By Michael Amar
Blockchain means many things to many people. To some it’s an immutable ledger of truth; to others a financial revolution. Whether you view blockchain as the foundation for digital freedom or merely a distributed database depends largely on what you’re using it for.
Whatever your reasons for placing data onchain, in 2024 you’ll be doing it a whole lot more – and yet speaking about it a whole lot less. As you’ll presently discover, this is a very good thing.
Less Talk, More Action
The internet came of age when we stopped calling it the world wide web. Once online was normalized, we ceased conjuring convoluted terms for it and began calling it the web. Then we spent so much time on it we had to devise convoluted terms for going outside, like “meat-space.” But what’s this got to do with blockchain?
Well, it too is an emerging – and by “emerging” read “exponentially growing” – technology, just as the web was at the close of the 90s. Five years ago, the word blockchain was being appended to projects with only a marginal connection to the technology. Today, blockchain is doing the heavy lifting for industries as diverse as supply chain and IoT and the focus has shifted from the underlying architecture to the benefits bestowed.
So what can we expect blockchain to bring next year in terms of supporting greater economies of scale, creator economies, and bringing liquidity to illiquid and fragmented markets?
DePIN Will Come of Age
Let’s start by getting the obligatory AI conversation out of the way. The rise of AGI will drive further confluence with its sister technology, blockchain. One of the greatest sectors of growth will be DePIN (Decentralized Physical Infrastructure Networks). Distributed computing networks have empirically failed to realize their potential but demand for GPU compute to fuel a new wave of AI startups will remedy that.
Expect to see existing DePIN such as Render and Filecoin being repurposed for AI/ML, aided by new arrivals such as io.net designed to underprice and outperform cloud providers. Heightened demand for GPU processing arrives at a time when PoW miners are seeking new opportunities for revenue maximization as the industry transitions to Proof of Stake. DePIN is a concept whose time has come.
RWA Will Hit Real Numbers
In 2023, the tokenization of real-world assets provided a proof of concept. The technology, running on blockchain rails, is being utilized to bring liquidity to markets such as fine art, real estate, and bonds. Dismissed by some as a use case in search of users, the success of RWAs this year, particularly from a technical and compliance perspective, has paved the way for a broader rollout in 2024.
If you consider the various markets that will be utilizing RWA, or tokenization of assets, you will find sensational figures: the Trade Finance market stands at around $9.3 trillion; only 1% of the $1.2 trillion current supply of diamonds worldwide is used for investment purposes - Hedera is the first to explore diamond accessibility to yield generation; the real estate market is a staggering $397 trillion and already going down the path of tokenization and the usage of smart contracts for deeds and ownership.
Expect to see investment banks, hedge funds, and asset managers placing serious value onchain and institutions to start claiming the yield offered by tokenized products such as Backed. Before RWA can become a trillion-dollar market, it needs to start posting billions. 2024 will be that year.
Rollups Will Be Rolled Out
In 2017, everyone wanted a token. In 2024, everyone will want their own layer2. Appchains will become commonplace, allowing GameFi, DeFi, and NFT projects to support high transaction volume within a low-fee environment. Meanwhile, the rollout of Rollups as a Service (RaaS) will give web2 companies access to blockchain infrastructure on demand.
While there’s a case for saying that not everyone needs a native blockchain, the ease with which L2s and L3s can be deployed will accelerate this trend. And with rollups tethered to a parent L1 such as Ethereum, liquidity and the EVM infrastructure that is the lifeblood of the on-chain ecosystem will never be more than a bridge away.
GameFi Will Come Good
Riding on the immense popularity of gaming with three billion users worldwide and expected to reach four by 2030, billions of dollars have been poured into web3 gaming over the last three years. Next year, those dollars will start manifesting in the form of blockchain-native games that are highly playable and immersive, supported by highly engaged communities and thriving in-game economies. Only 28% of all GameFi titles are currently live. Once the remainder are released into the wild, we’ll get a better idea of what blockchain gaming can bring to the party.
It remains to be seen whether GameFi can attract console gamers in their droves. What is clear is there’s a demand for player-centric games in which communities can shape the project’s direction, own their assets, and be rewarded for the time and effort they put in. Mobile web3 gaming in particular will take off thanks to the ease with which developers can provide tools such as seamless, almost invisible, wallet integration to enhance basic gameplay.
…And That’s Just for Starters
There’s so much more to look forward to in 2024 for those who work at the coal face of blockchain. Permissioned DeFi for institutions, now normalized, will become the norm for asset managers seeking attractive yield. Liquid staking especially will attract more institutional players who will view it as a “safe option” for parking ETH. DeFi protocols such as Maker and Aave will be revitalized as on-chain lending is used to drive greater capital efficiency.
Blockchain security will be enhanced through better tooling to monitor and mitigate threats. Infrastructure will be reinforced with a focus on weak links such as web2 hosting and validators. This in turn will bolster confidence in layer1 networks, leading to greater value being placed onchain. On the consumer side, meanwhile, NFTs will demonstrate they were never dead, just dormant, as the market cycle moves from cryptocurrencies to non-fungible tokens.
For those who operate outside the industry, it won’t be immediately apparent that blockchain is making inroads into everything and eating a slice of everyone’s breakfast. But thanks to the growth of DePIN, RWAs, and institutional DeFi, blockchain will be everywhere next year. On the markets and on-chain, 2024 is shaping up to be blockchain’s best year yet. Expect less hype and more solutions solving real-world problems. Watch this space.
About the author
Michael Amar is a seasoned executive with several years of experience in global alliances, business development, executive management, channel development and organizational leadership. Business expertise across the worldwide marketplace including US, France, Israel, and Japan. Possessing the ability to deliver success in both B2B and B2C.
Michael is a serial entrepreneur who founded 6 companies – in three different countries - and has successfully exited 4 to date. Michael raised over 30 million euros in his career with over 30 investors. Michael obtained several awards including the French American Business Gold Award, Mashable Awards Finalist, Web 2.0 Expo award, Etail award & IMC Awards. Over the years Michael closed deals with over 200 of Fortune 500 Companies (Walmart, Coca‐Cola, Samsung, McDonalds) and established strong partnerships with leading tech companies among which include Google, Apple, Amazon.
Michael is a co-founder of the Paris Blockchain Week Summit, the second largest international conference covering Blockchain and NFTverse, the largest European conference covering Web3.
Michael is an active investor and advisor for startups. He has invested in 10+ funds and startups across multiple geographies, and has been an Operating Partner at Cathay Innovation a global venture capital activity empowering digital entrepreneurs by providing them a platform bridging North America-Europe-China. Michael invests now exclusively in the Web3 and Al space, in seed and pre seed companies with amazing founders.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.