Spartan: Nine Trends in the Crypto Industry in 2024

Original author: The Spartan Group

Original compilation: Deep Tide TechFlow

2023 is a year in which cryptocurrencies are spent in a bear market. While the year has seen many upheavals, it has also provided room for incredible new technological innovations.

Here are some of the things that the partners of Spartan’s investment, advisory, and lab teams are excited about for the upcoming crypto in 2024. In this article, we’ll dive into nine of the most exciting trends of the year, from Web3 gaming to BTC ecosystems. These trends not only herald a massive change in the Web3 space, but also reveal a more open, connected, and innovative digital future.

AAA-level Web3 gaming

Kelvin Koh, Co-Founder & Partner, CIO, Spartan Capital

I’m excited about the next generation of AAA-quality Web3 games, some of which will launch in 2024. I believe these games will bring in millions of new Web3 users and show why Web3 games are a further evolution of existing Web2 games.

BTC-based construction, consumer applications, and the Asian market

Melody He, Co-Founder & Partner & Co-Head of Spartan Consulting

For 2024, there are 4 things I’m particularly excited about:

• Unleash the power of BTC blockchains based on BTC assets
• A consumer app that marks the next generation of NFTs
• Asian markets become the hub of cryptocurrencies - from crypto trading to corporate adoption
• Capital flows to regulated exchanges and local exchanges, and liquidity will become more decentralized, but this will also force projects to invest in local partners and exchanges, rather than projects that are simply listed on overseas exchanges and do not use their tokens to drive local adoption.

M&A-driven integration

Casper B. Johansen, Co-Founder & Partner, Co-Director, Spartan Consulting

I expect 2024 to be a year of growth and consolidation for the Web3 industry. In particular, I think we’re going to see consolidation between centralized exchanges. There are 3 main forms of this integration:

• Domestic integration between competitors in the same market
• Regional integration between exchanges operating in adjacent markets
• Cross-continental integration through access to strategic markets by large global players.

We will also see a sharp increase in M&A activity in other areas of Web3, including custody, data and analytics, staking, payments, and more. After the wave of Web3-native M&A-driven consolidation, we will see a second wave of M&A led by non-Web3-native companies, as well as IPOs by some of the larger Web3 platforms.

Major Applications, Zero-Knowledge Proofs, and Modular Blockchains

Leeor Groen, Managing Director, Spartan Group

I’m glad that the industry is validating the infrastructure we’ve built over the past few years by adopting major applications. In Web3, we’re going to start measuring the success of this in different ways, and we’re going to start realizing the value of calculating ownership in addition to personal assets. Privacy and security will be key drivers, and we’ll see users start to realize the value of zero-knowledge proofs and modular blockchains that users don’t even know they rely on on the backend of everything from digital identities to gaming.

On-chain proxies, virtual goods, and aesthetic crypto brands

Adrian Lai, Chief Creative Officer (Studio Head), Spartan Labs

Concepts such as intents, networked playable characters, crypto AI agents, NFT applications, and modular account abstractions have emerged in 2023. In 2024, I expect these decentralized crypto concepts to converge into a robust economy that revolves around autonomous on-chain agents.

Secondly, Apple’s Vision Pro is coming soon. I’m excited about the corresponding wave of virtual goods and experiences that the new spatial format will bring.

Finally, I’m looking forward to seeing more aesthetic-oriented crypto-native brands, led by innovators like Family, Blackbird, Bebop, Seed Club, Zora, FWB, and more.

DePIN and BTC Ecology

Cody Poh, Investment Associate, Spartan Group

I’m excited about the growth of DePIN, and projects that leverage cryptoeconomics to reduce structural costs will be a strong competitor to existing Web2 businesses. In addition, the ecosystem is expected to grow strongly as the BTC ecosystem becomes more practical and usable with the upcoming BTC infrastructure upgrade Tier 2, coupled with the high speculative value offered by newly created asset classes such as BRC-20.

The intersection of AI and blockchain

Audrey Taylor-Akwenye, Chief Technology Officer, Spartan Labs

In 2024, what I’m most excited about is the intersection of AI and blockchain. We have research and new use cases on zero knowledge and machine learning (ZKML). We have games that allow you to train AI agents using ERC 6551. I believe that in the coming year, we will see more AI being used to improve the user experience and efficiency of Web3, and more blockchain technology being used as a guardrail and transparency layer for AI.

Web3 consumer, social, and gaming take off

Dana Gan, Consulting Associate at Spartan Group

Looking ahead to 2024, I’m excited about the following aspects of the crypto space:

• We can see another wave and traction force in the relatively new L1/2. I’d like to see more developer events, TVLs, on-chain “killer apps”, and community building. To prove themselves, chains like Sui, Sei, Aptos, Base, Scroll, and others still have a lot of work to do in 2024.
• Expect an increase in retail-oriented consumer apps in the crypto space: The success of friend.tech, coupled with the airdrops that are likely to occur in the coming year, have sparked a surge in parody projects. This is just the beginning. This trend marks a significant shift in the industry’s focus towards consumer and social applications. I’m excited to test more products with better UI/UX, improved incentive flywheel and token utility, and a more sustainable business model.
• Foresee more advanced developments in the Web3 games and metaverse industry in the next 1-2 years: After the development of the past few years, many AAA and MMORPG Web3 games are on the way. With advances in hardware (e.g., Apple’s Vision Pro) and software (Metaverse Engine Company), I think there’s considerable growth potential in the gaming and metaverse space, and I’m looking forward to trying more of these games in 2024.

Tokenization and BTC networks for RWA

Yan Ma, Spartan Group Assistant

• The tokenization of RWA expands the categories and security possibilities of the BTC network.
• BTC networks provide scalability and interoperability through L2S solutions, activating more than $850 billion in unproductive BTC capital, paving the way for institutional adoption.
• DeSci will gain more traction as a powerful use case for blockchain — using Web3 technology to build a secure, enduring record of scientific contributions that enables fair credit distribution, streamlines transactions, allows for global resource sharing, and overcomes economic barriers.

The views expressed herein are those of individual employees of the Spartan Group and are not those of the Spartan Group or its affiliates.