Pantera releases outlook for 2024: Bitcoin renaissance, rise of DeFi 2.0, social tokenization and other trends

1. The resurgence of Bitcoin ushered in DeFi 2.0

BTC’s market share increased from 38% at the beginning of the year to 50% at the end of the year, coupled with the unforgettable popularity , all of which have brought BTC back into investors’ sight again.

Pantera believes BTC has at least three major catalysts for a resurgence next year:

The fourth halving in April 2024

Institutional investors are expected to approve multiple Bitcoins Spot ETF

Enhancement of programmable functions, including Ordinals protocol and L2 and expansion solutions (such as Stacks and Rootstock)

Regarding the third point, Pantera predicts that there will be more Ethereum DeFi protocol transplants Come to Bitcoin and usher in DeFi 2.0.

2. New applications on the chain: Tokenized social services

Friend.tech and other social applications have successfully derived a new token economic model for the SocialFi field by integrating with Twitter accounts .

Pantera expects more experiments in the social space in the future, in which tokenization will play a key role. Fungible Tokens are expected to become a new form of loyalty points, while Non-Fungible Tokens (NFTs) may become an important form of personal social data and resources.

3. Traditional finance and DeFi interact more frequently

In addition to predicting that the adoption of Bitcoin spot ETF will significantly increase the adoption rate of institutions, Pantera believes that institutions will further seek tokenized RWA and Traditional financial (TradFi) products.

Just as BTC was previously mapped with WBTC and cross-chained to Ethereum, TradFi assets will also interact with DeFi more frequently, thus deriving the "TradFi-DeFi cross-chain bridge" project.

4. Cross-pollination of modular blockchain and zero-knowledge proof

Both modular blockchain and zero-knowledge proof have made significant progress in the past year, such as the recent Celestia mainnet, Espresso’s Arbitrum collaboration, etc.

Pantera believes that the combination of these two technologies will be an interesting trend in the future, and in consumer-related applications, zero-knowledge proofs may be more used in identity protection and privacy projects, such as those based on ZK decentralized digital identity.

5. More computing-intensive applications are on the chain, such as AI and DePIN

Pantera pointed out that expansion problems such as excessive on-chain fees have been solved, and the gas fee of Ethereum L2 is less than 0.02 US dollars. , Solana is several digits lower, so it can be expected that within the next year, computing-intensive applications that require a large amount of computing resources will become more economically feasible to run on the chain.

Pantera named several projects:

Hivemapper: Decentralized Google Maps

Bittensor: Decentralized Machine Learning Platform

Modulus Labs: AI generated NFT artwork

The Graph: On-chain knowledge graph plan

Realmsverse: Chain games on Starknet

6. Small public chains need to focus on specific applications

Pantera finally mentioned the competition situation of public chains. In fact, there is not much difference between L1 and L2 in terms of user experience. Solana and Avalanche can even directly compete with L2.

Also due to the same nature, the five major public chains such as Ethereum and BNBChain have locked 80% of the total TVL.

Pantera believes that public chains with smaller ecosystems must focus on specific vertical areas (such as social networking, games, DeFi) to maintain their advantages, thereby effectively becoming "application chains".

In fact, among the top 10 L2s ranked by TVL, dydx, Loopring, and Ronin are already application chains focusing on a single vertical field.

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