Hashed 2024 Outlook: Explosion of Bitcoin Ecosystem Infrastructure, Ongoing Integration of AI and Blockchain
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Hashed 2024 Outlook: Explosion of Bitcoin Ecosystem Infrastructure, Ongoing Integration of AI and Blockchain
Hashed believes blockchain will play a key role in reshaping the creator economy and intellectual property.
Navigating Web3 tides with focused insightsAuthor: Hashed
Translation: TechFlow
Summary
2023 was a year of resilience. Hashed continued to work closely with developers to drive mass adoption of blockchain technology. This year, Hashed invested in 26 early-stage industry teams globally.
As a team, Hashed has built relationships with global industry leaders and reflected on specific Web3 areas that excite them heading into 2024.
Hashed’s 2024 investment themes focus on sectors they believe will have the greatest impact. In this article, Hashed will explore nine key areas within blockchain.
They believe blockchain will play a pivotal role in reshaping creator economies and intellectual property (IP). Their focus will also expand to Ordinals and BRC-20 tokens, signaling Bitcoin's network expansion potential. Additionally, Hashed will explore the intersection of economic activity and capital markets in blockchain gaming, followed by a deep dive into next-generation finance—including real-world assets (RWA) and security token offerings (STO). They anticipate the industry maturing through permissioned DeFi, serving as a critical bridge for regulatory adoption.
Hashed sees synergies between artificial intelligence and blockchain poised to unlock new advancements. They are excited by developments in Layer 2 solutions, particularly as some ecosystems adopt application-specific rollups to enhance scalability. The article concludes with a look at crypto-denominated euros for global financial markets and the untapped potential of advertising as a tradable asset.
Blockchain Will Reshape Creator Economies and Intellectual Property
Friction in creative processes—such as developing IP derivatives like webcomics, games, and films, including AI-generated content (AIGC)—has long persisted due to the defensive stance major media and entertainment conglomerates take toward open IP infrastructure.
Open, on-chain, and traceable/verifiable IP infrastructure and studios will serve as foundational layers enabling creators and all stakeholders involved in content creation and consumption to fully engage with and own IP. This restores direct connections between creators and consumers—a relationship weakened during the broadcast era.
As a technology, blockchain will bring about a paradigm shift in media and entertainment, enabling more transparent and equitable management of IP rights, royalties, and revenue sharing among all participants. The goal is to create a multiplier effect on creativity across diverse producers—from cartoonists, celebrities, athletes, and film directors to animation studios, production houses, and talent agencies—helping grow stronger, more impactful IPs (the next Pokémon or Hello Kitty).
To accelerate this transformation, infrastructure for IP attribution/provenance or open IP standards must be established to flexibly implement licensing and royalty schemes that account for AIGC complexities. Building further upon IP provenance, fan-driven blacklisted IP crowdfunding platforms, fan-generated IP ETFs (e.g., webcomic ETFs), or betting on the next chapter of an anime series could become examples of capital markets built atop interconnected on-chain IP. Naturally, individuals or companies with high-brand-identity IPs can drive this movement faster.
Examples: Creative Commons, Token-Bound NFT Licenses, Pudgy Penguins, Yuga Labs
Ordinals and BRC-20: Reimagining the Bitcoin Ecosystem
While much of the crypto community focuses on the upcoming spot Bitcoin ETFs, a wave of innovation is unfolding on the Bitcoin network—largely overlooked by institutions and retail investors. We view Ordinals and BRC-20 technologies as paradigm shifts within the Bitcoin ecosystem, showcasing the long-term sustainability of what many consider the most dominant, widely adopted, and secure blockchain.
Ordinals allow various types of data to be inscribed onto the smallest unit of Bitcoin—satoshis (sats)—effectively turning them into NFTs on the Bitcoin network. Shortly after, the BRC-20 standard emerged: a set of instructions that, when used with Ordinals, enables users to deploy, mint, and transfer these inscriptions as fungible digital tokens on Bitcoin. This gained significant popularity in the second half of 2023, increasing Bitcoin’s block size and doubling average transactions per block. As a result, average transaction fees surged approximately 20-fold from early October levels, reaching $37 per transaction.
