrease, reliance on ZK proofs will become feasible for a broader range of use cases. This leads to the next prediction:

8. General-purpose zkVM will be able to prove Ethereum mainnet blocks within 30 seconds

The Ethereum roadmap includes eventually embedding its own zkEVM into the core protocol, which will help avoid redundant execution and allow other services to easily verify the correctness of execution. However, implementation may still take several years.

In the meantime, general-purpose zkVMs can be utilized to prove state transitions. Over the past year, zkVMs have made significant improvements in performance and provided a simple developer experience (for example, programming can be done in Rust).

Proving Ethereum blocks within 30 seconds is an ambitious goal, but Risc Zero has already claimed to achieve a 90-second proof time. However, in the long run, proof times need to be reduced by at least an order of magnitude to achieve real-time proof for Ethereum. Considering the 12-second block time, proofs need to be fast enough to allow time for communication, verification, and voting.

9. Over 90% of all ZK proofs across blockchains will be generated in a decentralized manner

Currently, most ZKPs are generated in a centralized manner by core teams. This approach is costly (with suboptimal hardware utilization), weakens censorship resistance, and adds complexity for teams that need ZKPs but do not necessarily want to run their own proof infrastructure.

While decentralized proofs can be built for specific networks (i.e., only for specific L2s or use cases), decentralized proof networks can offer lower prices, simplified operations, and better censorship resistance. The price advantage comes from the decentralized network's ability to find the cheapest computing resources globally, as well as higher hardware utilization (users only pay for the computing resources they use).

For these reasons, it is expected that most projects will choose to outsource their proofs (several projects are already showing this trend), and by the end of 2025, decentralized proof networks will generate over 90% of all ZK proofs. Gevulot will become the first production-ready proof network capable of handling large-scale proof volumes, and as the industry expands, more similar networks will emerge.

Privacy

10. Privacy blockchain applications will experience their "ChatGPT moment"

Before the emergence of ChatGPT, most people did not consider the use cases and benefits of AI and LLMs. This situation changed overnight, and now most people have interacted with LLMs or at least understand how they work.

A similar transformation is likely to occur in the blockchain privacy space. While many people are still questioning the severity of on-chain privacy issues (or are even unaware of the problem), privacy is crucial for protecting individuals and businesses using blockchain, while also expanding the expressive capabilities of the blockchain (i.e., the content that can be built on it).

While privacy itself rarely becomes a selling point, the following framework can be used to identify the categories with the highest privacy value:

1. The cost of transparency (non-privacy) is high:

• On a personal level (e.g., political polling applications, exposing identity may make one a political target)

• On a business level (e.g., regulations related to customer data privacy or leaking competitive information)

1. Privacy brings direct economic benefits:

• Better execution and avoidance of front-running (dark pools)

• Preventing others from seeing and copying trading strategies, etc.

1. Collaboration has high friction:

• Privacy can become a "business enabler," especially in situations where collaboration is impossible or costly

• If the goal is to reduce reliance on a single third party, programmable and expressive private computation is needed

1. Enabling entirely new use cases:

• By expanding the expressive capabilities of the blockchain, new applications that were previously impossible can be realized

• This is particularly attractive in the long term, especially for applications that require private shared states (e.g., gaming, social graphs, etc.)

11. Zama's MPC threshold decryption library will become the de facto standard

Zama, which develops FHE infrastructure for blockchain and AI, is expected to soon release its MPC decryption network library. This will be the first major open-source library of its kind.

Given the limited competition, it may become the de facto standard for benchmarking and comparison for everyone—similar to what Arkworks and MP-SPDZ have done in the ZKP and MPC fields. However, this largely depends on the leniency of the licensing.

12. Nym's decentralized VPN network will reach 10% of TOR network users

Nym focuses on foundational layer and network privacy. The Nym obfuscation network can be integrated into any blockchain, wallet, or application to protect IP addresses and traffic patterns. Meanwhile, NymVPN offers a decentralized VPN (currently in public testing) with the following features:

• A 5-hop new type of Nym mixing network that provides stronger privacy guarantees through advanced onion encryption, data splitting, mixing, and traffic obfuscation

• A 2-hop secure WireGuard decentralized VPN with onion encryption but no traffic obfuscation in a fast dual-hop decentralized mode

To incentivize supply-side participants, Nym is expected to run "incentivized privacy supply" to increase the number of nodes in its VPN network. However, on the demand side, they need to prove that their product is worth using.

