Outlook for Each Track of Web3 in 2024

After a round of adjustments in 2023, the Web3 market has seen new developments across various tracks. Looking ahead to 2024, we believe the following areas are worth focusing on:

ZK Technology

ZK technology further expanded to more application scenarios in 2023, mainly divided into several directions:

• zkEVM: Various types of zkEVM have made progress, but face different challenges. Attention needs to be paid to the specific development paths of each project.

• zkVM: The main technical route is zkWASM, with application direction focused on high-performance DEXs, etc. The RISC V architecture is also being explored.

• ZK Mining: GPU and FPGA efficiencies are comparable, but ASICs may show differentiation. The increase of Prover DAOs makes computing power the core competitive advantage.

• ZK Middleware: includes zkBridge, zkPoS, ZK Coprocessor, zkML and other directions, each with progress.

MEV

Future Development Directions in the MEV Field:

• Focus on the early stages of the trading supply chain, especially the intention stage.
• The next-generation DEX design and infrastructure will attract more capital.
• Private auctions/trading pools can improve the trading supply chain if they operate effectively.
• Permissionlessness is the ultimate goal of the track.
• The MEV supply chain will undergo changes in areas such as APS, document execution, and PEPC.

Account Abstraction ( AA )

The AA track is mainly divided into two categories: smart contract wallets and modular services.

• In terms of smart contract wallets, the wallet factory is worth paying attention to.
• In modular services, Bundler and Paymaster have become standard services.
• The AA development of L2 is good, and EF is considering providing native support.
• The support for AA by DApp still needs improvement.
• Private mempool may integrate with MEV and intent

Intents

The development of Intents is rapid, future trends:

• Need to integrate with MEV and AA architecture
• The Telegram Bot may evolve towards Intent.
• Solving issues such as solver malfeasance and order flow trust is key.

Data Availability(DA)

Characteristics of the DA track:

• There are not many participants, and the head effect is obvious.
• Assess project security, customizability, interoperability, costs, etc.
• Large Rollup projects still tend to choose Ethereum as the DA layer.
• Small and medium-sized projects may choose other DA solutions.

Rollup Framework and RaaS

• The rollup market is basically saturated and needs new development directions.
• Pay attention to successful use cases and interoperability solutions on RaaS
• Some L2/L3 frameworks have received substantial resource support.
• New technologies such as FHE rollup are worth paying attention to.

Cosmos

• Cosmos Hub will continue to strengthen its ecological position.
• Application chain development is influenced by L2 and others, but there is still room for growth.
• High customizability is an advantage, allowing it to evolve with mainstream narratives.

Security

• Security projects cover various aspects, including on-chain monitoring, tracking tools, auditing services, etc.
• Different tools are suitable for detecting specific types of vulnerabilities.
• Tool combinations cannot completely replace manual review.
• Pay attention to the project's maintenance update speed, vulnerability database size, etc.

AI and Crypto

• Main combination direction: underlying computing power infrastructure, specific data source training, chat tools, data labeling platform, etc.
• Focus on ZKML, projects with advantages in crypto vertical data, and to C products closely combined with AI.

DeFi

• The demand for actual yield rate products is rising, such as LSDfi or RWA.
• DEX opportunities increase, especially for high-performance applications on L2
• Projects targeting non-crypto native users have huge opportunities.
• Perpetual DEX, liquidity staking, and other segmented tracks perform well

Games and Entertainment

• Improvement of game project quality and team professionalism
• The UGC field is worth paying attention to, and decentralization can solve some issues.
• Game UA projects focus on establishing user profiles.
• Game distribution platforms need to rely on core products to attract users.

User/Fan Interaction

• Primarily involves entertainment, sports events, and the film and television industry
• The form of IP cooperation affects operational effectiveness
• Platforms with their own community foundation are more likely to succeed.

Institutional Services

• Including trading/brokerage services, asset management, banking/payment, etc.
• Expected to maintain stable growth, compliance construction becomes a key focus
• The market share of PB service companies is expected to increase.
• The impact of ETF applications on the market landscape
• Europe and emerging markets have growth potential

Bitcoin Ecosystem

• A different approach than Ethereum is needed for development.
• Focus on Taproot Assets, Rollup, Lightning Network, etc.
• New technologies like Statechain are worth tracking.
• The differences in Layer2 projects mainly lie in the choice of technology stack.
• Client verification technologies such as RGB and Taproot Assets are worth paying attention to.
• The Lightning Network has new development plans.
• BRC20 assets need to pay attention to infrastructure and technological risks.
• The application of DLC technology may become widespread, but centralization risks should be noted.

DePIN

• Easy to gain volume in a bull market, attracts much attention
• Key elements: decentralized mechanism, timing, industry fundamentals
• Revolutionary changes may occur in toC scenarios and underdeveloped markets.
• Hardware improvements require careful evaluation
• There is uncertainty in the direction of specific mining machines, which requires detailed analysis.