Foreword
Over the past decade, Bitcoin has demonstrated remarkable innovation and resilience, even during times of challenging market conditions. It has introduced groundbreaking elements to the modern monetary system, internet technology, and financial sectors, thereby establishing itself as a prominent asset in the global mainstream.
On January 10 2024, the US Securities and Exchange Commission (SEC) officially approved 11 spot Bitcoin ETFs to trade on regulated exchanges.* This momentous achievement stands as a testament to the profound thinking, innovative practices, and unwavering perseverance of the visionaries within the crypto industry. Their collective efforts have paved the way for the realization of a future digital society. Financial capital has played a pivotal role throughout this journey, demonstrating unwavering faith and an unyielding pursuit of the future, even during the bear market of the past two years. Investors in crypto space have effectively utilized its financial resources to rescue projects facing crisis, collaboratively crafting a captivating vision of the digital future. As a result, it has emerged as the most formidable driving force behind the relentless innovation within the crypto industry.
In 2023, the crypto industry witnessed remarkable growth, with its total market value soared to $1.761 trillion. Bitcoin, the leading cryptocurrency, surged back into the global top 10 assets by market value, reaching an impressive $827 billion as of Dec 31 2023.** On the institutional financing side, the industry raised a total of $9.11 billion spanning across 1,179 rounds throughout the entire 2023.*** In this exciting landscape, OKX Ventures played a significant role, actively participating and contributing to the industry's advancement.
Over the past year, OKX Ventures has demonstrated unwavering determination and resilience during a challenging period in the primary market. Against the prevailing trend, it strategically bolstered its investment portfolio, resulting in an impressive total annual investment that surpassed $50 million. The venture team adopted a two-pronged approach: 1) forging deep partnerships with prominent ecosystems such as Solana, Near, Polygon, Avalanche, establishing ecological funds to support developers in building critical components on these chains, and actively participating in community co-construction. 2) collaborated with Gitcoin and Blockbooster to organize hackathons in San Jose and Hong Kong, discovering and nurturing innovative and high-quality projects while delivering comprehensive support through its unique capabilities and resources.
Furthermore, as part of its expansion efforts, OKX Ventures is gradually expanding its support for projects deployed on our own public chain.****
In the year of the Dragon, the convergence of a favorable macroeconomic climate and the ongoing innovation cycle within the crypto industry sets the stage for a potential bull market. As we anticipate the Federal Reserve (the Fed) cutting interest rate, the highly anticipated Cancun upgrade on the Ethereum network, the approaching Bitcoin halving, and the rapid proliferation of BTC-based ETFs worldwide, we can envision a promising and vibrant year ahead in 2024. As a prominent player in the crypto industry, OKX Ventures possesses exceptional foresight in investment and has focused on numerous projects with great potential. Through extensive research on industry innovations and emerging trends, we're delighted to share our insights on the seven most explosive tracks expected to shape 2024.
*Source: Investopedia, Jan 10 2024
**Source: Coingecko, Dec 31 2023
***Source: Rootdata, Dec 31 2023
****Source: OKX Venture
Review of key projects in 2023
The investments that OKX Ventures made encompass a wide range of areas, including infrastructure, GameFi, DeFi, Web3.0, Bitcoin ecosystem, AI, and more. Approximately 50% of these investments focus on infrastructure and DeFi projects, underscoring the vital role played by infrastructure. It provides a secure, efficient, and reliable operating environment for crypto assets and blockchain technology, and its robustness directly influences the overall development and sustainability of the entire industry. A well-established infrastructure fosters innovation, attracts a larger pool of participants, and lays a solid foundation for the long-term prosperity of the crypto industry.
The year of 2023 witnessed a gradual recovery in the crypto industry from the previous downturn. However, the primary market faced its own set of challenges due to the prolonged bear market that spanned two years. Undeterred by these circumstances, OKX Ventures remained steadfast in its commitment to invest in high-quality entrepreneurial teams and projects. Leveraging its extensive industry resources, including profound expertise and a thriving exchange ecosystem, OKX Ventures provided comprehensive and diverse support to innovative projects with immense potential. Notably, the total investment amount surpassed an impressive $50 million last year.
OKX Ventures invested in numerous high-quality projects including Polyhedra, Celestia, Kakarot, MegaRollup, Altlayer, Bitsmiley, Bewater, Babylon, Cetus, Ethena, Flashbots, HUG, Moonbox, Mocaverse, Matr1x, Orbiter, RepubliK, Rage Trade, Sei, Taiko, TRLab, ZKM, etc.
