Top 12 Crypto Narratives To Trend 2024

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This article previews the recent Pink Brains’ report discussing the top 12 crypto narratives to trend as we move into the new year.

2023 has brought renewed enthusiasm to the crypto industry. Although it’s premature to confirm a bull market’s comeback, the outlook is more optimistic than in recent times. After examining recent trends and events, the Pink Brains team has compiled a summary of essential narratives and metrics to watch in the upcoming months. Here are the major crypto trends to watch as we move into the new year.

Top 12 Crypto Narratives to Trend in 2024

  1. Ethereum Layer 2
  2. Rollup Middleware
  3. Interoperability
  4. Parallelized EVM
  5. Modular Blockchains and Data Availability
  6. Decentralized AI and Machine Learning
  7. Bitcoin Ecosystem
  8. DePIN (Decentralized Physical Infrastructure Networks)
  9. Decentralized Social
  10. DVT (Distributed Validators Technology)
  11. Ethereum Restaking
  12. GameFi

1. Ethereum Layer 2

Ethereum Layer 2-Pink Brains
Top Ethereum Layer 2 Blockchains by TVL. Source: Pink Brains

Layer 2 scaling solutions, particularly rollups, are increasingly favored for boosting the efficiency of blockchain networks. These rollups operate by keeping transaction data on the main blockchain but transferring the bulk of transaction processing to a secondary chain. This setup maintains a seamless link between the two, thanks to their interoperable design. Within the world of rollups, two major types stand out: Optimistic Rollups and ZK-Rollups. Both are geared towards enhancing the transaction capacity of Ethereum, but they do so differently.

Looking ahead to the first quarter of 2024, the upcoming Cancun (Dencun) Fork might further influence the L2 landscape, potentially reducing transaction fees for L2s that settle on Ethereum. The notable layer 2 solutions that will surge in activity in 2024 include Arbitrum ($ARB), Optimism ($OP), Metis ($METIS), Base, Manta ($MANTA), Linea and more.

2. Rollup Middleware

RaaS-Pink Brains
Roll-up As-a-service Projects.

Rollup provides a standalone execution environment with high TPS, low gas, and access to all assets from Layer 1, which helps applications on the blockchain scale from DeFi to more general fields like games and social networks.

In 2024, we expect rollup will gradually become a sort of service provided to Web3 applications, i.e., Rollup as a Service (Raas). Ethereum’s rollup-centric roadmap and StarkNet’s Layer 3 architecture both demonstrate an application-specific multi-rollup future. Some projects are now heading in this direction.

  • Altlayer is a decentralized protocol that facilitates the launch of native and restaked rollups with both optimistic and zk rollup stacks.
  • Gelato Network provides fully-serviced L2 rollups natively integrated with tools like oracles, bridges, data indexers and Account Abstraction
  • Espresso Systems supports rollups with decentralization, scale, and interoperability.

3. Interoperability

Layer Zero Ecosystem - Pink brains
LayerZero Ecosystem. Source: LayerZero Space

In 2024, the crypto world is expected to emphasize blockchain interoperability, striving for a more interconnected ecosystem. The spotlight will be on cross-chain solutions and interoperability protocols, essential for enabling smooth communication and asset transfers across various blockchain networks. Projects dedicated to linking different blockchains are set to become more prominent, driving cooperation and creative advancements throughout the decentralized environment.

One of the hyped projects that has been out for over a year is LayerZero and they’re well known as an omnichain solution. There are many other cross-chain bridges around, especially Stargate ($STG), Hashflow ($HFT), and Wormhole. Interoperability and omnichain could be one of the possible narratives next year.

4. Parallelized EVM

Parallelized EVM-Pink brains

Parallelized EVM (Ethereum Virtual Machine) represents a significant advancement in blockchain technology, primarily focusing on enhancing the scalability and efficiency of Ethereum-based networks.

Traditional EVM processes transactions sequentially, which can lead to bottlenecks and reduced throughput. In contrast, a parallelized EVM introduces the capability to process multiple transactions simultaneously. This parallel processing dramatically increases the number of transactions that can be handled at any given time, thereby boosting the overall performance and scalability of the network.

While blockchains like Solana, Aptos, and Sui already boast some parallelization, developers have struggled to implement them on the EVM. The main technical hurdle has been finding a way to allow for parallelization within the EVM while avoiding conflicting transactions.

Sei Network (SEI), NEON EVM ($NEON), and Monad are key examples of technologies utilizing Parallel EVM to enhance blockchain efficiency.

4. Modular Blockchains and Data Availability

Modular blockchain-Pink Brains-1
Modular blockchain Landscape. Source: Messari

Modular blockchain architecture is an innovative approach that separates and optimizes different aspects of blockchain functionality. In response to the constraints of traditional monolithic architecture, including slower innovation, scalability constraints, and a lack of dev flexibility at the app layer, modular design is a broad approach that segments a blockchain into distinct, interchangeable components.

The concept of modularizing blockchains represents a significant step forward in scaling cryptocurrency technology beyond its current limitations. By allowing each layer to be specifically optimized for different applications, whether it be gaming, DeFi, or other verticals, modular blockchains can offer more tailored and efficient solutions.

