Four Pillars researchers from South Korea: 2025 investment opportunities and personal holdings

What assets do these Four Pillars researchers who are immersed in blockchain research all day long hold? What is the basis for their decisions?

Four Pillars is a Korean investment and research institution. The team has in-depth insights into market and industry development trends. Based on their own research and judgment, they have invested in many star projects such as INJ, SUI, Ethena, Virtuals, and Hyperliquid. This article is a research report that explains their investment logic and reasons for holding positions. Four Pillars members deeply express their views on future market development. I recommend everyone to read it.

Whenever we talk about our blockchain research, there are always people who ask: "What coins should I buy now?" "Which projects are worth investing in?" In fact, the responsibility of VC researchers is to analyze blockchain-related technologies and judge market trends, rather than to provide investment advice, so we are usually reluctant to answer such questions.

But the special thing about the Four Pillars research team is that we are both industry observers and deep participants in the crypto market, so instead of giving vague "investment advice", it is better to directly disclose our holding structure and explain the investment logic.

You may be curious: What assets do these Four Pillars researchers who are immersed in blockchain research all day long hold? What is the basis for their decisions? Before explaining each investment target in detail, we will use charts to visually present the team's overall holdings:

Observing the above figure, it is not difficult to find that the team's holdings show diversified distribution characteristics, covering multiple tracks and ecosystems. Next, we will analyze the investment logic of each researcher one by one, as well as their judgment on the future potential of these assets.

Steve: Ethereum's dominance is declining, focusing on products that have already been in the market

Smart contract platforms are no longer winners

Four Pillars was established in May 2023. At that time, there were a number of new public chains that were regarded as challengers to Ethereum. They collectively collapsed after the Terra collapse and the FTX incident. At that time, Ethereum firmly occupied the market dominance. But I was convinced at the time: In the next bull market, Ethereum's market share will definitely fall back to around 30%. There are three core logics:

First, the scale of users entering the market in the new cycle will be far greater than before;

Second, incremental users will inevitably bring diversified value orientations;

Third, Ethereum cannot meet the needs and preferences of all groups.

The Ethereum ecosystem puts the "decentralized concept" at the highest priority, which makes me notice its key contradiction - to achieve true "Mass adoption", it must be compatible with user groups that do not regard decentralization as the ultimate value.

Of course, the essence of blockchain technology requires "a certain degree of decentralization", but I think that not all scenarios require Ethereum-level decentralization. On the contrary, other value dimensions such as execution efficiency, compliance framework, user experience, etc. may have higher priority than decentralization. This diversity of value orientation will continue to stimulate market demand for other public chains besides Ethereum.

Subsequent market performance has verified my judgment: compared with 2023, the current market share of Ethereum has stabilized in the range of 20-30%. As of January 9, 2025, the market value of Ethereum is US$398.5 billion, and the total market value of the entire crypto market is US$1.35 trillion.

And I think the biggest problem of Ethereum ecosystem is not the technical level, but its arrogant attitude of "everything will eventually belong to Ethereum". To some extent, this runs counter to the decentralized concept they advocate. The open world that blockchain tries to build will never run according to the will of any particular group. Therefore, I think it is almost impossible for the smart contract platform field to form a winner-takes-all situation in the future.

Because anyone can create a new public chain, innovation may emerge at any time. As time goes by, more and more people will be familiar with blockchain technology, and the threshold for using new public chains will continue to decrease. Smart contract platforms are likely to maintain a fierce competition. Of course, this does not mean that we will return to the era of random chain issuance. In the future, the number of major public chains participating in the competition may decrease, but new frameworks and platforms will continue to emerge, and the existing head public chains will continue to improve their infrastructure.

Based on this judgment, new blockchain frameworks and technologies have always been my focus. My interest in Sui will continue until 2025, and it is at the forefront of the field of "new infrastructure technology". In addition, I believe that public chains like Solana and Injective, which build unique ecosystems based on their respective advantages, will eventually gain greater market attention - Solana is known for its strong community foundation and scalability comparable to Sui, while Injective is known for its extremely fast transactions, flexible business expansion capabilities and unique token economic model.

New opportunities in existing tracks

When asked "Which areas of the blockchain industry have achieved PMF", my answer is always the three cornerstones of exchanges, stablecoins and public chains. Before exploring unproven emerging market opportunities, deepening existing mature tracks and iterating technologies are also valuable directions.

Taking the stablecoin track as an example, its development space is far from reaching its peak. If you can build a differentiated model while avoiding risks that have appeared in history, such as the defects in Terra's model design, it is entirely possible to generate new market demand. The rise and fall of Terra has proved that in addition to USDT and USDC, there is indeed a real demand for Web3 native stablecoins in the market.

And this is exactly the core logic of my optimism about Ethena - it has built high returns through funding rates, and compared with USDT and USDC in the underlying architecture, it has formed an essential innovation. The breakthrough of Ethena lies in: in addition to the basic attraction of "high interest rates", it continues to expand the application scenarios of USDe, such as the integration of USDe with Bybit, which can be used as a collateral asset to trade perpetual contracts. This is a good example.