In the following, we present a thoughtfully curated collection of exciting projects that embody innovation across a diverse range of tracks.
Source: OKX Ventures
Layer 2 expansion solution
Layer 2 has brought significant improvements to the Ethereum network, enhancing its scalability, transaction efficiency, and cost-effectiveness, and relieving pressure on the main chain, etc. Currently, many solutions such as ZK Rollup, Optimistic rollup, Validium, Plasma, etc. have been developed, playing an increasingly important role in enhancing privacy protection and reducing transaction costs. The two projects we focus on are Scroll and Taiko.
1) Scroll: is a native zkEVM Layer2 solution for Ethereum, representing Type 2 zkEVM. It can achieve native compatibility with existing Ethereum applications and tools. Transactions are conducted off-chain, then succinct proofs of correctness are posted on-chain. This will bring higher throughput and lower costs compared to the Ethereum base layer.
2) Taiko: is a decentralized Ethereum equivalent ZK-EVM and general-purpose ZK-Rollup. Its purpose is to allow developers and users of dApps developed for Ethereum L1 to use Taiko without any changes to the codes. Therefore, dApps can be easily deployed to L2, inheriting the security of Ethereum, while generating lower transaction fees than L1.
MEV track
MEV (Maximum Extractable Value) refers to the maximum profit that miners or block producers can get in the process of transaction execution on the blockchain due to different transaction order, packaging, and confirmation methods. Although maximizing participant returns by optimizing transaction order, it has also sparked discussions about security and network effect issues. Currently, the developers and communities are working together to find a more fair, efficient, and secure MEV solution.
1) Flashbots: The mainstream MEV solution aims to alleviate the negative externalities and risks that MEV brings to smart contract blockchains and provide a permissionless, transparent, and fair ecosystem. This includes three goals: democratizing access to MEV income, bringing transparency to MEV activity, and redistributing MEV income.
Cross-chain track
Cross-chain bridges solve the interoperability problems between different public chains, promoting the liquidity of crypto assets and applications, providing users with greater choice and flexibility, thereby helping to build a more robust, diverse, and interconnected blockchain ecosystem.
1) LayerZero: is a full-chain interoperability protocol, designed specifically for lightweight cross-chain message passing. It provides trustworthy and guaranteed message passing and has a trustless mechanism.
2) Orbiter Finance: is the most popular Rollup bridge on Ethereum, used for transferring Ethereum's native assets. It proposed an inter-chain message-passing protocol that provides an aggregation middle layer for zK-rollups, boosting Layer-2 performance and reducing gas consumption.
Cosmos Ecosystem
More and more high-quality projects such as Celestia, Sei Network, etc. are based on Cosmos construction. Cosmos is an open platform and ecosystem aimed at solving blockchain interoperability problems. It allows secure and reliable cross-chain communication between different blockchains. By providing efficient cross-chain communication and interconnectivity tools, Cosmos offers a wider range of choices for developers and users, and its ecosystem is constantly growing and expanding.
1) Berachain: is a Cosmos Layer1 with an EVM architecture and uses PoL (Proof of Liquidity) consensus. It introduces the Bera network of three-token systems, including the network Gas token BERA, ecological stable coin HONEY, and non-transferable Bera governance token BGT.
2) Sei Network: is a high-performance Layer1, specifically for digital asset transactions. It has the industry's shortest transaction latency, at a minimum of 300 milliseconds. It has a built-in order matching engine (OME) that can help trading applications expand. Its anti-front-running mechanism can resist MEV. Recently, its parallel EVM narrative has triggered market chasing.
AI + Web3 Game Track
Web3 games return data ownership to the player, meaning players can fully own and freely trade their crypto assets obtained in the game. They can also participate in the improvement of the game, the development of new features, and the adjustment of the economic model through voting rights, and receive rewards, thus participating more deeply in the game ecosystem. The development of Web3 games drives the gaming industry towards a more open, transparent, and user-friendly direction.