Existing infrastructure remains nascent, lacking accessibility, developer tools, and sophisticated tracking systems. Current token protocols lack support for third-party extensions and smart contract compatibility, and BRC-20 modules still require detailed onboarding guides. 2024 will be the pivotal year for the industry to overcome these hurdles and achieve widespread adoption of Ordinals and BRC-20 standards.
We are excited about projects expanding the Bitcoin ecosystem. We foresee this space unfolding similarly to Ethereum’s DeFi boom in 2020. Ecosystem infrastructure—including lending markets, decentralized exchanges, bridges, aggregators, portfolio management tools, developer toolkits, and tracking infrastructure—is emerging. Combine this with one of crypto’s strongest, oldest, and most dedicated communities, along with increasingly sophisticated and active on-chain participants from recent years. Startups or protocols building tools for secure and flexible Bitcoin programming, independent indexing infrastructure, wallets, aggregation systems—or even native Bitcoin metaverses or NFT marketplaces—could make significant impacts in 2024.
Examples: Bounce Auction, Darewise, Multibit, Ordinals, Ordiswap, Tap Protocol, Trac, UniSat, Xverse
Economic Activity and Capital Markets Flourishing in Blockchain Gaming
Gaming has always been one of the most engaging domains, with over 3 billion users globally participating in economic activities across all media. As blockchain gaming strives to meet the standards of traditional games and AAA studios like Nexon and CCP, it continues to attract massive user bases. Moreover, user experience has improved meaningfully—from smart contract wallets to MPC solutions—enabling programmable accounts and enhanced security, delivering smoother experiences for users, gamers, and studios alike.
As the blockchain industry matures toward mainstream adoption via blockchain gaming infrastructure and user onboarding channels, we anticipate real-time economic activity occurring across physical and virtual worlds using fungible and non-fungible tokens, digital identities, social graphs, UGC, and derivative content.
More specifically, just as DotA originated as a mod built on top of Warcraft 3 and eventually inspired League of Legends—with over 150 million active players—FOCG (Fully On-Chain Games) and AW (Autonomous Worlds) will leverage front-end and back-end composability, community governance, and security to create unprecedented and growing virtual economies. We explain below:
Frontend Composability: Modifying game clients with new UIs, art, sound, or music—or reimagining the entire experience by building new clients from scratch. Rewards for such contributions (e.g., fees paid to client developers) can be executed transparently and automatically via smart contracts, enabling automated and transparent revenue-sharing models.
Backend Composability: Every object within a game or world—including players—can be individually addressed on-chain by any smart contract. This means players can finally realize the original promise of smart contracts: forming automatically executable agreements between each other with full Turing-complete logic—what some call user-generated logic. The ability to form complex and powerful protocols will enable virtual societies to reach unprecedented political and economic complexity.
Community Governance: When an entire game or world exists on-chain, value can be captured automatically and transparently without relying on third-party marketplaces to enforce royalties. Communities have a voice in how value is captured—either opting out (i.e., forking or launching a new version) or voting within predefined on-chain governance systems. The ability to capture value and accumulate it into community-controlled on-chain treasuries acts as a powerful economic flywheel for virtual economies. Value captured from in-world economic activity can provide stable reserve backing for assets and fund community development and contributions, further fueling greater economic activity.
Security: Because FOCG dedicates substantial computational resources to validating every transaction, on-chain games and worlds will be secure. This enhances confidence in virtual economic flows.
Examples: Nexon MapleStory Universe, CCP Project Awakening, The Citadel, Dark Forest, MUD/Lattice, Halliday, ERC-6551, dfns
Next-Generation Finance: RWA and Security Tokens
The financial landscape is undergoing a transformation bridging traditional finance and blockchain technology. Centered around real-world assets (RWA) and security tokens (with offerings known as STOs), this shift involves off-chain assets being tokenized and integrated into blockchain ecosystems. It spans a wide range of tangible assets—including real estate, equities, bonds, and other valuable instruments—all made compatible through blockchain technology.