Although Ethena's funding rate may narrow in the bear market, the project has begun to develop derivatives such as USDtb to hedge market fluctuations, showing a mature risk management awareness.

Based on the above reasons, I pay close attention to the innovative practices of three types of tracks that have been verified by the market: exchanges, stablecoins, and public chains. Take Hyperliquid as an example (although I have not yet held a position), which has innovated the derivatives trading experience through the order book model, showing an innovative gene similar to Ethena. This type of "opening up a blue ocean in the red ocean track" project has always been my focus of observation.

What is a real community

"Community" may be one of the most abused words in the Web3 field. Almost all projects claim to be "serving the community", but in most cases, the community is just their "liquidity outlet" or "threshold for listing" - this hypocritical community narrative has now been seen through by most retail investors.

I am not denying the value of airdrops here. As a cold start tool, airdrops are indeed an effective means of building an initial community. But airdrops are just a means of starting. Only when users feel something beyond the price of the currency can the community truly survive. Blockchain is similar to a country in some ways, but lacks mandatory constraints, making it closer to religion.

In addition to economic incentives, the only thing that can bring people together spontaneously is an engaging narrative, which is why Ethereum and Solana have strong (even slightly fanatical) communities - they have experienced the collapse of the DAO attack and the FTX incident, but have risen from the ashes and formed a unique community narrative.

In the field of NFT, Azuki is one of the few projects that has built this kind of "narrative". Despite the amazing start, the Azuki team and founder Zagabond have gone through many tests in the past three years of operation. It is precisely because they overcame these challenges that they have built a solid community foundation today. It can be seen that a real community is not built by throwing money, and people need to gain a sense of belonging through "experiences of sharing weal and woe" in addition to economic incentives.

Based on this, I am optimistic about projects that have established communities of this nature, and I believe that projects with a solid community foundation will perform well in the industry. After all, the code can be forked, but the community cannot be copied.

Jay: Which projects will really drive Adpotion?

Virtual machines outside of EVM

2024 is a key turning point in the development of the non-EVM ecosystem. Taking Solana as an example, multiple DeFi projects and consumer applications under the SVM ecosystem, such as Pump.fun, Photon, Daos.fun, etc., have all shown performance comparable to or even surpassing the top projects in the Ethereum ecosystem. Especially in the field of stablecoin payments, Solana has successfully integrated mainstream companies such as Visa and Shopify, greatly improving the market's expectations for its mass adoption prospects.

In addition to Solana, Sui continues to grow its ecosystem with "Move on SUI" and achieves extremely low transaction latency by introducing breakthrough technological innovations. In addition, the release of the SuiPlay0X1 handheld designed specifically for Sui marks its explosive growth in the gaming ecosystem.

From a macro perspective, an obvious trend is that more and more ecosystems are gradually getting rid of the EVM framework, developing or integrating their own exclusive virtual machines, and building customized ecosystems. Although Ethereum, as the first smart contract platform, has indeed led the industry development and spawned many innovative ideas, I am optimistic that non-EVM public chains will surpass the Ethereum ecosystem. The fundamental reason is that EVM lacks a clear mission orientation and has many inherent defects.

At present, we are witnessing the rise of diverse virtual machines, and these innovations are breaking through the boundaries of the EVM ecosystem. Ultimately, the diversity and quality of applications will depend on the level of development of virtual machines. The key challenge is how to give full play to the advantages of each VM and build full-stack applications optimized for specific scenarios. Looking forward to 2025, non-EVM infrastructure and its combined innovation may usher in a broader development space to meet the evolving needs of the market.

Truly understand the RWA project with Web2 and Web3 synergy

What is the greatest value of blockchain? I think it is its ability to tokenize assets. Tokenization can make any asset liquid, which can bring many advantages, such as improving capital efficiency and accessibility, building fast infrastructure, realizing smart contract automation, and enhancing compliance and transparency. The Mass adoption problem that the crypto industry has long faced must also be fundamentally broken through in the tokenization mechanism.

However, despite numerous projects trying to tokenize various assets over the years, we have seen few successful cases. The root cause is that these projects have failed to build a convincing value transfer system and fail to demonstrate the advantages of tokenization. As traditional industries continue to gain interest in the crypto field, the most attention in the future will be those projects that can effectively implement tokenization.

Let's take Ondo Finance, a leader in the RWA field, as an example. Ondo not only tokenizes US Treasury products on the chain, but also achieves two major goals by building partnerships across the Web2 and Web3 ecosystems:

1) Ensure that assets are protected by institutional investors;

2) Maximize their utility through interaction with various protocols.

This strategy can create value for Web2 and Web3 investors. Deeply understanding the characteristics of the off-chain and on-chain fields, and using this as a basis to achieve organic expansion and collaborative innovation between the two, such projects will gain more and more attention in the coming years.

Projects that create real value for the community

The launch of Hyperliquid can be said to be revolutionary. In the absence of external financing, the team relied entirely on internal resources to develop and grow with the community. Despite circulating more than 30% of the tokens at the TGE, the project still broke through $10 billion in FDV in just one week. The subsequent surge in the price of the HYPE token triggered a heated response. This was like a protest against the traditional model of the industry, highlighting the importance of community-friendly projects.

