Outlier Ventures: Challenges and Opportunities in the Crypto Industry in 2024
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Outlier Ventures: Challenges and Opportunities in the Crypto Industry in 2024
Opportunities in 2024 lie in the Bitcoin ecosystem, RAW, DePIN, gaming, and related fields.
Navigating Web3 tides with focused insightsCompilation: 0xjs@Jinse Finance
Recently, crypto VC Outlier Ventures released a report reviewing the development of the crypto industry in 2023 and outlining the challenges and opportunities for 2024.
Jinse Finance's 0xjs summarizes the key points of the report as follows:
2023 Review
Builder market: In the world of startups, despite high market sentiment at Outlier Ventures and overall higher application quality compared to previous years, we still observed a surge in builders.
The sleeping giant (BTC) awakens: Bitcoin builders were among the developers driving last year’s surge in activity, and this year the veteran blockchain further moved into the spotlight. "People figured out how to create recursive inscriptions—a way for inscriptions to communicate and reference each other—which unlocked a wide range of use cases," said KARIM HLABI from Outlier Ventures' token design team.
DeFi: Growing steadily with continuous infrastructure upgrades.
NFT projects lean toward IP: Although it was a less optimistic year for NFTs, brands continue experimenting with Web3 activations and methods linking digital signatures to physical products.
Regulation, regulation, regulation: Regulatory initiatives aimed at cracking down on bad actors and strengthening oversight have undoubtedly been a catalyst for change in Web3 this year.
Challenges in 2024
1. User Experience
As Web3 and blockchain technology continue spreading across industries, certain challenges remain. While progress has been made in many areas, we expect that addressing these issues will remain a focus through 2024—paving the way for the next billion users to join and adopt the technology.
2. Infrastructure
Even if crypto applications overcome user experience and public awareness barriers, infrastructure and middleware may still struggle to handle massive user influxes due to scalability and security issues.
3. Regulation: Regulatory challenges will persist into 2024.
Opportunities in 2024
Clearer Regulation
While much work remains, we also see this as an opportunity. In 2023, significant changes occurred in cryptocurrency regulations, but regulators are far from finished. Looking ahead, Outlier Ventures believes that increased transparency by legislators is key to nurturing healthy decentralized markets.
Unlocking Bitcoin
We believe 2024 will be a perfect storm of composability, scalability, and innovation. The composability of Ordinals and smart contracts provides project founders with tools to leverage Bitcoin’s network effects.
Real-World Assets (RWA)
Storing digital representations (tokens) of RWAs on blockchains has the potential to fundamentally transform the benefits and ownership associated with everyday assets.
Decentralized Physical Infrastructure Networks (DePIN)
Core physical infrastructure supporting networks will also undergo decentralization over the coming year. As demand for storage and processing power grows and costs decline, opportunities across multiple verticals will emerge.
Centralized Exchanges Launching Layer 2s
In 2023, centralized exchanges such as Kraken, OKX, and Coinbase launched Layer 2 networks. Outlier predicts this trend of centralized exchanges launching Layer 2s will continue.
Mobile-First Applications
Outlier sees significant potential in user-friendly, mobile-first applications serving as onboarding engines for new crypto users.
Gaming
In the previous cycle, we saw many challenges in crypto gaming. GameFi represents the convergence of blockchain technology and gaming.
AI
Undoubtedly, AI has become a major force across all industries this year. There is a natural synergy between blockchain technology and artificial intelligence, as at their core, both deal with the same primary asset—data.
"AI is a theme we've been watching for years, particularly in addressing deepfakes and enhancing content authenticity. Ultimately, we envision a state of Web3 where blockchain technology acts as a trust machine (infrastructure), while AI delivers personalized, meaningful, and immersive Web3 experiences for users," said Jamie Burke, Founder and Chairman of Outlier Ventures.
Brands Entering Web3
How brands can leverage Web3 to elevate their businesses has been a key topic over the past year—and one we believe will continue into 2024.
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