1) Matr1x: Matr1x is a cutting-edge cultural entertainment platform that combines web3, AI, and gaming. Its primary mission is to drive a revolution and foster innovation in the gaming and content industries using blockchain technology and artificial intelligence. The company encompasses an array of offerings, including in-house developed boutique games and collaborations with third-party partners, game IP development cooperation, and global esports events. The platform will showcase its game trilogy, consisting of Cyber Earth, Mars Immigration, and Interstellar Exploration, through three distinct titles with a shared universe: Matr1x FIRE (first-person shooter), Matr1x WAR (shooting + MMORPG), and Matr1x EVOLUTION (SOC).
Bitcoin Ecosystem
In 2023, the birth of Ordinals and BRC20 activated the Bitcoin ecosystem, creating a new narrative for Bitcoin beyond value storage, transactions, and payments. It increased miners' income, eased users' concerns about the end of Bitcoin halving or affecting network security, and ignited the prosperous development of the inscription ecosystem of other major public chains. Bitcoin has since broken its "digital gold" stereotype, with various L2, token protocols, cross-chain bridges, etc., thriving, and market attention began to return to the Bitcoin ecosystem.
1) Bitmap Tech (formerly Recursiverse): is an innovative project aiming to build an intelligent, decentralized, and composable digital world through the Ordinals network and the first layer (layer 1) of Bitcoin. The project represents a firm commitment to building a valuable metaverse ecosystem and has launched products such as BRC420, recursive index Inception inscription, and Bitmap.Game
2) B² Network: is a second layer (Layer-2) solution located on Bitcoin, combined with ZKP's BTC rollup, which can write aggregated storage and ZKP into BTC inscription to achieve a more orthodox and usable BTC layer 2.
3) Babylon: is a proposed Bitcoin (Bitcoin) staking protocol that allows Bitcoin holders to stake their idle Bitcoins to increase the security of PoS (Proof-of-Stake) chains and earn profits in the process, aiming to integrate Bitcoin with the PoS economic system.
4) BitSmiley: is BTC's first native stablecoin project. It's a comprehensive financial protocol established on the Bitcoin blockchain, as part of the Fintegra framework.
OKX Ventures' investment portfolio encompasses trending tracks such as L2, the Bitcoin ecosystem, the Cosmos ecosystem, AI+Web3 games, and more. By effectively mobilizing extensive resources, OKX Ventures offers robust support to foster the growth of innovative projects within the crypto industry. The emphasis on infrastructure, including networks, protocols, hardware, and other key components, plays a crucial role in driving the development and maintaining the stability of the entire crypto ecosystem.
Source: Information gathered and researched by OKX Ventures from mentioned projects
The 7 predictions of 2024
Constantly evolving with new technologies and solutions, the crypto industry is a relentless force driving its own development. OKX Ventures is committed to long-term value investment, embracing industry innovation and anticipates forthcoming changes. Leveraging our expertise, we've made seven key predictions that are set to shape the landscape of 2024.
1. Bitcoin breakthrough: expanding applications and heightened on-chain activities bolster network security
From a fundamental perspective, the Bitcoin ecosystem has witnessed a rapid expansion in terms of both the number of users and on-chain addresses, indicating a growing interest and adoption of the digital asset over the years. Meanwhile, the upcoming Bitcoin halving event in 2024 is expected to serve as a significant catalyst, further enhancing its fundamental appeal as a store of value.
The number of accumulated Bitcoin addresses surpassed 1.2 billion in 2023 according to Glassnode data, and the global user base of cryptocurrency assets has increased from 5 million users in 2016 to over 500 million users in 2023, according to data from Statista. Regarding network activity, Token Terminal's data show that Bitcoin's monthly active users were approximately 13.7 million at the time of publishing, with on-chain transaction data reaching 17.5 million . From an on-chain data growth perspective, the size of the Bitcoin blockchain is approximately 542 GB as of Jan 16, 2024 — a 70% increase compared to three years ago. All of this reflects the explosive growth in the usage of Bitcoin as the leading cryptocurrency.
On-chain activity for Bitcoin has also surged in recent months. Ordinals made significant strides last year, empowering the Bitcoin network with asset issuance capabilities and promoting large-scale applications such as inscriptions. According to data from Dune analytics at time of writing, the total BRC-20 transfer volume has exceeded 45.4 million, the total fees generated by BRC-20 have exceeded 4,290 BTC, and the total inscription volume has exceeded 53 million, and the total fees generated by Ordinals have exceeded 5,383 BTC. OKX Ventures firmly believes that the future Bitcoin asset issuance protocol will be more diversified, enabling greater support for native innovations. Asset innovation protocols such as Ordinals, BRC-20, RGB, Taproot Assets, Runes, Taro, Atomicals, and more, along with potential new expansion solutions, will unlock a plethora of possibilities within the ecosystem. OKX Ventures has strategically invested in expansion projects like BitSmiley (facilitating native DeFi support), Babylon (enabling PoS expansion), and Bitmap tech and B² Network (driving Layer2 expansion).
