Variant Joint Creation: Beyond Speculation and Stablecoins, Where Will Crypto's Next Phase Go?
TechFlow Selected TechFlow Selected
Variant Joint Creation: Beyond Speculation and Stablecoins, Where Will Crypto's Next Phase Go?
Break through bottlenecks, embrace transformation.
Navigating Web3 tides with focused insightsAuthor: Jesse Walden
Translation: TechFlow
Over the past two years, the crypto industry has gone through what I call a "consolidation phase"—a period where the focus shifted more toward optimizing existing technologies rather than achieving zero-to-one innovation.
This consolidation and optimization are primarily reflected in three key areas of the crypto industry:
-
Infrastructure: Refinement and optimization of underlying technologies.
-
Use Cases: Clarifying and deepening core existing applications.
-
Long-term Winners: Emergence of projects and technologies with sustained competitiveness.
Infrastructure Optimization: On the Path to 2024
Crypto infrastructure has matured significantly through continuous optimization and is no longer a primary bottleneck for industry growth. This maturity stems from incremental improvements rather than radical architectural overhauls. These enhancements lay the foundation for the potential next "bull market," during which:
-
Blockspace capacity across blockchains is abundant, capable of supporting higher transaction volumes.
-
Development tooling has become more robust, offering better support for developers.
-
User transaction fees are approaching zero or even fully subsidized.
-
Wallet complexity has been effectively reduced, lowering the barrier to entry.
-
User experience for on-chain applications now rivals that of traditional Web2 apps.
In reality, this wave of infrastructure abstraction, performance gains, and reliability improvements has only advanced over the past 12–18 months. For example, Ethereum L2s (Ethereum’s Layer 2 scaling solutions), improved reliability of the Solana network, and wallet abstraction technologies have only recently reached production-grade maturity.
Consolidation of Use Cases and Long-Term Winners: Trends for 2024
Currently, two core use cases have matured: speculation and stablecoins.
These use cases have existed since the inception of crypto. Bitcoin, launched in 2009, was the first speculative asset in the space. Stablecoins were among the earliest successful token applications—USDT, for instance, was launched in 2014. Now, both domains are entering their golden era, closely tied to infrastructure improvements.
For example, memecoins—the purest form of speculation—can now be created and traded at extremely low cost and with minimal friction. Similarly, issuing and transacting stablecoins has become far easier thanks to technological advancements. Tools like Bridge dramatically simplify the process of launching and managing stablecoins, making these operations efficient and accessible.
Beyond speculation and stablecoins, another consolidation trend is emerging: the “long-term winners” that have performed strongly in recent cycles are continuing to expand their lead and achieve even greater success. These include blockchains (such as Solana and Ethereum), wallets (like Phantom), and decentralized exchanges (DEXs) (such as Uniswap and Raydium). They benefit not only from rapid growth in stablecoin and speculative markets but also quickly adapt to trending speculative narratives—whether memecoins or NFTs.
The Next Phase of Crypto: Breaking Bottlenecks, Embracing Transformation
As infrastructure bottlenecks fade into history, two major constraints remain—and these are precisely what caused the consolidation-optimization phase and have hindered zero-to-one innovation.
The first is the challenging and uncertain regulatory environment. However, this may be changing. The U.S. could be moving toward establishing a clear regulatory framework for crypto—a development that would create fertile ground for high-quality projects while weeding out bad actors.
High-performance infrastructure and clear regulation are two critical enablers of industry transformation. Together, they can help overcome the final—and most important—bottleneck: talent.
Since 2022, the influx of new talent into crypto has dropped sharply. This isn't surprising: negative public sentiment and risks faced by founders operating under regulatory uncertainty have deterred many. Yet, the lack of fresh talent directly limits the generation of novel ideas within the industry.
I believe this trend will reverse next year as conditions improve, unfolding in two phases:
-
Long-term winners that excelled during the consolidation phase will continue expanding their advantages and achieving outsized success. For example, Polymarket stood out during this election cycle, and similar cases will emerge increasingly in the future. This trend will be driven by the mainstream adoption of on-chain technology—at both consumer and institutional levels. Startups will go public in waves, and more projects will launch tokens. These developments will reshape perceptions of crypto’s impact and inspire a new generation of builders to join the space, injecting fresh energy.
-
A new cohort of entrepreneurs will enter crypto. Grounded in first principles, they won’t be constrained by legacy infrastructure or outdated paradigms. Under clear regulatory rules, experimentation around new product experiences centered on “user ownership” will become feasible. This will spark a new wave of innovation.
While price volatility in crypto markets will persist, with new rules, new talent, and new ideas emerging, we may finally determine within the next five years whether the industry can move beyond speculation and stablecoins to deliver deeper, lasting value. We also hope that “user ownership” becomes central to new products and networks—aligning economic incentives with users to drive faster growth. Successful validation of breakout applications will be key to reducing long-term market volatility. I’m personally excited to witness this evolution; I believe the coming years represent a critical window for crypto’s development.
I shared these thoughts with Variant’s investors at our annual meeting on Tuesday. But I should add one caveat: my biggest concern is that before the industry transitions from consolidation-optimization to zero-to-one innovation, we might experience another rapid boom-bust price cycle. If so, it could delay innovation—but even then, I still believe the next five years will be a pivotal window for crypto’s future.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Variant