So, what is a truly community-friendly project? In short, it is a project that can provide substantial value to the community. In my opinion, this value can be achieved in two major ways: economic benefits and cultural identity.

First, let’s look at the economic benefits level. Given the sensitivity of the Web3 ecosystem to incentive mechanisms, project parties have long explored various ways to maintain the community of token holders and encourage people to continue to participate. As I have discussed before, these economic incentives are traditionally achieved in two ways: one is to share the benefits directly with token holders, and the other is to increase the value of the native token indirectly through airdrops, buybacks, destruction, or DAO vaults.

However, some more sophisticated and community-oriented strategies have emerged recently. For example, more and more projects are opening investment opportunities to the public at low valuations in the early stages to establish mutually beneficial value with the community. Projects such as Legion and Echo are typical examples in this regard. Projects that use such strategies to carefully design community relationships often receive high attention at the start-up stage.

If economic incentives are an effective means of attracting users from the outside, then cultural identity is committed to cultivating users' sense of belonging, establishing and unifying community identity, a process similar to the cohesion of religious groups under common ideas, and an important driving force for maintaining development momentum, promoting innovation and grand plans.

To achieve this, project parties cannot just make up slogans and share emoticons, but also need to hold various large-scale, cross-regional activities to promote in-depth interaction among members. In addition, project parties should also create a suitable environment for community members to organize activities autonomously and strengthen their connections with each other. This proactive way of shaping the community will be more effective than non-spontaneous activities organized simply for a one-time airdrop, and will also help build a more lasting and cohesive community.

Heechang: DeFi is in long-term development

I am in the crypto field for long-term development, not for short-term gains in two or three years. I think DeFi is the core of the crypto world. Without DeFi, blockchain will always be limited to a niche group. Most people enter the crypto field to make money and get higher asset returns. This is the potential of DeFi, not to mention the diversified income methods such as self-custody.

All user behaviors in the crypto market are derived from the tendency to participate in finance, and this is why I pay attention to and hold the tokens of DeFi projects that are continuing to develop.

DeFi has a short history but has developed rapidly. Early AMMs gained momentum by enabling on-chain transactions, and then other primitives such as on-chain lending and perpetual contracts emerged. Each primitive has been tested with multiple mechanisms, especially in the field of on-chain transactions, where AMM-based and order book-based DEXs have explored different product directions.

Today, as DeFi ecological primitives such as spot DEX, perpetual contract DEX and lending protocols have achieved sustained and considerable trading volumes, they are moving towards a stage of further development and creating more value. This is why I pay attention to DeFi infrastructure.

The crypto field has the open and permissionless nature, and it is natural for projects to expand their infrastructure to capture more value. DeFi applications used to be just smart contracts, but that perception is changing. These DeFi applications are expanding their infrastructure to solve problems such as MEV and high gas fees. With the emergence of new tools such as Rollup frameworks, application-specific sorting (ASS), and interoperability frameworks, it is becoming easier to build new DeFi infrastructure.

Next, I will explore the evolution of the trend of DeFi expanding from smart contracts to underlying infrastructure, and what I think are more innovative DeFi projects.

DeFi's "Money Legos" are getting bigger (take Morpho, Ethena as examples)

"Money Legos" in the crypto field refers to the composability of DeFi. The term describes how different DeFi protocols can be combined to build more complex financial products. A typical example is LI.FI, a cross-chain transaction aggregator. LI.FI allows users to exchange tokens or perform cross-chain operations through more than 15 DEXs and more than 20 cross-chain bridges in one interface, which is a reflection of the openness of DeFi applications.

By mixing and matching different DeFi building blocks, DeFi protocols are able to create customized solutions that meet specific market needs and leverage the strengths of multiple platforms to solve problems. This is clearly reflected in the collaboration between Morpho (MORPHO), MakerDAO (MKR), Spark, and Ethena (ENA).

Morpho's infrastructure Morpho Blue and MetaMorpho serve as the underlying architecture that enables Spark to allocate liquidity from MakerDAO to obtain sUSDe returns in Ethena. This collaboration highlights the potential of DeFi composability to promote innovation in financial instruments that are difficult to achieve in traditional finance.

As mature DeFi protocols establish a good reputation and achieve more streamlined integration methods, inter-protocol composability will accelerate. Protocols like Morpho that provide customizable lending services, and protocols like Ethena that provide high stablecoin returns, will lead the wave of DeFi integration across protocols and DAOs.

DeFi infrastructure is developing at a high speed (Uniswap, Ethena, LayerZero as examples)

In 2022, Dan Elitzer published an article on the inevitability of "Unichain". He believes that the reason for this trend is the inefficiency and value loss in the existing DEX system. As stated in the article, Uniswap traders face three major costs: transaction fees paid to liquidity providers, gas fees paid to Ethereum validators, and MEV costs.

In 2024, Uniswap announced the launch of its own Unichain, which aims to solve problems related to execution quality, user experience and liquidity fragmentation, which enables Unichain to capture more value from its user base and increase application scenarios for UNI tokens. Not only Uniswap, other DeFi protocols have also announced the launch of their own dedicated infrastructure-Frax Finance's Fraxtal, Swell Protocol's Swellchain, Worldcoin's Worldchain, Zerion's Zero Network, etc.