10% of TOR usage (averaging 2-3 million users) will translate to 200,000 to 300,000 NymVPN users. This goal, while challenging, is achievable, provided the team executes effectively in marketing. In the short term, cryptoeconomic incentives can also be used to guide demand and subsidize usage.

13. At least one major Rollup provider will integrate privacy computing (in production)

In addition to the privacy-first approaches adopted by teams like Aztec, Aleo, and Namada, another way is to outsource the computations that require privacy guarantees from existing transparent networks. This "add-on privacy" or "privacy as a service" approach allows applications and networks to achieve some privacy guarantees without redeploying to a new privacy-centric network and losing existing network effects.

There are various methods for private/confidential computing, with providers including:

• Focused on MPC: Arcium, Nillion, Taceo, SodaLabs, etc.

• Focused on FHE: Zama, Fhenix, Inco, etc.

• Focused on TEE: Secret Network and Oasis Protocol

It is expected that at least one major rollup provider (Optimism, Arbitrum, Base, Starknet, ZK Sync, Scroll, etc.) will integrate one or more of these confidential computing providers, enabling their upper-layer applications to use them in production.

14. More than three startups will raise funds to accelerate the development of indistinguishable obfuscation (IO)

Indistinguishable obfuscation (IO) is simply a form of encryption that can hide (obfuscate) the implementation of a program while still allowing users to execute it. It involves transforming a program or circuit into an "obfuscated" version that is difficult to reverse engineer, while the obfuscated program still performs the same functions as the original. In addition to providing verifiable computation guarantees similar to ZKP, IO can also support private multi-party computation, maintaining secrets and using them only under specific conditions.

While IO is currently slow, costly, and practically unfeasible, ZKP was also in a similar situation a few years ago. Recent examples include teams dedicated to programmable privacy based on MPC and FHE in blockchain, which have made significant progress over the past year. Overall, when capable teams receive ample funding, significant progress can be made in what seems like a short time.

Currently, only a few teams, such as Sora and Gauss Labs, are implementing some IO. Given the potential of IO, it is expected that at least three startups will raise venture capital to accelerate development and make it more practical.

15. The adoption rate of encrypted mempools will remain low (<10% of total transaction volume)

Encrypted mempools are a method to reduce harmful MEV (such as front-running and sandwich attacks) by keeping transactions in an encrypted state (submit-reveal) before determining the order. There are many different approaches in practice, mainly on two trade-off dimensions:

1. Product integration:

• External protocols (e.g., Shutter)

• Integrated as part of a broader product (e.g., shared sorting protocol Radius)

1. Trust guarantees for decryption:

• Trusted third parties

• TEE

• Threshold decryption

• Time delay

While the overall benefits of encrypted mempools seem positive, external protocols may struggle to gain adoption. On the other hand, in projects that offer encrypted mempools as part of a broader product, the adoption of encrypted mempools depends on the success of the broader product. The most straightforward adoption path is to incorporate the solution into the core protocol itself, but this may take over a year to implement (especially for Ethereum, although it is already on the roadmap).

Consensus and P2P Networks

16. At least one existing network will transition from PoW or BFT-based PoS to DAG-based consensus

Directed Acyclic Graph (DAG)-based consensus mechanisms can separate communication (data propagation) from the consensus layer (linear ordering of transactions) in a way that is more suitable for distributed systems. The data structure allows for deterministic ordering, so long as each node (eventually) has the same DAG, all nodes will ultimately arrive at the same ordering.

One key advantage of this approach is the reduction of communication overhead. Leaders do not need to build and distribute official blocks but only need to authenticate the determined sub-DAG. Upon receiving this authentication, other nodes can deterministically construct equivalent blocks locally. In addition to early pioneers like Aptos and Sui, newer protocols (such as Aleo) have also implemented DAG-based consensus. This trend is expected to continue, with at least one major protocol deciding to transition from proof of work or BFT-based proof of stake consensus to DAG-based consensus.

Due to the complexity of implementation (even when adopting existing implementations like Narwhal-Bullshark or Mysticeti), the likelihood of completing a full transition by the end of 2025 is low. However, if a team can execute quickly, this prediction may be overturned.

17. The QUIC transport layer will open to security components beyond TLS (reducing binding to HTTP)

QUIC (Quick UDP Internet Connections) is a modern transport layer protocol developed by Google and later adopted as a standard by the Internet Engineering Task Force (IETF). Its design aims to reduce latency, improve connection reliability, and enhance security.

QUIC uses UDP (User Datagram Protocol) as its foundation, rather than the traditional TCP used in HTTP2/1. However, HTTP2 benefits from decades of optimization—both at the protocol level and by shifting workloads to the kernel level—giving it a performance advantage.