What makes this era particularly notable is the active participation of major traditional finance players such as JPMorgan, Goldman Sachs, KKR, and Hamilton Lane. These institutions are paving the way for bringing physical assets onto blockchains, signaling transformative changes ahead. Meanwhile, blockchain-native protocols like MakerDAO, Securitize, Chainlink, Maple Finance, Goldfinch, Ondo Finance, and Backed Finance are leading the digital transition, seamlessly adapting to RWA and STO use cases.
Within this context, two main categories emerge: infrastructure-focused and asset-focused. Infrastructure-centric projects are laying the foundation for this new financial ecosystem by creating protocols, security measures, and platforms supporting the future of RWA and STO. In contrast, asset-centric projects aim for deep vertical specialization in specific asset classes.
We are committed to balanced exploration of both categories. While we recognize the immense potential of asset-centric efforts, our relative emphasis leans toward infrastructure development. We believe building robust and secure infrastructure for tokenization and trading is the cornerstone of this financial revolution.
In the early stages of the RWA and STO revolution, we see significant growth potential in projects that skillfully navigate complex global regulatory environments while seamlessly integrating with existing Web2 services and establishing partnerships with major Web2 entities. Currently, the market primarily focuses on U.S. Treasury-related products and basic asset tokenization. However, we see considerable opportunity in projects exploring areas like derivatives tokenization and securitization, adopting broader strategies to embrace wider asset classes and financial products. Our evaluation will include regulatory aspects such as compliance, risk management, and due diligence, alongside operational factors like efficient on- and off-ramps, market accessibility, and scalability. These elements are crucial for bridging DeFi and traditional finance, laying the groundwork for a more integrated and resilient financial ecosystem.
Examples: MakerDAO, Securitize, Chainlink, Maple Finance, Goldfinch, Ondo Finance, Backed Finance
Permissioned DeFi Driving Regulated Institutional Adoption
During 2020–2021, centralized finance protocols rose in prominence, introducing cryptocurrencies as an accessible investment class. However, a series of events in 2022—driven by misconduct among several centralized actors—quickly tarnished the sector, triggering broad sell-offs and leveraged liquidations. This led to 2023 witnessing strong DeFi innovations such as shared-pool perpetual DEXs and peer-to-peer money markets.
We expect transformative developments in DeFi in 2024, particularly on the institutional front. Unlike fully decentralized protocols (e.g., GMX, Lido, Morpho), we see permissioned DeFi projects introducing controlled access models into their protocol designs, prioritizing regulatory compliance, privacy, and security.
The primary driver behind the rise of permissioned DeFi is the growing emphasis on regulatory compliance. As governments seek to bring crypto and blockchain operations under regulatory frameworks, permissioned DeFi platforms that prioritize compliance and structured institutional onboarding are well-positioned to benefit. One approach involves implementing KYC or KYB verification processes, supplemented by zero-knowledge technologies to protect customer privacy. Through these access controls, protocols can reduce risks of unauthorized transactions and potential vulnerabilities, increasing their appeal to institutional capital.
Institutional capital drives traditional financial markets, and we expect these flows to increasingly interact on-chain given the right infrastructure and protocols.
In lending, institutions are unlikely to utilize leverage if it sacrifices capital efficiency from over-collateralized assets. For mortgage-like products, appropriate credit rating infrastructure is needed to capture on-chain footprints, manage risk, and accurately predict asset prices. Institutions also emphasize downside protection and hedging capabilities, making insurance markets for pricing on-chain risks essential. Institutions holding existing crypto assets may seek yield-generating opportunities. If so, enterprise-grade platforms with permissioning features—such as verified validator sets or security-focused infrastructure providers—are expected to be especially attractive.