The uniqueness of these facilities is that no entity can control their "value flow", and every participant can participate in building or expanding to maximize the capture of value. In the traditional business system, how value is captured by others and how much value can be captured through expansion are very vague, and there is little public information. However, it is different in the crypto field. The protocol is sovereign, and the market is driven only by supply and demand.

In this trend, I think Ethena and LayerZero are the two protocols that capture the most value. Ethena has grown from 0 to $6 billion in TVL in a year, becoming the most successful DeFi project in this cycle. They are preparing to launch their own infrastructure to increase the application scenarios of ENA tokens and build an ecosystem for their stablecoin USDe.

As Ethena's infrastructure implements token deployment through LayerZero's OFT (Omnichain Fungible Token) framework in the future, the protocol's revenue will grow further. In addition, DeFi protocols expand infrastructure by building their own Rollup or deploying to multiple public chains, where cross-chain security is crucial. In this scenario, LayerZero (ZRO) can provide the best experience.

The integration of DeFi and traditional finance is deepening (taking Ondo and Ethena as examples)

In the past, users in the crypto space were basically limited to anti-government figures and radical traders. However, as DeFi's advantages in asset management become increasingly apparent, traditional finance (TradFi) is gradually entering the crypto space. At present, two major traditional financial groups are slowly integrating into the DeFi ecosystem.

First, there are fintech companies, which have been promoting innovation at the traditional financial level within the regulatory scope. The rise of fintech is relatively late - before 2010, mainstream payment methods were limited to bank transfers and cash. The advent of mobile Internet has promoted the development of fintech, and companies such as Stripe, Robinhood and Revolut have emerged one after another, providing better services for payment, trading and asset management.

The DeFi protocol also aims to improve the financial system, but outside the regulatory boundaries. The experimental spirit of fintech companies has prompted them to get involved in the crypto space. More obvious examples include PayPal's stablecoin PYUSD launched in the Solana ecosystem, with a TVL of $500 million, and bridge.xyz, which Stripe acquired for $1.1 billion. In addition, Robinhood is also preparing to launch a stablecoin, and Revolut is also participating in DeFi activities. These events show that the integration of DeFi and financial technology is accelerating.

In addition to financial technology companies, traditional financial institutions such as BlackRock and JPMorgan Chase are also actively exploring the crypto ecosystem. Compared with Tether's revenue of US$5.2 billion in the first half of 2024, BlackRock's net profit in the same period was only US$3.126 billion. This comparison makes traditional institutions also hope to get a share of the crypto market.

It is worth noting that BlackRock has launched BUIDL, a stablecoin with treasury bonds as its source of income. Crypto native protocols such as OndoFinance (ONDO) are working closely with financial institutions within the regulatory framework, while protocols such as Ethena have been integrated with BUIDL to provide on-chain users with a wider range of treasury bond income channels. With the lowering of regulatory thresholds and the continued growth of the stablecoin market, the integration of DeFi and traditional finance will continue to accelerate.

JW: Adoption of consumer applications and application-centric ecological transformation

The rise of speculation as a product and consumer applications

2025 is expected to be a breakthrough year for consumer applications in the crypto field. Historically, crypto has followed a familiar evolutionary pattern: starting with early adopters, such as fund traders, and gradually expanding to a wider audience. We have witnessed this pattern in the development of Bitcoin, stablecoins, and DeFi. Now, the consumer application track has gradually become active in the public eye.

In order for the crypto field to no longer be just experienced traders competing with each other, the influence of the crypto field needs to be expanded to attract new users and capital to drive the growth of the ecosystem. This evolution is likely to be achieved through more concise applications that can take advantage of some of the unique advantages of crypto technology, including memes, SocialFi, NFTs, and Gamefi. I predict that these areas will regain market attention, but in a more mature and complex way than in previous cycles.

It is exciting that the industry is moving towards developing products that are easy for users to use. Whether through memes, NFTs, or AI-related applications, we are seeing a new wave of applications that effectively take advantage of the unique advantages of crypto technology and create a unique user experience.

The AI Agent and DeSci projects that began to gain attention in 2024 can be seen as classic examples of speculation evolving into unique tracks and use cases. Users who initially enter the space due to speculation often go on to explore a wider range of crypto use cases, such as DeFi, stablecoin payments, and prediction markets.

Current market conditions are particularly suitable for mainstream consumer adoption in crypto, as the user experience has improved significantly compared to before: wallets are more intuitive and seamless, mobile accessibility has improved significantly, and previous technical barriers around scalability have been largely resolved. These improvements have given the crypto market a user experience close to that of traditional financial services.

As market sentiment moves in a positive direction overall, we may see continued growth in user adoption. In addition, with the Trump administration's shift to more friendly crypto regulation, the United States may have a more favorable regulatory environment for crypto and catalyze positive regulatory evolution in the global market.