While there have been some proposals to incorporate QUIC into the kernel, a QUIC implementation that does not rely on TLS will make hardware acceleration easier. This will alleviate some performance issues and may drive more use of QUIC in P2P networks. Currently, among major blockchains, only Solana, Internet Computer, and Sui are known to use QUIC.

User Experience

18. At least one Solana application will operate in a Rollup/network expansion manner, but the user experience will feel like L1

Although the Solana core team is focused on improving L1, the industry has already observed a modular trend in Solana. A key distinction is that Solana's network expansions (L2s) focus less on pure scalability and more on providing new experiences for developers (and users) that the current L1 cannot achieve. This includes lower latency and customized/sovereign block space, primarily applicable to use cases that run well in isolated environments and rely less on accessing shared states (such as gaming or certain DeFi applications).

Given the user and product-oriented characteristics of the broader Solana ecosystem, this trait is expected to extend to these network expansions. It is anticipated that at least one Solana application will be launched as a rollup/network expansion, but users will not notice that they have left Solana L1. Potential competitors include applications built on Magic Block or Bullet (ZetaX).

A good example in the Ethereum ecosystem is Payy - a mobile application that offers private USDC payments. It features a simple onboarding process and a smooth user experience, but in the background, it operates as an Ethereum validium built on the Polygon tech stack.

*Disclaimer: Equilibrium Ventures is an investor in Magic Block and Zeta.

19. Over 25% of on-chain transactions will be generated in a chain abstraction manner

Chain abstraction is a term that encompasses various methods used to abstract the complexity of navigating blockchains, especially in a multi-chain world. While early adopters (power users) are willing to endure more hassle, chain abstraction can provide reasonable trade-offs for less experienced users. Another way to view this is as risk transfer, where users trust external parties (such as intent resolvers) to manage and handle multi-chain complexity on their behalf.

It is expected that by the end of 2025, at least 25% of all on-chain transactions will be generated in a chain abstraction manner, meaning end users will not need to know which underlying chain they are using.

While chain abstraction does increase trust assumptions and obscure risks, institutions similar to "on-chain rating agencies" (e.g., L2Beat) may emerge to rate different solutions. This will allow users to set preferences, such as only interacting with chains above a certain security level (e.g., rollups with forced exits). Another risk factor relates to the resolver market, which should be competitive enough to ensure users receive good outcomes and minimize censorship risks.

Ultimately, professional users can still choose to operate as they did before, while those who feel less proficient with different options can outsource decision-making to more specialized third parties.

20. Most new Rollups will launch on ZK tech stacks with native interoperability

Validity rollup clusters based on shared L1 bridging designs provide stronger (asynchronous) interoperability guarantees than their counterparts. With each additional rollup launched, the network effects of the rollup cluster will also increase.

It is expected that most new rollups launched in 2025 will be built on ZK tech stacks with native interoperability. While the cluster consists of multiple different chains, the goal is to make users feel as if they are using a single chain. This allows developers to focus more on applications, user experience, and onboarding processes.

Conclusion

Infrastructure and Scalability

The first applications are already beginning to expand their user bases, but there is still a lot of work to be done to ensure that the underlying infrastructure can accommodate more users and a wider range of applications.

Although the industry has made significant progress during the past bear market, new scalability bottlenecks and the need for infrastructure financing will still emerge. This is a dynamic that can be observed across multiple cycles, and there is no reason to believe this time will be different. In other words, there is no such thing as "sufficient scalability." Whenever capacity increases, new use cases become viable, driving up demand for block space.

Privacy Issues

Privacy may be the last major issue to be addressed in blockchain. Currently, the understanding of the future roadmap is relatively clear, with the key being to integrate all parts and improve performance. The positive ruling in the recent Tornado Cash case has raised expectations for a more open attitude from the government, but there is still a lot of work to be done on both technical and social levels.

User Experience

The industry has done quite well in abstracting complexity in the use of a single blockchain over the past few years. However, with the launch of more new chains and L2/L3s, optimizing cross-chain user experience is becoming increasingly critical.

ZK Proof Technology

Several predictions for next year are based on ZK proofs becoming cheaper and faster to enable more use cases. This trend is expected to continue into 2025, primarily driven by the following factors:

Software optimization

More specialized hardware

Decentralized proof networks

• Able to find the cheapest computing resources globally
• Allowing users to avoid paying for idle time

Overall, the development prospects for 2025 are promising, and the industry will continue to move forward.