2024 Musings: 20 Predictions for the Crypto Market
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2024 Musings: 20 Predictions for the Crypto Market
Ethereum restaking will become one of the key narratives at some point this year.
Navigating Web3 tides with focused insightsBy Lanhu Notes
Predictions for 2024—pure speculation, full of biases, not investment advice, for entertainment only. Take it all with a grain of salt.
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L2 will remain one of the most important narratives in 2024. With the Dencun upgrade arriving, the significant reduction in L2 fees will trigger an explosion in the L2 ecosystem. Beyond gaming, perps, DeFi, and NFTs, areas such as social and DePIN on L2 will also enter their breakout phase.
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L2s like Arbitrum, Optimism, zkSync, Starknet, and Blast will compete across the board with other public chains. As EIP-4844 rolls out and data availability (DA) layers evolve, they will match high-performance blockchains in both cost and speed. The competition between Arbitrum and Solana ecosystems will be one of the key highlights of 2024.
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zkSync will launch its economic model in 2024, becoming a major driving force behind the L2 boom.
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If Starknet achieves a breakthrough, it will likely begin with the narrative of fully on-chain gaming.
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In 2024, one L2 project’s fully diluted market cap will surpass $100 billion; under optimistic conditions, during peak cycle times, one L2 could exceed $300 billion in fully diluted market cap. The final market landscape for L2s won’t be settled in 2024, but it will largely take shape after this cycle.
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The Bitcoin ecosystem has opened Pandora’s box through inscriptions, with many teams now exploring expansion paths—including decentralized indexing, evolution of inscription standards, decentralized cross-chain bridges, zk proofs, and L2 solutions. Once progress is made, not only will the native ecosystem grow, but integration with the Ethereum ecosystem will also accelerate. This exploration within the Bitcoin ecosystem is one of the most notable evolutions of this cycle.
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Ethereum L1 will gradually evolve into a B2B chain, where the vast majority of user interactions occur on L2/L3 or a few high-performance L1s. Ethereum will increasingly become the foundational asset layer of the crypto space. Meanwhile, as modular blockchains mature, Ethereum will emerge as the most critical settlement layer, outsourcing most execution layers and some DA layers. Ultimately, due to the need for base-layer security, ETH will continue to capture value from overall ecosystem growth.
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Same as last year’s prediction, modularity will remain a key narrative in 2024, especially intense competition in the DA layer. Ethereum restaking sectors will also enter the DA arena. In the modular space, Cosmos and Ethereum ecosystems will both compete and converge. There will be competition between third-party DA and native DA solutions. Before Danksharding is realized, urgent market demand from L2s ensures a certain scale of demand for third-party DA.
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Beyond Ethereum and BTC ecosystems, Cosmos and Solana ecosystems will continue to develop—consistent with predictions made at the beginning of last year. Cosmos will make progress via modularity; Solana will advance through specific applications. Additionally, as modular blockchain technology matures, one evolutionary path for Solana is to integrate more broadly into the wider crypto ecosystem—just like other L2s—with deeper convergence into Ethereum, thereby capturing greater value.
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Web3 gaming will break through on L2/L3 platforms (e.g., Arbitrum, Starknet), with at least one game reaching over a million users (not achieved in 2023, but 2024 seems ripe). Gaming chains based on Arbitrum will become the frontier for Web3 gaming breakthroughs. Magic will offer significant insights into Web3 gaming evolution in 2024 as it launches gaming chains and improves interoperability among more games.
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Beyond integrating NFT DEX, NFT lending, and Blast, Blur is expected to enter NFT perpetual markets—and possibly even expand into NFT markets on L2, BTC, and Solana ecosystems. Blur still has the potential in 2024 to remain one of the industry’s top disruptors.
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Beyond the surge of projects on L2, the Ethereum ecosystem is expected to undergo significant deflation, enabling strong value accrual. Unlike other L1 chains that rely on inflation plus fees paid to miners for security, Ethereum returns all newly issued tokens and transaction fees to stakers and holders, incentivizing more users to stake or restake—further locking up circulating ETH supply.
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Perpetuals in DeFi will see massive growth in 2024. Projects like SNX, GMX, GNS, and DYDX are likely to achieve trading volumes at least five times higher than in 2023. While perps may not dominate bull market narratives, they are likely one of the strongest fundamental sectors.
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Advancements in modular blockchains and cross-chain technologies will drive deeper integration between Ethereum, BTC, and Solana ecosystems. This cycle will bring forth many currently obscure projects. Based on current BTC ecosystem developments, one possible path is Ethereum serving as a Layer 2 for BTC. If this materializes, convergence between Bitcoin and Ethereum will steadily increase. Regardless, BTC’s scalability must follow its own native path—protocols like Atomicals, if they can build an AVM, would have a significant impact on BTC ecosystem development.
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DePIN will achieve some breakthroughs on Solana and Arbitrum. This sector remains in early development, with more experimental projects emerging.
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AI remains distant from real-world adoption, but it will still be one of the major narratives in 2024. AI protocols built on L2 and high-performance public chains will gradually appear.
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Ethereum restaking will become one of the key narratives at some point this year.
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NFTs, memes, and inscriptions will experience a revival at some point, boosting NFT DEX trading volume and laying the groundwork for the launch of NFT perps.
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Some celebrities will enter the NFT, meme, and inscription spaces.
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With the advancement of L2 and exploration of high-frequency applications, smart contract wallets have the opportunity to emerge prominently in 2024.
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Risk Warning: All analysis above reflects partial observations of technology and markets—it may not be correct. Please maintain independent judgment and practice sound risk management.
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