Today, prominent modular ecosystems exist within the Ethereum ecosystem such as Manta and Celestia ($TIA) ecosystem.

6. Decentralized AI and Machine Learning

AI technology is revolutionizing our world, with 2023 marking a significant leap in its integration into daily life. The rise of ChatGPT and Bard fueled a surge in AI token investments, highlighting the sector’s growing appeal in a bear market.

Despite its potential, the AI sector’s market cap is just $6 billion, a figure expected to grow as AI and web3 integrations increase. This positions the AI sector as a promising area for future growth.

Key AI projects to watch:

  • Bittensor ($TAO): A $1.7 billion decentralized network connecting machine learning models globally, akin to a collective brain.
  • Render ($RNDR) project merges AI, blockchain, and graphics rendering, offering a decentralized GPU rendering network.
  • SingularityNet ($AGIX) is a decentralized AI services marketplace, utilizing blockchain for secure transactions.
  • Ocean Protocol ($OCEAN) performs a decentralized data exchange platform, that integrates AI for data services.
  • Autonolas ($OLAS): Valued at $319 million, it offers off-chain services like automation and co-owned AI, merging crypto with AI.

Other notable AI tokens include PAAL AI ($PAAL), OctaSpace ($OCTA), and Akash Network ($AKT), each bringing unique contributions to the AI landscape.

7. Bitcoin Ecosystem

2023 marked a significant year for Bitcoin, witnessing a flurry of activity and advancements in the investment realm. In the world of crypto, the introduction of the Ordinals protocol stood out, paving the way for novel concepts like inscriptions, popularly referred to as “Bitcoin NFTs” to rise in prominence. Meanwhile, in the sphere of traditional finance, the growing anticipation of potential spot bitcoin ETF approvals in the U.S. has captured the attention of conventional institutional investors, drawing them towards the cryptocurrency ecosystem.

Considering these recent developments, BTC has surpassed numerous major assets and indices in performance, encompassing both traditional and cryptocurrency sectors. By December 5, 2023, BTC’s market capitalization had experienced a remarkable 162% increase compared to the previous year.

Bitcoin ecosystem to watch in 2024 includes several notable events and milestones. It is yet another development that shows that we are in an important period of Bitcoin’s history as we move into 2024.

Top potential projects in the Bitcoin ecosystem include:

  • Stacks ecosystem is growing rapidly, with a wide range of projects and applications currently in development. Its official website features over 88 projects including DeFi, NFT, DEX and many more.
  • Babylon Chain allows BTC to be used for staking in Proof-of-Stake blockchains, increasing their security without the need for inflationary native token rewards while giving yield on native BTC.
  • Sovryn is the first non-custodial smart contract application on Rootstock for lending, borrowing, and margin trading with Bitcoin. The protocol provides a range of DeFi services that enable BTC holders to earn yields on their assets.
  • Rootstock is a sidechain running on the Bitcoin network that is designed to execute smart contracts using Solidity for Ethereum.

8. DePIN (Decentralized Physical Infrastructure Networks)

Decentralized Physical Infrastructure Networks (DePIN) is the name for blockchain networks that use tokens to incentivize communities to build physical infrastructure networks (think mobility, electric vehicle charging, telecoms etc.) from the ground up. DePIN projects, aim to address some of the world’s most critical challenges by utilizing blockchain technology, token incentives, and the power of the Internet.

Messari recently reported that the total addressable market of the DePIN sector is approximately $2.2 trillion, with projections to reach around $3.5 trillion by 2028. This figure is nearly three times the current market capitalization of all cryptocurrencies. The fully diluted value (FDV) of all decentralized physical infrastructure projects is currently about $5 billion.

Key DePIN projects to highlight:

  • Filecoin ($FIL) and Storj ($STORJ) provide infrastructure for decentralized data storage and distributed cloud object storage.
  • Helium ($HNT) is a decentralized blockchain network for IoT devices. Helium rewards users with HNT tokens via wireless hotspots.
  • IoTeX ($IOTX) is the platform for DePIN builders. It combines fast, secure blockchain technology with the Internet of Things (IoT) and smart devices.
  • Render ($RDNR) is a top provider of decentralized GPU-based rendering solutions that connect users needing to render jobs with idle GPU owners for processing.

9. Decentralized Social

SocialFi-Landscape

“Decentralized Social” is the next narrative in our focus. The issues stemming from the centralization of social media, such as censorship and flawed monetization models, are well-known. On the other hand, the emergence of SocialFi, a blend of DeFi and social media known as “Social Finance,” has been a long-anticipated aspect of blockchain applications’ social potential. In 2023, there was a noticeable uptick in this subsector, driven by innovative products, with friend.tech especially catching the attention of many.

In 2024, the evolution of social interactions on Web3 will be significantly influenced by SocialFi’s ability to gain more traction. The potential of Web3 social apps was highlighted by the attention received by friend.tech, especially from influencers not typically associated with the crypto space.