The permissioned DeFi model will likely be the first step toward regulatory adoption, allowing the industry to benefit from scale in a controlled and structured manner over time.
Examples: Alluvial Finance, Blueprint Finance, Centrifuge, Fortunafi, Fractal Protocol, Maple Finance
Convergence of AI and Blockchain
Outside the crypto space, AI dominated 2023. This presents a challenge to technologists and pioneers: how to maintain neutral and composable network infrastructures amid democratized progress.
Blockchain offers a promising path to mitigate challenges related to control and governance in powerful technological and economic systems. Through decentralized governance, enhanced transparency, and improved data privacy, blockchain can help create fairer, more responsible, and inclusive AI ecosystems.
The convergence of AI and blockchain represents a synergistic relationship with vast potential to reshape multiple industries. AI, with its ability to analyze large datasets and make intelligent predictions, can improve efficiency and decision-making within blockchain networks. Conversely, blockchain provides a decentralized and secure platform for storing and managing data, addressing key AI challenges such as data privacy and security. Together, these technologies form a powerful framework capable of transforming industries ranging from finance to healthcare.
Substantial progress in blockchain services powered by AI is evident in enhanced smart contracts. Smart contracts are self-executing agreements with terms directly written into code. AI can be integrated to analyze contract conditions and outcomes, making them more adaptive to changing environments. This dynamic integration ensures accurate contract execution and enables automation of complex decision-making processes within blockchain ecosystems.
Deep learning models like Midjourney and Stable Diffusion may evolve into protocols akin to a media version of ChatGPT, where original content and IP holders can stake their assets (NFTs, game items, photos, papers, iconic designs, etc.) to prove ownership and authenticity. A portion of generated revenue could then be distributed as loyalty rewards. This would alleviate IP ownership concerns arising from AI-generated content and open new markets for creators.
By 2024, more builders will leverage these technologies to empower decentralized, open-source networks with strong governance, fundamentally transforming how we produce and consume digital experiences. The seamless integration of blockchain and AI is not merely the sum of their individual strengths—it’s a multiplicative synergy highlighting the best features of each product. Products supported by incentive-aligned AI and sustainable protocol design will surpass existing Web2 applications.
Examples: Worldcoin, Lovo AI, Zettablock, Gensyn, Modulus Labs, Ritual.net
Leading Layer 2 Evolution Through Application-Specific Rollups (L3)
2023 was the year of Layer 2 scalability. With Arbitrum experiencing explosive growth and numerous projects building their own rollup solutions using the OP Stack, a variety of L2 solutions began to emerge. Viral launches of services like GMX and Friend.Tech signaled the broader adoption potential of L2s.
Application-specific rollups (L3s) leveraging their own high-performance CPUs for computation are expected to have a greater impact in 2024, building on this momentum. Vitalik Buterin’s rollup-centric roadmap from 2020 emphasized that Ethereum must solve scalability issues in both data and computation. Data scalability is expected to be gradually addressed through EIP-4844 and sharding. However, computational scalability is primarily solved by rollups. Layer 3s offer a practical solution by providing settlement and composability within rollups, relying on general-purpose layers for dispute resolution while maintaining the same security level as the base layer.
However, this comes with trade-offs. While L3s efficiently run applications at low cost and high performance, they sacrifice composability with apps on other rollups. Nevertheless, applications that benefit more from having their own ecosystem (e.g., dYdX, Ronin) and prefer operating in a more controlled environment are better suited for application-specific rollups. As we anticipate several well-funded, mass-adoption-targeted gaming and social applications launching in 2024, L3s will play a larger role in delivering high-quality services to large concurrent user bases—whether in games, social platforms hosting vast amounts of text, images, and video, or orderbook-based exchanges handling heavy trader traffic.
Which part of the infrastructure layer will benefit most? Likely projects managing validator computation and sequencing ordering layers, as well as those enhancing interoperability among different application-specific rollups. Additionally, products aiming to minimize miner extractable value (MEV) in app-specific rollups, privacy solutions curbing centralized validator nodes, and tools enabling rapid deployment of high-performance validators for app-specific rollups are expected to see significant advancements.
