The crypto market experienced a resurgence in 2024, driven by positive macroeconomic developments, including the introduction of Bitcoin and Ethereum ETFs, increased adoption of stablecoins, easing monetary policies, and indications of forthcoming deregulation in the United States. Simultaneously, infrastructure improvements significantly enhanced the user experience, with lower fees and faster transaction speeds across multiple blockchains as well as account abstraction, which allowed users to access the benefits of Web3 without the traditional complexities.
This momentum is poised to carry into 2025, as infrastructure advancements draw attention to decentralized applications (dApps). Here are the key trends and predictions to watch:
DAOs (Decentralized Autonomous Organizations) have always held promise, but often faltered due to coordination challenges, lack of structure, and ineffective reward mechanisms.
AI is set to transform DAOs by:
Organizing members around a unified mission.
Streamlining human inputs into actionable and effective outputs towards the mission of the DAO.
Rewarding top contributors directly through AI, bypassing disorganized human committees.
Enhancing decision-making and resource allocation efficiency.
Data DAOs - AI models require high-quality training data, and humans possess that data. Contributors can share niche datasets and earn rewards, creating a mutually beneficial relationship between AI models and data providers.
Projects to watch: Vana, r/data dao, Volora, MindDAO, DataPig, SixGPT, VanaTensor
Decentralized Science (DeSci) - As public trust in traditional healthcare systems continues to wane and interest in wellness and longevity grows, DeSci is gaining momentum. By fostering open collaboration, contributors can freely share knowledge while receiving appropriate recognition and compensation for their scientific research.
Projects to watch: Pump.science, Bio Protocol, Stadium Science, Research Hub
AI is rapidly advancing across new mediums, with blockchain enabling collaborative and transparent development. This enables humans to collaboratively shape AI tools while allowing AI agents to operate as autonomous organizations, independently managing funds and digital assets.
Key verticals to watch include:
Personal Agents: Smart, autonomous agents will perform tasks for users or organizations, manage wallets, and interact with other agents in the digital world. As humans focus on their physical lives, these AI-driven agents will seamlessly handle their digital interactions, bridging the physical and digital worlds.
VTubers: AI is revolutionizing virtual characters, turning them into the next generation of social media stars. AI-powered VTubers will become fully autonomous in content creation, driven by fan preferences, while independently owning and managing their assets. Blockchain will enable more personalized and interactive engagement with their fan base as well.
Metaverse and Gaming: AI will revitalize gaming and the metaverse through democratizing content creation, leading to richer experiences and more personalized interactions. AI NPCs will bring life to digital experiences, replacing barren environments with dynamic and engaging interactions. Players will have the ability to program their own AI NPCs, allowing these characters to function autonomously within the metaverse, even when their creators are offline.
Projects to watch: Wayfinder by Parallel, Virtuals, Eliza by ai16z, ASM by Futureverse
Recently, countless new blockchains have launched, many of which remain isolated—contradicting the core principle of interoperability that defines this space. Users shouldn't have to worry about which chains dApps are built on. They should be able to move assets freely and transition seamlessly between different applications. While infrastructure has improved to abstract blockchain complexities, addressing this fragmentation issue will likely become a key focus in the coming year.
Thanks to account abstraction and ongoing infrastructure advancements, blockspace is becoming commoditized, making users less aware of the underlying chains that power applications. For dApps, liquidity and distribution are the primary drivers of growth, enabling broader user reach. Several companies are developing tools for cross-chain connectivity, allowing users to seamlessly move liquidity across blockchains and enabling dApps to launch on multiple chains simultaneously.
Projects to watch: Avail, Axelar, Hyperlane, Caldera’s Metalayer, Li.fi, Across, Layerzero, Puffer, Fabriq, Optimism’s Superchain, ZKSync’s Elastic Chain
dApps face a significant distribution challenge, struggling to reach a broad audience of new users. Leveraging existing distribution channels, prioritizing mobile-first experiences, and evolving wallets into powerful distribution platforms can provide effective solutions to this problem.