There are also numerous innovations set to revolutionize user privacy and transaction efficiency on Bitcoin ecosystem. The Lightning Network's development, featuring the utilization of MuSig2's single taproot channel, payment splitting and switching (PSS) to boost network throughput and mitigate balance probing attacks, as well as interactive multi-signature (MuSig2) and multiple HTLCs aggregation for reducing on-chain costs and enhancing resistance to interference, will play a pivotal role in driving progress. Additionally, the combination of Taproot assets and RGB introduces a novel on-chain mechanism for tokens. Security and privacy are further bolstered through soft-fork proposals like OP_VAULT and BIP324's version 2 P2P transfer protocol. Furthermore, Bitcoin Core's AssumeUTXO feature aims to enhance the experience of new full nodes. These innovations collectively establish a more robust, efficient, and user-friendly Bitcoin network.
For a more comprehensive understanding of our insights on Bitcoin, please refer to this report for detailed information.
2. Ethereum's Dencun upgrade: enhancing Layer2 usability and propelling the industry forward
The year 2023 began with its fair share of challenges for the Ethereum blockchain, particularly in the first three quarters. Bearing the remnants of the bear market, Ethereum witnessed a dip in the total value locked (TVL), reaching a multi-year low in early October 2023. As the market gradually regained strength, the TVL started to rebound, ultimately concluding the year at $30 billion, a notable increase from $20 billion just 2.5 months prior.* Furthermore, Ethereum's diverse range of indicators displayed growth during the final months of the year, showcasing a pick up in momentum for the blockchain.
The Ethereum ecosystem saw a notable surge in the number of Layer2 projects, surpassing 34 from the initial count of around 18. Daily active users on Layer2 surpassed those on Layer1, indicating the increasing adoption of Layer2 solutions.** DeFi emerged as the predominant use case for Ethereum, with gas usage starting at 31% and steadily climbing to nearly 50% by year-end. Among these figures, Uniswap accounted for 11.7% of Ethereum's total trade throughout the year. Conversely, gas usage related to NFTs decreased from 32% in January to 7% in December, reflecting shifting market dynamics.*** The Shanghai upgrade played a crucial role, leading to an impressive 82% increase in staking volume. Over 24% of ETH was staked, expanding its use cases and becoming a vital source of credit for ecosystem growth.**** This upgrade showcased the growing popularity and importance of staking within the Ethereum ecosystem.
The Dencun upgrade emerges as the most significant and favorable development for Ethereum in 2024. Its implementation of the EIP-4844 Proto-Danksharding proposal yields a fundamental performance improvement for Layer 2 projects. Moreover, the introduction of Blobspace overcomes the limitations of calldata, addressing a crucial constraint. By enabling Layer 2 to handle a higher volume of transactions submitted to the mainnet simultaneously, this upgrade brings about reduced costs for users. Moving forward, the competition among Layer 2 solutions is anticipated to revolve around operational capabilities and decentralized implementations, including Restaking Rollup, data availability (DA) innovation, decentralized Sequencer, and decentralized Prover narratives. These advancements aim to enhance efficiency, security, and decentralization within the Ethereum ecosystem.
Ethereum's unwavering commitment to in-depth research remains at the forefront of the industry, tackling critical issues like ZK applications, modularization, EVM object format (EOF), and account abstraction. Notably, the emergence of Ethereum's scaling solution, Rollup, has marked a significant breakthrough. Despite market fluctuations and competition from rival chains, Ethereum maintains its leading role in driving comprehensive industry research and technological innovation. OKX Ventures foresees several pivotal EIPs, including ERC-4337, EIP-4844, EIP-3074, EIP-5003, Verkle Tree, and the corresponding Prague/Electra upgrade plans, playing a crucial role in Ethereum's development next year. Overall, Ethereum continues to firmly lead the industry's innovation trend, making consistent contributions to the overall growth of the blockchain industry, encompassing technical research and ecosystem construction.