The rise and fall of AI Agents

After the emergence of $GOAT at the end of 2024, AI Agents have become the hottest track in the crypto space and are expected to reach a higher peak in 2025. As we have seen, new technologies are good at capturing the public imagination and spawning powerful memes. From the metaverse craze to modular blockchains to today's AI Agents, each wave represents extreme optimism driven by technological innovation and speculative frenzy. It should be made clear here that we are talking about AI Agents in the crypto space, not the traditional AI industry.

There is a key difference between AI Agents and previous tracks. Unlike fields such as DeFi and modular blockchain, which have successfully gained a foothold after their respective bubbles burst and entered the "enlightenment slope" stage based on actual utility and steadily gained adoption, today's AI Agents are more similar to the hype cycle of the metaverse, and both face the same problems: unclear use cases, unclear target users, and value propositions obscured by buzzwords.

Looking ahead, while AI Agents may continue to dominate market attention and achieve rapid price increases driven by technical narratives, the field also faces major risks. Without meaningful long-term growth momentum or specific use cases, AI Agents may only decline sharply and it will be difficult to recover. Whether investors in the AI Agent track can make a profit depends on whether they can cash in profits and exit before the bubble bursts.

Dynamic changes between chains and applications

In 2025, the crypto industry may experience a fundamental shift in the traditional relationship between chains and applications. Public chains have long been seen as the center of the ecosystem, but this notion is being challenged as the industry accelerates its transition to an application-driven paradigm. The traditional model of the crypto industry is top-down, with blockchains as the foundation for ecosystem development. Although the highly anticipated public chains will enter the public eye in 2025, including Monad, Bera, MegaETH, and Initia, this may be the last generation of general-purpose blockchains that can be successfully launched.

The future trend of blockchain development is shifting from general-purpose public chains to two distinct models: one is to expand mature applications into complete ecosystems like HyperLiquid and Ethena, and the other is to launch their own blockchains by successful protocols like Uniswap.

The industry's financing landscape is also evolving with this shift. Community-centric token distribution is becoming increasingly important, with MegaETH successfully reviving the ICO model and HyperLiquid and Pudgy Penguins also having successful large-scale airdrops. The focus of such projects has shifted from traditional VC financing to user adoption and community participation. In particular, mature applications can use their existing user base to generate liquidity and network effects when launching their own tokens or chains, reducing their reliance on traditional financing channels.

Ingeun: The blockchain infrastructure behind Bitcoin is ready to go

In the 2024 bull market, the price of Bitcoin rose more than 2.4 times from its previous low. Although factors such as Bitcoin's four-year halving cycle and Trump's re-election as US President have brought positive effects, I don't think this is the main driving force for Bitcoin's growth, but the gradual change in the public's perception of cryptocurrencies, the further development of the blockchain industry, and the improvement of the participation of traditional financial forces in the crypto ecosystem.

As a bellwether of the blockchain industry, the rise in Bitcoin's price will naturally drive the rise of other cryptocurrencies. However, precisely because Bitcoin is in a dominant position, capital is highly concentrated on Bitcoin, and capital redistribution in other areas of the crypto industry has not yet fully occurred. In past bull markets, Bitcoin's price increases were usually accompanied by a decline in its dominance as capital flowed into altcoins.

Although many people are still paying attention to Bitcoin's continued rise, capital is expected to be reallocated to other projects in 2025, such as Ethereum and other public chains, as well as L2. These projects have been quietly preparing under the light of Bitcoin, and with the influx of capital, they may shine this year. And my investment portfolio is just following this idea. Below I will explain my views on some excellent projects.

Critical Infrastructure Chains: Ethereum and Solana

Ethereum is facing considerable challenges in this bull market. Although Ethereum holders have high expectations for it and ambitiously announced the Beam chain and its future roadmap at the 2024 Devcon conference, Ethereum's development has been overshadowed by the continued progress of new public chains led by Solana. The comparison with the latter makes Ethereum quite difficult in 2024, which is fully reflected in its price performance.

Judging from the ETH/BTC price trend, Ethereum has been on a downward track recently. Although it still maintains its position as the second largest cryptocurrency, second only to Bitcoin, its momentum has obviously weakened. Despite this, I believe that Ethereum is about to rebound. Although many public chains are vying for the throne of Ethereum, Ethereum still has an overwhelming advantage in scale. Among its competitors, Solana is the most powerful opponent, but Ethereum's market value (as of January 14, 2025) is still more than 4 times that of Solana, and the assets locked in the Ethereum DeFi ecosystem are also more than seven times that of Solana.

In addition, Ethereum is the first crypto asset to be approved for an ETF after Bitcoin, making it easier for traditional financial institutions and institutional investors to participate. The inflow of funds through the Ethereum ETF has steadily increased, with net inflows reaching a record $2.08 billion in December 2024, more than double the $1 billion in November. Notably, BlackRock's ETHA fund received $1.4 billion in December, while Fidelity's FETH fund received $752 million.

Ethereum continues to strengthen its foundation both internally and externally. The previously unstable Layer2 ecosystem is now mature and functional, and Ethereum's emphasis on ZK has also grown steadily with the support of many projects. At the same time, Ethereum's Restaking service originated from the consensus system within its ecosystem, has a unique positioning, and is also constantly improving.