Several projects in this domain have created much attention, each demonstrating considerable growth potential. Top SocialFi protocols including Farcaster, Lens Protocol, and CyberConnect are shaping the future of social media in the Web3 era.

10. DVT (Distributed Validators Technology)

Ethereum is on a roadmap to become the global computer, aiming to bring its capabilities in DeFi, NFTs, and more to the mainstream. To realize this vision in 2024 and beyond, the network must have a robust foundation that ensures user protection and fund safety against attacks. As the network scales, eliminating single points of failure becomes vital, especially when trillions of dollars could be at stake.

Therefore, distributing validator keys is a key strategy in Ethereum’s roadmap to reduce risks and strengthen the network’s security infrastructure. Distributed Validator Technology (DVT) is a novel mechanic designed to decentralize node management on Ethereum.

With thoughtful implementation, DVT could fortify the blockchain and ensure that ETH remains decentralized as it continues to grow. Many projects are providing leading DVT services in the industry, such as SSV Network, Obol Labs, diva and Origin Protocol.

11. Ethereum Restaking

Recently, the crypto community has been abuzz with the rapid growth and potential of liquid restaking tokens (LRTs), following a significant move by Eigenlayer. This protocol offers Ethereum holders a new way to utilize their assets, different from traditional liquid staking methods like Lido. The approach allows for more strategic use of staked ETH, expanding its potential beyond standard practices.

Here’s a snapshot of the evolving landscape:

  • Eigenlayer’s Restaking Pool Expansion: Eigenlayer recently increased their restaking pool for Liquid Staking Tokens (LSTs), reaching its cap at an unprecedented pace. A remarkable total of 639.035 ETH was restaked, valuing over $1.1 billion USD. This figure marks a more than fivefold increase from the initial $250 million.
  • The Rise of LRTs: LRTs are emerging as the next big narrative in the crypto space, following the trend of restaking. They represent an advanced form of LSTs, essentially acting as liquid ETH tokens. What sets LRTs apart is their ability to generate additional yield over the standard ETH staking returns.
  • Advanced Features and Higher Yields: LRTs not only offer the usual benefits of liquid staking but also come with enhanced features. These include protections against slashing and the potential for higher yields compared to traditional restaking methods.
  • Dual Airdrop Potential: One of the most enticing aspects of LRTs is the possibility of dual airdrops. Investors who deposit funds into LRT projects stand to gain from both the Eigenlayer Airdrop and an additional airdrop specific to the LRT protocol they invest in.

Given these developments, several protocols are swiftly launching their own LRTs to cater to the growing demand in this dynamic sector.

Top Restaking protocols to watch for are EigenLayer, Restake Finance DAO ($RSTK), Kelp DAO and ether.fi

12. Web3 Games

Last but not least, what is a glorious crypto bull run without the explosion of Web3 games. The GameFi sector is poised for significant growth in the coming years, leveraging Web3 infrastructure to revolutionize how value is distributed in gaming ecosystems. This shift holds immense potential, especially considering the gaming industry’s vast user base of over 2 billion worldwide. Gamers’ familiarity with technology makes them prime candidates for transitioning into Web3, potentially bringing over 600 million users into the blockchain sphere.

Despite the bear market, projects have shown impressive resilience, attracting users with their lucrative economic models. Top Web3 games demonstrating resilience and innovation include:

  • Nakamoto Games ($NAKA): it offers 300+ P2E games and aims to be a primary income source for gamers. Its future looks bright with a robust roadmap.
  • Shrapnel ($SHRAP): this is the first AAA blockchain FPS, aspiring to be a leading franchise with enhanced content creation and monetization tools.
  • Big Time ($BIGTIME) is a multiplayer RPG that’s sold over $100 million in NFTs and is known for its engaging gameplay and rewards.
  • Star Atlas ($ATLAS), this Metaverse combines real-time graphics and DeFi, rewarding players with ATLAS tokens for in-game achievements.
  • Stepn ($GMT) and Gas Hero Official: is a strategic and socially-oriented web3 game developed by Satoshi Lab from the creator of Stepn.

These projects are at the forefront of merging gaming with blockchain, offering both entertainment and economic opportunities.

Conclusions

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The blockchain industry is poised for a transformative leap in 2024, driven by several key developments. These include the progression of ETH staking, the introduction of new blockchain networks, and the anticipated Bitcoin halving event. Additionally, the potential U.S. approval of a spot Bitcoin ETF underscores the industry’s movement toward greater maturity and diversity.

Technological advancements in both Layer 1 and Layer 2 solutions, along with innovative platforms like EigenLayer, are paving the way for broader adoption and integration with the traditional financial sector. For investors, enthusiasts, and developers, staying informed and adaptable in this rapidly changing environment is crucial.

The year 2024 promises to be a milestone in the blockchain space, offering a wealth of advancements and opportunities in a dynamic and ever-evolving landscape. The future of blockchain looks exceptionally promising.

Dive into the Web3 Bible 🧠

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Disclaimer: This article serves informational purposes only and does not constitute financial advice. Conduct your own research before making investmendecisions.