10 Predictions for 2024: DePIN Market Size Could Grow 10-Fold, Bitcoin Layer2 to Develop Rapidly
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10 Predictions for 2024: DePIN Market Size Could Grow 10-Fold, Bitcoin Layer2 to Develop Rapidly
The beginning of spring falls on February 4. From this day onward, the twenty-year "Jiu Zi Li Huo" period officially commences, which is a long-term positive for Crypto.
Navigating Web3 tides with focused insightsLooking back at 2023, the total market capitalization of crypto rebounded to $1.7 trillion, an annual growth of over 110%, signaling that the cryptocurrency industry has emerged from its cyclical winter.
In this year, the crypto industry witnessed several notable developments:
1. Binance reached a settlement with U.S. regulators, making compliance for crypto firms an increasingly mainstream trend;
2. The Bitcoin ecosystem led a new paradigm of Fair Launch via inscriptions, made feasible primarily by the Taproot upgrade;
3. Ethereum’s LSD/LSDFi defined “risk-free yield” in the crypto industry, positioning ETH staking returns similarly to “crypto treasury yields”;
4. Layer2 networks gradually absorbed Ethereum’s DApps; currently, Layer2 TVL has reached nearly $20B, approaching Ethereum’s $29B;
5. Solana returned as a hot topic, with its DePIN and meme projects once again attracting market attention;
6. RWA yields became the cornerstone of profitability for DeFi lending protocols—MakerDAO, the most profitable DeFi protocol, derived 58.1% of its revenues from RWAs (mainly U.S. Treasury Bills).
2024 is the Year of the Wood Dragon (Jia Chen), with Lichun (Start of Spring) falling on February 4. From this day forward, the 20-year Liuzi Fire Element era officially begins, creating long-term favorable conditions for crypto.
IOBC Capital believes that 2024 may see the following 10 major trends:
1. Spot Bitcoin ETF approval could bring over $30B in incremental capital
The listing of spot Bitcoin ETFs will not only open access to potential investors across major stock exchanges like Nasdaq, NYSE, and CBOE but also facilitate broader institutional participation. Considering the current scale of existing Bitcoin-related products in the market, it is conservatively estimated that spot Bitcoin ETFs could attract over $30B in new capital.
2. The total market cap of Bitcoin inscription assets could exceed $20B, with only truly Fair-Launched top-tier MEMEs achieving medium- to long-term consensus
Fair Launch has historically been the core driver during the early stages of every crypto bull run. Within the Bitcoin ecosystem, inscription assets are categorized under various issuance protocols such as Ordinals, Atomicals, Runes, PIPE, and Taproot Assets—without delving into their technical differences or trade-offs, from a meme coin perspective, only those top-tier MEMEs with genuine Fair Launch mechanics are likely to build lasting community consensus.
3. Bitcoin Layer2 will experience rapid development, benefiting infrastructure projects within the Bitcoin ecosystem
Following the widespread market attention on ordinal NFTs and BRC20 tokens, many Bitcoin Layer2 projects secured funding in the second half of 2023—some adopting client-side validation methods, which may be more Bitcoin-native; others using rollup architectures, potentially accelerating development thanks to lessons learned from years of Ethereum rollup evolution.
The advancement of Bitcoin and its Layer2 ecosystems benefits foundational infrastructure projects, such as wallets like Xverse, and Bitcoin Layer2 solutions like Lightec, along with its zkBridge and WrapBTC offerings.
4. Ethereum Layer2 TVL will surpass Ethereum Layer1, possibly reaching over $100B
Ethereum Layer1’s TVL is primarily driven by LST (Liquid Staking Token) protocols. To date, over 28.6 million ETH have been staked. Thanks to liquid staking protocols like Lido (stETH) and Alluvial (LsETH), the liquidity of staked ETH has been restored, enabling new use cases such as perpetual contracts collateralized with LSTs and re-staking, significantly improving ETH capital efficiency.
As various Layer2 projects launch their mainnets, dApps are increasingly migrating from Ethereum Layer1 to Layer2 networks offering lower gas fees and faster speeds. In 2024, Layer2 TVL is expected to exceed that of Layer1.
5. ZK Rollup TVL will still lag behind Optimistic Rollups, but modular zk-based components for Ethereum Layer2 will mature
ZK Rollups and their supporting components are becoming increasingly specialized. Over the past one to two years, numerous projects have emerged focusing on specific verticals within ZK technology, including ZK co-processors, proof marketplaces/ZKProver (e.g., Risczero), zkDevOps, hardware accelerators (e.g., Ingonyama), and zkOracles (e.g., Hyper Oracle).
This trend toward modular integration of zk-based components helps lower the barrier for developers building zkDApps while offering greater flexibility.
6. LayerZero will launch its token in the first half of 2024, potentially igniting the Omnichain sector
LayerZero already supports 54 blockchains, with over 96 million cross-chain messages processed and more than 35,000 omnichain applications built on its network.
According to LayerZero’s official Twitter account, the project plans to launch its token in the first half of 2024, which could spark significant market momentum for the omnichain space.
7. The Parallel EVM narrative will drive secondary growth for chains like Sei v2
Parallel EVM is a method to make blockchain networks faster and more efficient by simultaneously executing multiple non-conflicting transactions.
Several projects are now exploring Parallel EVM. For example, Sei Network’s v2 upgrade introduces a major enhancement through Parallel EVM, adding a new component to support EVM smart contracts that can interact with existing CosmWasm contracts. The Sei v2 chain will optimistically execute all transactions in parallel; when conflicts arise (i.e., interfering transactions), the blockchain tracks each transaction's accessed storage locations—transactions touching different storage parts will be rerun in parallel, while those affecting the same state will be rerun sequentially.
Beyond Sei v2, other projects like Neon EVM and Nomad are also leveraging Parallel EVM to boost performance. Since EVM remains the most popular environment for DApps, these chains benefit from a rich ecosystem of developer tools and infrastructure.
8. The DePIN market size could grow tenfold
DePIN is essential infrastructure for realizing true Web3, serving as the security backbone for Web3 and crypto projects’ network resilience.
According to Depinscan data, the current market cap of the DePIN sector stands at approximately $62 billion, indicating substantial room for growth. Notably, Solana hosts several high-profile DePIN projects such as Helium, Render Network, Hivemapper, Shadow, and Media.
9. A breakout Autonomous World / Fully on-chain game with strong social features may emerge
Fully on-chain games store FT/NFT assets, game states, and logic execution entirely on-chain, featuring decentralization, community governance, permissionless access, and composability. Compared to traditional or partially on-chain games, they offer two key advantages: players' assets are permanently secure, and game mechanics are transparent and verifiable.
Lightweight yet highly social and engaging fully on-chain games could see a mini boom, potentially gaining traction through viral social dynamics and gambling-like elements.
10. Star examples of AI and crypto convergence across multiple application scenarios will emerge
The fusion of the most advanced productive forces (AI) with the fairest mode of production (crypto) will jointly shape new ways of human life in the future.
In 2024, two key areas of convergence between AI and crypto may emerge:
Using Bitcoin as payment currency in AI systems could become a fundamental rule in the future AI world. AI agents/bots could be set up to automatically perform various tasks and access resources, using crypto infrastructure and BTC for automated payments.
Adopting ZKML (Zero-Knowledge Machine Learning) for sensitive data training and model evaluation. Leveraging zero-knowledge proofs can protect privacy in AI models/inputs and ensure verifiability of inference processes, guaranteeing correctness in machine learning outputs. This enables smart contracts to securely orchestrate AI models, unlocking broader application logic and exploratory use cases.
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