The year 2024 was marked by great progress for the industry as a whole, with global adoption rising and a general positive shift in political stance across the world towards our industry. Some statistics that represent this growth : the number of cryptocurrency wallets hit a new all time high of 400 million, stablecoins market cap exceeded $200 billion, users deposited $22 billion on the Binance platform over the year, and daily active users in crypto hit another monthly all time high of 18.7 million in December alone (up from 7.7 million earlier in the year). Additionally, US president-elect Donald Trump has frequently talked about the crypto industry in a very positive light and has reflected that in his choices for pro-crypto members of government, such as Paul Atkins for SEC Chair. Paul is well-known for his pro-business and is a strong backer of crypto, he will help shape and clarify key regulations for the industry.
In December, the Ethereum community started pushing for an increase in the network's gas limit. Currently, 10% of validators support raising the gas limit to more than 30M, which is expected to reduce Ethereum transaction fees by 15% to 33%. However, raising the gas limit too quickly may pose a risk to Ethereum's stability and decentralization. The ongoing conversation is an essential step in moving Ethereum to lower gas fees.
Stablecoin-heavy decentralized protocols also had a strong quarter, with Ethena being the frontrunner. World Liberty Financial, backed by Donald Trump announced that they are planning a long-term collaboration with Ethena Labs and will implement sUSDe into their platform. The outstanding supply of USDe grew to almost $6 billion during the month (making it the third-largest stablecoin globally), while yielding around 15% APY for its stakers due to the elevated funding rates that the protocol was able to capture as a result of generally favorable market conditions. Ethena also rolled out a new stablecoin product, USDtb, in collaboration with BlackRock, which will be backed by BlackRock’s BUIDL fund, with the aim of providing attractive yield to existing USDe stablecoin during negative funding rate environments. Stablecoin issuer Circle has announced its strategic partnership with Binance aiming to promote USDC across the platform. Through this alliance, Binance will also incorporate USDC into their treasury, showcasing the confidence they have in the stablecoin’s compliance and stability.
Ripple won final approval from NYDFS for its stablecoin (RLUSD) launch, which will happen on both the XRP blockchain and Ethereum. This marks a huge milestone for Ripple, allowing them to capture institutional market share and compete with USDT and USDC. Furthermore, the U.S. Financial Accounting Standards Board (FASB)'s fair value accounting standards for Bitcoin officially came into effect. The new standards allow companies such as MicroStrategy to use fair value measurement methods to more accurately reflect the actual value of Bitcoin assets. This will likely impact the ability for companies to adopt Bitcoin as a reserve asset.
As part of its Project Dama 2 and in partnership with ZkSync, Deutsche Bank announced its plans to build an L2 network on Ethereum to bridge the gap between blockchain transparency and regulatory compliance. Kraken launched its Ethereum L2 network called Ink, and planned to go live on mainnet in early 2025. Ink is built on the OP stack and will share a percentage of its sequencer revenues with Optimism. Also, Uniswap’s DeFi L2 solution, Unichain, is set to launch its public mainnet in early 2025 and will integrate into Optimism’s Superchain as well. Unichain’s mainnet will feature permissionless fault proofs to enhance security, using Flashblocks to reduce block times to 250 milliseconds, and will use a decentralized validation network to mitigate risks associated with single-sequencer architectures. Additionally, Coinbase’s L2 network Base, has been gaining a lot of traction, especially since the launch of the Virtuals ai-agent platform. Lastly, following HYPE and PENGU airdrops, Solana-based NFT marketplace Magic Eden airdropped $700 million worth of ME tokens to NFT users across Bitcoin, Ethereum, Solana, and Polygon ecosystems.
Portfolio company Movement launched a beta version of its mainnet along with its native token, MOVE. The token launch was very well executed, with a mainnet launch scheduled for Q1 2025. Portfolio company Sophon launched the mainnet of its consumer-oriented network, with over $500 million in TVL, a growing ecosystem of strategic partners, and over 120.000 node licenses purchased by almost 6000 unique participants. Similarly, Fuel Network had its token generation event and mainnet launch, which went equally successfully.Portfolio company StabIR secured investment from Tether, driven by the significant momentum in recent months for euro-pegged stablecoins and the EU’s MiCA framework. By integrating with Tether’s Hadron platform, StabIR aims to expand its MiCAR-compliant EURR and USDR stablecoins. DeFi stalwart Synthetix acquired portfolio company TLX, the ecosystem’s leading leveraged token platform, in a token-for-token transaction. The strategic acquisition marks the first end-customer, a revenue-generating product built on top of Synthetix that will be owned and operated by Synthetix. Beam achieved huge milestones: they announced their plans to debut Abu Dhabi’s first dedicated gaming fund with a $150 million target to fund and accelerate blockchain-based games and gaming infrastructure in the UAE, while also announcing the Beam Ventures Accelerator Program focused on developing UAE’s gaming ecosystem.