*Source: DefiLlama
** Source: L2beat
***Source: Dune analytics
****Source: Dune analytics
3. Led by Solana, the alt-layer 1 ecosystem will benefit from broad industry recovery
Blockchain can be likened to a city rather than just a network, and Solana and the Move series public chains have made significant contributions to the development of new infrastructure. As the industry attracts new users, the city-like characteristics of low-cost and high-capacity of these chains will be fully demonstrated. Consequently, single-chip chains, such as Solana and Cosmos, are experiencing a resurgence, with their developers, market value, and active users all on the rise.
Solana's developer ecosystem has exceeded expectations, boasting approximately 2,500-3,000 monthly active developers and positioning itself as the second-largest ecosystem in terms of total monthly active developers. The three-month developer retention rate has risen from 31% to over 50%, indicating a steady influx of new developers. More than half of these developers possess at least three years of experience, showcasing a higher level of contribution and the development of more mature applications.*
Solana differentiates itself from Ethereum by charging state rent to DApp teams and voting fees to validators, creating additional value for SOL coins beyond transaction fees. This value-driving mechanism shifts the cost from users to DApp teams and infrastructure providers, resulting in better scalability. Consequently, user transaction costs are reduced, enhancing the overall user experience. Solana offers superior performance indicators compared to Ethereum, albeit with higher hardware requirements. This emphasis on hardware does not lead to centralization but rather enables high throughput and fast transaction confirmation times. Solana's smart contracts, utilizing standardized structures like Metaplex, reduce the due diligence burden on users and developers, fostering entrepreneurial activities. Standardization of innovation and contracts could potentially lower costs for developers and users.
The Solana ecosystem holds immense potential in 2024. Projects like Teleport, Helium, and Render Network leverage Solana's scalability and efficiency to redefine traditional models in ride-sharing, IoT communication, and GPU rendering, respectively. As a catalyst for speed, reducing transaction costs and offering a network scale architecture, Solana has become the top choice for entrepreneurs driving the decentralized future. As these projects seamlessly integrate with Solana, they not only overcome the limitations of centralized systems but also pave the way for building more inclusive, resilient, and dynamic decentralized physical networks.
*Source: The 2023 State of the Solana Developer Ecosystem, Jan 9 2024
4. The close integration of AI narratives and Web3 technologies gives rise to new applications
2022 and 2023 are the breakout years for AI, as we have witnessed significant advancements in this field. In October 2022, OpenAI's ChatGPT was released and quickly gained immense popularity, accumulating 1 million users within just five days. Delphi Digital also pointed out that ChatGPT continued to break records, becoming the fastest application to reach 100 million users (see chart below). This remarkable growth has paved the way for the integration of artificial intelligence into the cryptocurrency market. AI projects within the crypto industry are primarily focused on decentralized computing power, decentralized AI public chains, AI model trading markets, AI applications, ZKML, and other related areas. Among these, OKX Ventures identifies decentralized computing power, AI agents, and AI+Web3 applications as particularly noteworthy and deserving of continuous attention.
Source: Delphi Digial
Decentralized computing power within the blockchain ecosystem offers cost reduction opportunities due to its inherent decentralized nature. The more decentralized the computing power nodes, the lower the price of unit computing power. The introduction of Web3's unique token economic governance model opens up vast possibilities for model training, inference, optimization, and distribution of computing power. The synergy between AI and Web3 allows for imaginative applications in these areas.
AI Agent is an intelligent agent program capable of autonomous decision-making and execution. It plays a crucial role in simulating and assuming human roles. By enhancing information communication between the blockchain and the external world, AI Agents intelligently select cross-chain solutions that best meet user needs. This effectively addresses the "information island" problem caused by the proliferation of public chain ecosystems, providing users with a superior cross-chain experience
Source: OKX
AI + Web3 applications primarily aim to improve user experience, enhance development efficiency, and seamlessly integrate into existing blockchain applications. This integration can be observed in areas such as AI combined with DeFi, gaming, NFTs, and more. The technical fusion of AI and Web3, supported by a compliant environment, is expected to reshape user behavior patterns in Web3, accelerate mass adoption, and contribute to the establishment of a trusted digital society.
OKX Ventures recognizes the significance of AI and has invested in projects like Flock and MyShell. MyShell, for instance, leads the way in multimodal voice models, recorded over 12k stars on Github, 420,000 product registrations, 50,000 creators, 70,000 private robots, and 900 public robots. It serves as a prime example of the successful integration of AI Agent applications and Web3.
