In-depth Analysis of the Current Status of Crypto Assets: Development Trends and Challenges in 2024

Recently, an annual Crypto Assets report that has garnered significant attention has sparked widespread discussion within the industry. The report conveys an optimistic outlook on the industry's prospects through a series of data and charts. However, to fully understand the market conditions, we need to supplement and analyze some of the viewpoints in the report in depth.

Crypto Assets Adoption Status

The report begins by stating that "Crypto Assets activities and usage have reached an all-time high" and shows the correlation between the growth of monthly active Crypto Assets addresses and internet users. However, it is worth noting that one address does not always correspond to a real user. In fact, the increase in address activity may be due to various factors:

1. A single user may have multiple wallet addresses.
2. Activities related to popular coins have significantly increased on certain blockchains.
3. The widespread use of automated trading robots
4. Address activation caused by newly issued tokens

Therefore, relying solely on the number of active addresses may not accurately reflect the actual user scale. In contrast, looking at the monthly visit volume of major Crypto Assets data platforms may provide more valuable insights. Currently, the monthly visit volume of leading platforms is in the tens of millions, which may be closer to the real user base of the industry.

Although some blockchains have indeed attracted new users, overall, the number of retail investors does not seem to have significantly increased. On the contrary, long-term users are building a more complete infrastructure ecosystem.

Mobile Crypto Wallet Trends

The data regarding the growth of mobile encryption wallet users in the report seems optimistic, but it is necessary to consider the context of higher mobile device usage rates in developing countries. For example, in countries such as Nigeria, India, and Argentina, mobile devices account for more than 50% of internet traffic.

As mobile wallets become more user-friendly and feature-rich, their market share is growing. At the same time, the current complexity of the blockchain ecosystem also requires users to install multiple different wallet applications. These factors collectively drive the increase in the number of mobile wallet users.

This trend reflects the widespread adoption of Crypto Assets in emerging markets, which has long been one of the visions of Web3 and decentralized finance (DeFi).

Killer Applications of Crypto Assets

The report views stablecoins as one of the most obvious "killer applications" of Crypto Assets, and this perspective is understandable. Stablecoins have advantages such as fast transfer speeds and low costs, and more and more countries are establishing legal frameworks for them. With the improvement of the regulatory environment, stablecoins are expected to gradually replace traditional remittance methods.

It is worth mentioning that the trading volume of stablecoins has surpassed that of Visa, but it is mainly concentrated in the area of large transfers. For everyday small payments, traditional payment methods still dominate.

However, highlighting stablecoins seems to reflect a lack of more innovative breakthrough applications this year. This is somewhat disappointing compared to the situation a few years ago when DeFi was on the rise.

Infrastructure Development

Improvements in infrastructure are crucial for supporting the next generation of decentralized applications (dApps) and high-load applications. However, these advancements are currently primarily reflected at the technical level, and ordinary users have yet to experience significant direct benefits.

Although some blockchain games and consumer applications have been launched, transaction processing capacity is not the main bottleneck. For example, in the gaming sector, blockchain technology is mainly used for asset tokenization and open market trading, tasks that do not require extremely high transactions per second (TPS).

The advancement of infrastructure undoubtedly lays the foundation for Web3 innovation and the new application scenarios that may emerge in the future. However, based on the current development of the dApp ecosystem, killer applications that can truly attract mainstream users are still yet to appear.

Current Status of DeFi Development

The report states that "DeFi is still popular and growing," which is basically accurate for the situation in 2023, but the overall scale has not yet recovered to the levels of 2022. The current total value locked (TVL) in DeFi is about half of the peak in 2022.

Industry growth primarily comes from emerging areas such as liquidity staking, re-staking, and real-world asset tokenization (RWA). Institutional capital starting to flow into the DeFi ecosystem is also a positive signal.

However, in terms of user numbers, even the leading applications in DeFi have only a few thousand monthly active users. This suggests that the growth of DeFi is more attributed to the increase in average deposit value and the overall market capitalization, rather than a significant expansion of the user base.

The Intersection of AI and Crypto Assets

The combination of artificial intelligence and Crypto Assets shows great potential and is expected to promote a decentralized, community-centered AI development model. The correlation of traffic between the two fields may stem from their shared characteristics: emerging, promising, containing speculative value, and cutting-edge technology.

Web3, as a frontier of technological innovation, naturally attracts the interest of AI users, and vice versa. The user groups of these two industries share similar characteristics, both inclined to embrace new things.

Innovative concepts such as decentralized computing, computing power sharing, and collaborative AI agents are emerging, representing potential directions for the combination of AI and Crypto Assets.

Summary and Outlook

In 2024, the development of the Crypto Assets industry is mainly reflected in significant advancements at the technology and infrastructure levels. However, these innovations have not yet attracted the attention of a broader Web2 user base due to their specialization or targeting specific user groups such as institutional investors.

For novice investors seeking quick profits, these advancements may lack appeal, which also explains why areas like community tokens and prediction markets remain favored.

As time goes by, the market's expectations for airdrops and points programs have gradually become more rational, and users have begun to see them as a form of additional income. Similarly, the enthusiasm for the GameFi sector has also cooled, although some games have achieved certain success, there has yet to be a blockchain game that can compare with mainstream AAA titles.

Overall, the development prospects of the Crypto Assets industry remain optimistic, but we have not yet entered the true golden age of Web3. Innovation requires time to settle and accumulate, and there is still great potential for development and opportunity in the future.