Examples: Radius, Cartesi, Espresso, Astria, Automata, AltLayer
Crypto-Backed Euros and Dollars for Global Financial Markets
The stablecoin ecosystem has grown into a massive market, valued at approximately $130 billion by the end of 2023, with Tether’s USDT accounting for around $90 billion. A key reason for USDT’s success is that it was the first stablecoin tailored for financial markets in the blockchain space. However, we believe that especially in 2024, stablecoins will undergo a major shift—evolving toward customized solutions designed for specific user groups and use cases. This shift will involve considerations such as onshore vs. offshore targeting, compliance levels, and underlying currency choices. Although federal-level stablecoin legislation in the U.S. remains unlikely next year, we expect continued attempts to disrupt existing dominant products.
Currently, the stablecoin market is dominated by dollar-backed options like USDT, USDC, and DAI. The U.S. dollar nearly monopolizes denomination in crypto-based financial markets. At the same time, people in countries needing strong monetary backing are turning to the most proven reserve currency—the U.S. dollar—rather than secondary or tertiary reserve currencies. Notably, Tether is now one of the largest buyers of U.S. Treasuries, ranking within the top 15 holders even when compared to national governments—highlighting the demand for dollars as a medium of exchange online or outside the U.S. without full regulatory oversight.
In 2024, we will continue to see innovative approaches unlocking the disruptive potential of dollar-denominated stablecoins (also known as crypto Eurodollars), with new entrants competing in a market currently dominated by USDT and USDC. During this process, specialized stablecoin issuers will emerge, offering tailored services for financial markets, B2B payments, C2C remittances—functions previously handled by single stablecoins. Simultaneously, user experience innovations will appear in consumer-facing domains, enabling more stablecoin-based services, including new banks, debit cards, and API tools that either compete with or integrate into existing fintech applications.
While stablecoin use cases diversify, the future applications of crypto euros/dollars will be characterized by disrupting the dominant players in traditional financial markets. Builders focused on stablecoin "money legos" in today’s fintech landscape hold immense potential to ultimately create a stablecoin-based financial market encompassing primary and secondary markets, derivatives, and foreign exchange.
Examples: Circle, First Digital, StraitsX, Mountain Protocol, REAP, BasedApp, Bleap
Blockchain’s Impact on the Digital Advertising Market
Blockchain technology holds the potential to revolutionize the advertising industry by addressing long-standing privacy and efficiency issues in traditional online advertising models. As a pillar of internet business, advertising has been criticized for monopolizing user data. However, the emergence of Web3—emphasizing sovereignty and privacy—ushers in a new paradigm.
In Web3 applications, reliance on server-side data storage or client-side cookies for user information becomes obsolete. Blockchain’s transparency—where all transaction data is stored and accessible—provides a powerful database for analyzing and identifying potential customers, significantly improving advertising efficiency. For advertisers, this means a more direct targeting process: wallet information shared across media platforms can deliver relevant ads to users, even as they browse across different platforms. This approach is particularly advantageous considering previous privacy regulations that limited ad effectiveness.
This shift toward Web3-based advertising models promises to break big tech’s monopoly in the ad market, paving the way for a more competitive and diverse media landscape. By minimizing intermediary fees, both media outlets and advertisers stand to gain significantly. Furthermore, the possibility of futures markets for ad slots and keywords—leveraging their fluctuating value over time—can introduce new dynamics into capital markets, offering opportunities to hedge against market volatility.
Additionally, user privacy remains paramount. Advanced cryptographic techniques under development will allow users to hide their transaction data, preserving their privacy while using these services. This balance between efficient advertising and privacy protection forms the cornerstone of blockchain-driven advertising’s future, delivering a more dynamic and equitable market for all stakeholders.
Examples: Brave Browser, Hypelab, Persona, Slise
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