5. A paradigm shift in blockchain games and potential breakthrough in fully on-chain games (FOCG)
Despite not experiencing an explosive growth in 2023, blockchain games continue to demonstrate their potential due to their ability to handle large user bases and leverage valuable data. According to data from Delphi, the game industry disclosed 133 transactions, raising an impressive $1.18 billion in funds. The total number of game projects has reached approximately 2,500 to 3,500. Furthermore, Footprint data reveals that the GameFi field amassed a staggering 340 million users in 2023, with a total transaction volume exceeding $3.2 billion and over 7.4 billion transfers. Notably, game projects generate an on-chain transaction volume that is, on average, 23 times higher than DeFi protocols. For example, Sweat Economy, supported by NEAR, has emerged as one of the most widely used mobile earning applications worldwide, with over 145 million active users. According to data provided by Sweat Economy, it has also attracted 2.1 million monthly active wallet users, with 1 million carrying out on-chain activities through Sweat Economy.
Source: Delphi Digital
Blockchain games are poised to become a significant driver of user growth, particularly with the opportunity for 3A games on the horizon. On the supply side, the development efforts throughout 2023 have yielded plenty of high-quality games that are now ready for release. With the inclusion of 3A game intellectual property, traditional gamers can seamlessly transition into the Web3 world, paving the way for a new era in the gaming industry.* OKX Ventures foresees a resurgence of blockchain games in 2024, marking the beginning of a fierce competition for users among various game titles. OKX Ventures is highly optimistic about the potential of 3A games to attract users and generate asset value. As a result, the venture firm has strategically invested in projects such as Big Time, Ember Sword, Shrapnel, and more. Notably, the token launch for the $BIGTIME token aligns perfectly with the market's increasing interest. Players have the opportunity to earn in-game token rewards on a daily basis, contributing to the token's price growth and making it one of the more successful investments in the GameFi space.
In the future, Fully Onchain Games (FOCG) are poised to become a significant growth area in the gaming industry. FOCG refers to games where assets, settlements, and game logic all take place on the blockchain, introducing a new and intricate on-chain application paradigm that enables financialization and composability. Currently, the FOCG track is still in its early stages, undergoing development and construction, and the availability of applications and assets is somewhat limited. However, this presents a tremendous opportunity for growth. OKX Ventures holds an optimistic outlook on FOCG and has strategically invested in projects like Curio to support innovation within the industry. It is anticipated that FOCG will thrive around various aspects, including the engine, game content, wallet, trading platform, and other peripheral ecosystems. These developments will contribute to the expansion and evolution of the FOCG landscape, fostering new and exciting possibilities for gamers and developers.
*Source: Immutable
6. DePIN to sustain remarkable growth
DePIN (Decentralized Physical Infrastructure) has emerged as a robust physical infrastructure grid that leverage blockchain technology to enable transparent and efficient management of real-world services. The sector experienced significant growth in 2023 with a combined market cap of liquid tokens exceeding $20 billion. It generates real-world use case as well with over $11 billion of transaction volume recorded, and generated over $15 million annualized income onchain. The DePIN ecosystem is vibrant, encompassing over 650 active projects spread across six categories: computing, artificial intelligence (AI), wireless, sensors, energy, and services. What truly sets DePIN apart is that its income generation is primarily utility-driven rather than speculative. While some cryptocurrencies have experienced drawdowns of over 70% during bear markets, the income of the DePIN sector remains relatively unaffected, with drawdowns ranging from around 20% to 60% from peak levels. This resilience demonstrates the robustness of the DePIN sector.
Source: Meassri's State of DePIN 2023
OKX Ventures believes DePINs will explore new avenues by developing closer integrations with AI, zero-knowledge proofs (ZK), gaming, and other fields more extensively in 2024. For instance, the on-chain implementation of ZK-verifiable GPU cloud services could become a reality within the next 1-2 years, rendering centralized providers unable to offer comparable services. From a narrative perspective, OKX Ventures holds an optimistic outlook for DePIN infrastructure and the related Layer 1 chains.