The lack of a fixed upper limit on the number of ETH is one of the biggest concerns of Ethereum investors, but this problem has been alleviated to a large extent. Since the London hard fork in August 2021, the issuance of Ethereum has decreased, and part of its current circulating supply is in a deflationary state, which has promoted the stability of ETH prices.

Is Ethereum in crisis at the beginning of 2025? My answer is yes. But crises often come with the best opportunities. Ethereum introduced the concept of a global computer that Bitcoin cannot achieve structurally, and continued to improve itself. In 2025, Ethereum will overcome its own crisis and prove its value as the ace public chain.

Ethereum's most powerful competitor Solana is actively catching up with the former in various fields of the blockchain ecosystem. Solana's ecosystem has grown to a considerable scale, unparalleled in public chains outside of Ethereum, and has a unique scale advantage.

Solana prioritizes performance and user-friendliness instead of emphasizing decentralization like Ethereum. Although this means that Solana's operating structure is slightly centralized, it is able to achieve a TPS of several thousand transactions per second, which provides Solana users with a nearly seamless environment without taking unnecessary risks.

In addition, Solana uses its large community of developers and users to stay at the forefront of technology and the market. In the early days of this bull market, Solana led the trend of Meme coins and surpassed other chains through faster cultural adoption. Recently, Solana has followed the AI trend by organizing events such as AI hackathons, demonstrating its ability to continue to lead new trends.

Unlike the narrative development of Ethereum, Solana has been reshaping the crypto space's view on decentralization. It raises a fundamental question: if the high degree of decentralization advocated by Ethereum ultimately has a negative impact on users, should decentralization be pursued at all costs?

With Ethereum as a powerful opponent above and various L1 chains below, Solana's next move is crucial. As it continues to forge its own unique path, I will continue to closely monitor how Solana develops in the crypto space.

Continued Growth of the Restaking Ecosystem

"Restaking allows users to reuse staked assets, providing additional economic security for multiple public chains or applications, allowing staked assets to be recycled, improving scalability and liquidity, while earning additional rewards."

As mentioned above, Restaking is a solution based on financial engineering. By reusing staked assets to improve scalability and liquidity, significant growth was achieved in 2024.

It is worth noting that EigenLayer, as a resttaking ecological facility, and platforms such as EtherFi, PufferFi, and Zircuit have attracted a lot of funds and promoted the expansion of the resttaking market.

If the keywords for resttaking in 2024 are "Restaking debut" and "Focus on Ethereum", then the keywords for 2025 may be "The emergence of more resttaking participants" and "The expansion of resttaking to other L1 chains".

Ethereum can be said to be the birthplace of resttaking, and competition among infrastructure providers such as EigenLayer, Symbiotic, and Karak is intensifying. Although Symbiotic and Karak are new entrants to Eigenlayer and currently manage fewer pledged assets than EigenLayer, they are actively carving out their own niche markets.

For example, Symbiotic supports the resttaking of multiple assets such as Ethena (ENA) to attract more deposits, while Karak makes itself more unique and competitive by supporting cross-chain asset staking (including Arbitrum, Mantle, and BSC).

Therefore, we may witness fierce competition among Restaking providers within the Ethereum ecosystem in 2025. At the same time, the Restaking narrative may expand to ecosystems outside of Ethereum and enter a new growth phase. Among them, BTC and Solana are key ecosystems for the expansion of the Restaking narrative.

Bitcoin uses its unparalleled total asset size to use Restaking as a means to generate additional profitability on other blockchains. Babylon is a project that uses Bitcoin staking and Restaking mechanisms to enhance the security of other PoS chains. Notably, Babylon allows BTC to be staked directly on the Bitcoin network without bridging or mapping encapsulation, providing higher usability and simplicity.

Solana's high transaction speed and low fees have promoted the development of numerous Restaking services, such as Jito and Solayer. As a well-known staking provider within the Solana ecosystem, Jito has expanded its expertise to the Restaking field, providing a stable and reliable Restaking solution based on its mature staking technology. Similarly, Solayer, inspired by EigenLayer, focuses on improving convenience while further promoting the development of the Solana ecosystem.

In 2025, competition within the Restaking track will intensify not only within Ethereum, but also in other L1 chains such as Bitcoin and Solana. Restaking will continue to evolve as a key innovation in the blockchain ecosystem.

Blockchain projects worth paying attention to in the new year

Many new projects emerged in 2024. In 2025, there will be a competition between those projects that laid a solid foundation in 2024 and those that emerged this year. From this perspective, we can focus on Ethena and Mantle.

Ethena stands out among US dollar stablecoins and has become one of the fastest growing projects. It has achieved significant growth in 2024 through a unique high-yield strategy, secure collateral management supported by BlackRock BUIDL, stability achieved by US Treasuries, and a comprehensive expansion plan for the Ethena network.

Ethena's US dollar stablecoin USDe stands out by providing users with clear returns through staking rewards, delta neutral market strategies, and liquid stablecoin returns. This has led to a large amount of funds flowing into USDe from other US dollar stablecoins such as USDT and USDC. As use cases continue to grow and fintech companies increasingly adopt stablecoins, their dominance in the market should continue. Based on such trends, the growth of Ethena and USDe should also continue in 2025.