Relying on popular distribution channels
As mobile apps become the primary touchpoints for users, platforms like Telegram and Line are emerging as crucial distribution channels for Web3 adoption. I anticipate continued growth in Telegram's TON ecosystem and Line's Kaia ecosystem, particularly as more engaging dApps are launched. Blockchain features will increasingly be integrated into these ecosystems—and potentially others—seamlessly, offering the benefits of web3 to a huge existing user base.
Other platforms like Discord, which already host vibrant Web3 communities, could also play a significant role. With Discord’s recent launch of its Activities platform, which allows users to publish apps directly within Discord, introducing an embedded wallet seems like a natural next step. New platforms like Warpcast and Lens are worth watching too.
Projects to watch: TON, Kaia, Discord, Farcaster, Lens
Mobile-first experiences
Account abstraction with the help of Privy, Coinbase Smart Wallet, Thirdweb and others has allowed mobile dApps to gain traction this past year. As a result platforms like Polymarket, Warpcast, Blackbird and Zora were able to release dApps with seamless user experiences.
Handheld devices specifically designed for Web3 use cases will play a significant role in the distribution of mobile-first experiences. Several devices are expected to launch or ship new models in 2025.
Projects to watch: dGEN1, SuiPlay, Solana Mobile, Jambo, Shaga
Wallets
The number of wallets in the market has steadily increased. Wallets offer a powerful avenue for distribution, as they provide a comprehensive record of a user's actions and owned assets. They are also inherently sticky, as transferring assets to a new wallet can be challenging. It is logical to anticipate that wallets will evolve into distribution channels for dApps, recommending experiences to users based on their transaction history and preferences.
I expect wallets to start launching their own dApp stores in the upcoming year, complete with integrated marketing channels.
Projects to watch: Coinbase Wallet, Magic Eden Wallet, Phantom, Uniswap Wallet, Blast
The digital world is rife with misinformation, scammers, and bots. To create a Web3 economy founded on trust, the data we consume must be accurate, and the people we interact with must be genuine. Zero-Knowledge (ZK) technology offers a solution for verifying the validity of information and identities while preserving privacy.
Web3 has a data problem. There isn’t enough existing data to effectively understand what experiences users desire, identify potential long-term participants, or determine how to appropriately reward the right users for the right actions.
This challenge is particularly evident in farming campaigns, where users are incentivized with tokens for specific actions within a limited timeframe. While these campaigns drive short-term engagement, they often fail to attract and retain the right user base for sustained growth. Tokens have significant potential to boost engagement, but the key lies in identifying high-value users who align with a project’s long-term goals.
Leveraging Web2 data to analyze a user’s existing digital footprint could offer valuable insights, enabling Web3 projects to better understand their audience, design more meaningful experiences, and implement targeted reward systems that drive sustainable growth.
To achieve this, accurate Web2 data must be bridged into the Web3 space, enabling users to bring their digital footprints into the Web3 economy.
Projects to watch: Vlayer, Camp, Opacity, ZKPass
AI agents, deepfakes, and bots are proliferating across the digital world, eroding trust in what is real and what is not. Distinguishing human users from artificial ones is increasingly challenging. While transparency is a foundational principle of crypto, it is not always necessary—particularly when it comes to protecting private information. ZK technology offers a critical solution, enabling the onboarding of genuine users while preserving their privacy. This allows users to fully experience the benefits of Web3, interact confidently with other humans, and consume accurate information.
ZK technology empowers users to control and own their data, giving them the ability to construct their social graphs and share it selectively for their benefit. Privacy-preserving identity solutions are becoming essential for building social footprints while maintaining control over personal information.
Furthermore, ZK identity protocols are well-positioned to provide the secure and accurate data required to enhance trust in digital interactions. These tools also enable users to verify whether the people they interact with are human (“proof of humanity”) and whether the information they consume is trustworthy. This is particularly critical as the distinction between humans and non-humans becomes increasingly blurred, and third parties seek assurance that their users are authentic.
Projects to watch: Worldcoin, Privado, Sundial, ZKpassport
The coming year will focus on further refinement of infrastructure and adoption of dApps. By solving distribution challenges, enhancing interoperability, and leveraging ZK technology, Web3 is poised for mainstream breakthroughs in 2025.
TJ