Due to the numerous benefits some general-purpose blockchains can offer, including high-throughput, low cost, and a large developer community, many DePINs are currently being developed on networks such as Solana and Polygon. Notably, projects like Helium and Render Network have transitioned to Solana, attracting a substantial user base to the network. According to data from Dune Analytics, the total number of IOTex users has now reached 440,000, with over 180,000 Helium users on Solana alone. Considering the growing user demand, it's anticipated that by 2024, DePIN-specific Layer1 blockchains will begin to launch and expand, providing dedicated chains tailored specifically to the needs of the DePIN ecosystem.
7. Macroeconomic improvement fuels cryptocurrency industry's new era
The cryptocurrency industry is making significant strides towards regulation as regulatory systems are established and improved in countries such as El Salvador, Canada, Dubai, Brazil, and others. The progress is expected to create a more favorable environment for industry's development in 2024, expanding the global reach of cryptocurrencies. The recent approval of the spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) grants traditional financial investors exposure to Bitcoin, further accelerating the industry's regularization, scaling development, and transforming the traditional finance sector to embrace innovation. This collective effort aims to promote fairness, security, and transparency within the financial industry.
According to data from Bloomberg Intelligence, the nine new spot Bitcoin ETFs have attracted over $6 billion of net inflows, with BlackRock's IBIT raised $2.37 billion followed by Fidelity's FBTC $2.1 billion. These ETFs successfully captured funds from traditional finance whom decided to allocate capital to cryptocurrency. From another angle, the supply of stablecoins on-chain is also increasing, indicating that new funds are starting to flow in continuously. DefiLlama data shows that the total market value of stablecoins stands at $135b as of Jan 31 2024, an increase of over $10 billion from a recent bottom in 2023 August.
Source: DefiLlama
With strong capital support, the crypto ecosystem is poised for accelerated development and innovations. Over the past years, we've witnessed rapid growth in blockchain infrastructure, catalysed by the investment and resources provided by venture capital (VC) investments, creating an environment ripe for new applications and innovations. From January 2020 to January 2024, the funding trends have shifted beyond CeFi, favoring infrastructure, gaming, NFTs, and DeFi. Some of these projects have not only established impressive track records in delivering their products but have also successfully accumulated funding during the previous bear market. As a result, they're poised to play a pivotal role as primary drivers and contributors to the forthcoming wave of innovation.
Conclusion
The rise of the crypto industry has become a catalyst for innovations in internet technology and financial services, ushering in a future world of possibilities. The industry's builders are the creators of this digital future, with deep understandings and unique insights into blockchain technology. These builders have achieved remarkable success in the crypto industry through constant innovation and dedication. However, they aren't satisfied with status quo and continue to drive the industry forward with even more innovations. They actively participate in open-source projects, lead startups, build communities, and contribute to the growth of the industry. Their dedication inspires others to join and brings new energy to the crypto economy.
As new technologies and global crypto regulations emerge, the relationship between the crypto industry and traditional finance is evolving. The interaction between the two is transitioning from competition to integration, impacting market liquidity. The crypto industry is poised for growth in 2024, but large-scale liquidity entry takes time. As the industry evolves, innovative projects require professional funds, technology, and strategic support to thrive.
OKX Ventures, as a leading investment institution, have established itself at the forefront of the industry, supporting diverse innovations and assisting industry builders, including high-quality startup teams and projects. With our profound understanding and insights into the blockchain industry, coupled with extensive expertise in post-investment management, we have developed a forward-thinking and empowering approach through global collaboration. By integrating and fostering cross-border cooperation, we provide our partners with access to OKX's extensive resources, including traffic, transactions, public chain, and technology support. This enables us to establish a comprehensive "OKX resource system", facilitating seamless collaboration and offering a diverse range of services to our portfolio companies. Moreover, OKX Ventures transcends the role of a traditional financial investor. We actively take on the roles of explorer and enabler, fostering growth alongside our startup partners to accelerate creativity and innovation within the industry.
Throughout its history since its inception in 2009, Bitcoin has weathered economic cycles and market fluctuations, consistently bouncing back from lows and reaching new highs. This resilience has instilled confidence in long-term value investors, including OKX Ventures. In the ever-evolving market landscape, OKX Ventures remains attuned to market trends, adapting to the market environment and steadfastly investing in innovative projects in the crypto industry. This approach has enabled OKX Ventures to successfully navigate multiple bull and bear cycles, resulting in favorable investment returns. Moving forward, OKX Ventures will continue to deeply engage with the primary crypto market, supporting industry builders, high-quality teams, and projects.
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