Mantle expanded its influence in 2024 by launching Mainnet V2, offering staking rewards, and distributing airdrops of other tokens. These efforts have enabled Mantle to expand its user base and establish a strong presence. On the technical side, Mantle worked with Succinct to explore the transition from an Optimism rollup-based model to a ZK rollup. In addition, Mantle worked with Chainlink to integrate the Chainlink cross-chain interoperability protocol CCIP, laying the foundation for upgrading the Mantle ecosystem to a multi-chain ecosystem.

From an ecosystem perspective, Mantle solidified its partnership with Bybit, expanding Mantle's use cases and increasing its user base. In addition, Mantle's staking program allows users to earn MNT Power (MP) as rewards and can participate in other airdrops, thereby promoting active user participation. These measures have made Mantle's promotion in the market very effective, and I expect this momentum to continue until 2025.

Mantle has a close relationship with Bybit. Bybit is an exchange that is rapidly catching up with Binance, and Mantle's cooperation with Bybit has laid a good foundation for its further growth. The increase in the number of Mantle holders may bring more activity on the mainnet, forming a positive feedback loop that is beneficial to the entire Mantle ecosystem. Under this trend, 2025 is expected to be a year of significant expansion of the Mantle ecosystem.

Eren: New roles in the on-chain market and the development direction led by the AI Agent boom

Catalyst for the inflow of scattered funds: on-chain small-cap transactions

The inflow of on-chain liquidity to small and medium-sized assets is expected to accelerate further. Compared with large-cap assets listed on centralized exchanges, these assets will create more diversified opportunities, as high expected returns have become a key driver to attract retail investors to the crypto market. This model of issuing assets on the chain has already emerged in last year's memecoin cycle. The overvaluation of VC coins has led to the so-called "high FDV" phenomenon, and the expected return of VC coins has declined, and many people have turned their attention from VC coins on CEX to on-chain memecoin transactions.

In this context, perhaps the most impressive thing last year was the sharp rise in memecoin prices, such as Chillguy and Moodeng. Phantom wallet ranks among the top in app store downloads, which also shows that even users who have no previous on-chain experience are now actively using on-chain wallets and tools such as Moonshot to trade high-return-expectation, high-risk assets such as memecoin.

This scenario marks an important turning point in crypto adoption. Although we previously judged that attracting and carrying on-chain users through infrastructure development and new applications is the key, the unique speculation of the crypto market and its high return expectations can undoubtedly become a catalyst for promoting crypto adoption.

Therefore, the more obvious change in 2025 compared to before will be that on-chain small and medium-cap asset transactions will no longer be limited to old users, but will become a powerful catalyst for scattered capital inflows, and the resulting trend is worth paying attention to. For example, the share of DEX trading volume relative to CEX is expected to continue to increase, and new narratives suitable for creating small and medium-cap assets may continue to emerge, just like the AI Agent and DeSci tracks.

In addition, such project construction methods as Daos.Fun integrating the financing process outside the Pump.fun model are expected to become mainstream, and projects must ensure a fair launch.

In the AI Agent wave, which ones will survive and which ones will die

Last year, AI Agent accounted for more than 70% of the attention in the entire market and was the most prominent narrative. Even today in 2025, the AI Agent cycle continues, and the combination of crypto and AI Agent will continue to be a key topic, as AI is considered a keyword in almost all industries. However, assuming that the crypto market gradually fades and enters a long-term adjustment period, we expect that once the interest driven by short-term speculative demand subsides, only a portion of AI Agent projects will survive, while another batch will die.

Under such market conditions, the projects that can survive are those that go beyond technical imagination and have novel ideas, and have practical value. Virtuals Protocol is a typical example. Considering the long-term viability of crypto combined with AI Agents in creating sustainable use cases and businesses, Virtuals Protocol provides integrated services for AI Agent development frameworks and AI Agent token creation launchpads, which will guarantee its unique position as the ecosystem base layer in the AI Agent market.

Notably, $VIRTUAL tokens are traded in pairs with all AI Agent tokens and are consumed like base currency when people use tools such as launchpads. This token model of "accumulating value from all platform interactions" is a key foundation to support the sustainable growth of Virtuals Protocol.

At the same time, from the perspective that the AI Agent ecosystem must generate actual profits, the combination of DeFi and AI Agents seems to be the most reasonable path. Transaction fees, lending spreads, and generating income through structured products in DeFi protocols have been clearly verified to have PMF space.

Therefore, rather than allowing AI Agents to develop new businesses in areas such as games or social networking, it is better to introduce them as a solution to DeFi inefficiencies. In particular, AI Agents as autonomous portfolio management tools, natural language-based user experience improvements, and automated trading tools are expected to become key use cases leading the integration of AI Agents with crypto.

The top three trends in crypto this year are:

The convergence of crypto and AI

The DeFi renaissance driven by the activation of the fee switch model

The resurgence of airdrops and ICOs driven by Hyperliquid.

The first trend has attracted widespread attention from analysts at the forefront of AI research, and this section will delve into the latter two topics.

