After Token2049: The Crypto Industry's Structure is Refined, with a Structural Shift in Narratives

The Token2049 event has concluded, and global crypto practitioners are gradually leaving Singapore. Through the intensive discussions and exchanges during this time, new thoughts have emerged regarding the narrative of the new cycle.

The overall architecture of the crypto industry has been further improved this year:

1. Omnichain remains the most关注 direction of Layer0.

Omnichain, as the most attractive narrative of Layer 0, defines the ultra-light node model for full-chain interoperability and introduces the new standard of Omnichain Fungible Token (OFT). OFT provides a more user-friendly and efficient solution for cross-chain transfers, including the v2 version that supports non-EVM chains. Additionally, the OFNT721 and OFNT1155 standards also support Omnichain NFTs.

Currently, multiple projects have adopted the OFT standard, such as Ethereum layer2 Metis, Multichain stablecoin MIM, and the CDP protocol TapiocaDAO.

2. Layer1 is no longer the focus of market attention

During this cycle, the market has shown differing opinions on Layer 1 projects. The Move-based new public chain has attracted some attention, but new public chains in other directions, whether focusing on DeFi, NFTs, or supporting multiple programming languages, seem to have not gained widespread consensus.

Many people no longer believe that a new public chain can emerge that surpasses Ethereum. Even if they think Ethereum may not be the ultimate solution, they are reluctant to invest too many resources in new Layer 1 directions.

3. The Layer2 landscape is becoming stable, and supporting middleware is gradually improving.

In the Layer 2 space, Optimistic Rollup is primarily dominated by Optimism and Arbitrum, while the first tier of ZK Rollup/zkEVM includes StarkNet, zkSync, Polygon, Scroll, and Taiko.

The supporting middleware for ZK Rollup/zkVM is already in place, mainly including:

• Sequencer: The industry is widely calling for a decentralized Sequencer network, with representative projects such as Espresso system, Astria, etc.
• Prover: Includes Nil Foundation, which focuses on Layer2 ZK Proof, Axiom, which is application-oriented, and Risczero, which balances both.
• Hardware accelerators: such as Ingonyama, which is equipped with GPU, FPGA, and ASIC acceleration, and Cysic, which launched SolarMSM.

4. Cash Cow Projects Emerge in the Middleware Sector

After ETH2.0, LSD (Liquid Staking Derivatives) has become the second largest "cash cow" business after Bitcoin PoW mining. Under Ethereum's PoS mechanism, the annual output value of Staking is approximately 680,000 ETH (over 1 billion USD). Representative projects include Lido, which has the highest market share, and Alluvial, which targets B-end users.

The MEV (Miner Extractable Value) track has also begun to preview future profit distribution mechanisms before the implementation of Danksharding. Currently, a more reasonable approach is to return MEV earnings to users' wallets, DEXs, or other dapps.

5. LSDFi and RWA emerge as new layer application opportunities

ETH Staking yields have become the "government bond yields" of Crypto, and LSDFi further enhances the yield for ETH holders. Currently, the annualized yield for Ethereum PoS is approximately 3.6%, similar to government bond yields in traditional finance.

LSDFi has led to more applications, such as Lybra Finance's "auto-yield stablecoin" eUSD, and interest rate swap protocol Pendle. At the same time, the higher yield on US Treasury bonds has also driven the development of RWA (Real World Assets).

6. Lowering the User Experience Threshold Becomes a Fundamental Requirement

With the goal of Mass Adoption, lowering the user experience threshold has become a fundamental demand. Intent Centric has become a hot topic, with representative projects like Bob the Solver and dappOS aiming to solve the problems of "protocols being hard to use, and even harder to combine" or "maximizing user benefits."

As one of the practical applications of Web3+AI, TGBot enables on-chain transactions, monitoring, and other functions through simple commands, helping to lower the user experience threshold.

7. The Combination of Crypto and AI Becomes a New Trend

Token2049 showcased numerous projects combining Crypto and AI, with main directions including:

• On-chain interaction automation: represented by TGBots such as Unibot.
• To Empower AI Business: Such as the labeling company in the medical field, Public.ai.
• Web3 version of ChatGPT: Like the on-chain data natural language search engine Lasso.
• ZKML: Zero-knowledge proof of the ML model inference steps explored by Modulus Labs.

As an important hub connecting the East and West in the Web3 industry, the Token2049 event in Singapore attracted over 10,000 participants. At the exhibition, public chains, Layer 2 projects, exchanges, and payment solution companies occupied the main booths, while leading Infra projects and VCs held more Side Events.

Despite the changing market environment, the industry continues to move forward and innovate. Building and developing remains the main theme of the Crypto industry.