The DeFi renaissance: the fee switch revolution

Today, most DeFi tokens are used only as governance tools. While this is consistent with the idea of decentralization, the tokens provide limited actual economic value to holders as governance tools without empowerment. Despite the strong operational performance of many DeFi protocols, their token prices remain undervalued, reflecting the limited utility of these assets.

In this context, the fee switch model - which distributes a portion of the protocol's revenue directly to token holders - has long been considered a potential catalyst for re-evaluating DeFi tokens and making them more attractive to investors.

However, the implementation of such mechanisms has been repeatedly hindered by regulation. The U.S. Securities and Exchange Commission (SEC) classified revenue distribution tokens as securities, placing a significant compliance burden on the protocols. Uniswap has attempted to activate the fee switch feature multiple times through three separate governance votes, but has been blocked by concerns about regulatory risk. Notably, influential stakeholders such as a16z opposed these proposals, highlighting the hidden dangers of greater diversity within the DeFi space.

The situation took a dramatic turn after Donald Trump won the presidential election in 2024. With Republicans in control of the White House, Congress, and the Supreme Court, the outlook for crypto policy has improved significantly. The new administration has expressed its intention to position the United States as the global "crypto capital" and has even explored the inclusion of Bitcoin in its strategic reserves.

This policy shift is reflected in the appointment of many key positions. Paul Atkins, as the new SEC Chairman, and David Sacks, as the White House Crypto Policy Advisor, introduced a more constructive approach. Initiatives such as the removal of "Chokepoint 2.0" and the establishment of a dedicated crypto advisory committee are aimed at the regulatory clarity issues that need to be addressed. The departure of Gary Gensler and the subsequent change in the SEC's position have significantly eased the compliance pressure on market participants.

Driven by this optimism, several cutting-edge DeFi protocols are actively rethinking fee switch models. Prominent protocols with proven revenue streams like ENA, UNI, AAVE, and RAY are participating in governance discussions to implement revenue sharing mechanisms. As regulatory clarity emerges, these protocols are expected to anchor their token economics on sustainable revenue distributions, thereby closing the gap between speculative value and fundamental financial metrics.

This evolution marks a new dawn for the DeFi renaissance, which, unlike the DeFi Summer explosion in 2020 driven by liquidity mining and a surge in innovative products, prioritizes sustainable models, continued revenue generation, and revaluation of DeFi tokens. As these changes continue to occur, DeFi protocols have the opportunity to consolidate their competitive advantage over the traditional financial system, providing decentralized solutions based on real economic benefits.

Airdrops and ICO resurgence driven by Hyperliquid

One of the defining moments of the market in 2024 is the rise of Hyperliquid. Following the November 29 TGE, the HYPE token surpassed a $34 billion FDV within a month, and as of January 14, 2025, it is trading at a valuation of approximately $20 billion. However, Hyperliquid’s impact goes far beyond valuation, and its strong commitment to community-first philosophy sets a precedent for the trajectory of Web3 projects in the coming years, potentially redefining industry standards.

Hyperliquid’s decision to operate entirely through self-funded operations breaks the traditional model. By ensuring equal opportunities for all participants and refusing to allocate tokens to private investors or market makers, the project directly challenges the common practice of inflating valuations through VC financing. The latter often puts retail investors under pressure to sell tokens at high prices. Hyperliquid’s model forces the industry to re-examine token allocation standards, pushing the industry in a more fair and transparent direction.

As we enter 2025, the resurgence of community-based funding models seems inevitable. While the ICO boom of 2018 was marred by scams and regulatory ambiguity, clearer regulation under the Trump administration could restore the environment and structure of mutual trust in the market. Platforms like Echo and Legion are already taking advantage of this shift, which also marks a broad return to the decentralized ideals of Web3.

Hyperliquid also reshapes the way people think about airdrops. In the traditional model, airdrops have been criticized for failing to foster long-term community faith and are often used as short-term incentives with limited impact. Some project founders are skeptical of them, believing that they are cost-ineffective marketing activities that accelerate user churn rather than promote retention. Indeed, many users participate in airdrops only to receive a one-time reward and then quickly exit. The market generally believes that airdrops are an ineffective and unsustainable marketing tool.

However, Hyperliquid challenges the narrative of the traditional model of short sellers by allocating 70% of the HYPE token supply to the community and demonstrating how to use airdrops to share rewards and promote growth together. By prioritizing the community, Hyperliquid demonstrates the potential of airdrops to build loyalty and long-term engagement. Inspired by this success, other projects have begun to adopt similar strategies. For example, Azuki recently announced that it would distribute 50.5 ANIME tokens to the community. As a result, the airdrop model is expected to resurge and may become one of the defining themes of 2025.

Hyperliquid's success is due to its commitment to product quality. By achieving PMF before the token is released, Hyperliquid prioritizes practicality and community trust over speculative gains. This strategy not only solidifies its reputation, but also provides a roadmap for projects aiming to achieve long-term viability of Web3.

Hyperliquid's pioneering approach provides a blueprint for the future of Web3. While it may be challenging to replicate its success, its principles of fairness, transparency, and product-first growth will influence a new generation of projects. As these new models and new ideas gain traction, 2025 may be a major step towards achieving Web3's foundational ideals of decentralized value creation and fair participation.