a16z 2024 Crypto Assets Report Interpretation: Balancing Optimism and Reality

The annual "Crypto Assets Status" report released by a16z has sparked widespread discussion in the industry. The report conveys a positive and optimistic message, but we need to take a more comprehensive view of the market situation.

Adoption of Crypto Assets

The report begins by stating that "the activity and usage of Crypto Assets have reached an all-time high." However, the number of active addresses does not always accurately reflect the actual number of users. One address may not represent one person, and one user may possess multiple addresses. For example, memecoin traders often use multiple wallets, and the daily issuance of new tokens also increases the number of active addresses.

A more meaningful metric may be the traffic of websites related to Crypto Assets. Currently, CoinMarketCap has a monthly visit count of about 74 million, CoinGecko about 23 million, DEXScreener about 13 million, and DEXTools about 6 million. These figures indicate that while certain blockchains attract new users, the overall number of retail investors does not seem to have increased significantly.

The growth of mobile encryption wallet users seems optimistic, but it is necessary to consider the high proportion of mobile devices in network traffic in many emerging countries. For example, Nigeria at 86%, India at 79%, and Argentina at 57%. This reflects a broader adoption of Crypto Assets in emerging countries, which has always been the goal of Web3 and DeFi.

Killer Applications of Crypto Assets

The report identifies stablecoins as one of the main "killer applications". Stablecoins indeed have the advantages of fast transfer speeds and low costs, and more and more countries are establishing relevant legal frameworks. The trading volume of stablecoins surpasses that of Visa, but they are mainly used for large transfers rather than daily small payments.

Although stablecoins are undoubtedly important applications, it seems that this year has failed to launch more innovative killer applications compared to the breakthroughs in DeFi a few years ago.

Infrastructure

The improvement of infrastructure lays the foundation for future innovations, but ordinary users have not yet experienced significant benefits. Although some blockchain games and applications have emerged, transaction processing capacity is not the main bottleneck. For example, the tokenization of game assets and open markets do not require extremely high TPS.

Infrastructure advancements have created opportunities for Web3 innovation, but considering that the most popular application this year might be Hamster Kombat, the development in the dApp space still has room for improvement.

DeFi

The total locked value of DeFi ( TVL ) has increased, but it has not yet reached the levels of 2022. Even considering price factors, the current TVL is about half of the peak in 2022. The growth mainly comes from new areas such as liquid staking, re-staking, and RWA, with institutional capital starting to flow in.

Taking Lido as an example, it has about 6,000 active users per month. This indicates that the recent growth of DeFi is mainly driven by the increase in average deposit value and overall market capitalization, rather than a significant expansion of the user base.

AI and Crypto Assets

AI and Crypto Assets are at the forefront of technological innovation, attracting similar user groups. The combination of the two may drive more economical, community-centered AI development. Some innovative projects like Aethir, Compute Labs, Grass, and Theoriq demonstrate the potential of decentralized computing, resource sharing, and collaborative AI agents.

Summary

In 2024, the development of the Crypto Assets field will be mainly reflected in technological innovation and the improvement of infrastructure. However, these advancements have limited appeal to ordinary Web2 users, as they are often highly technical or targeted at specific groups such as institutional investors (.

Newcomers interested in quick profits may be more attracted to memecoins and prediction markets. The popularity of airdrops and reward programs has gradually declined, and users now see them as a form of additional income. The GameFi sector is also becoming more rational, and there have yet to be blockchain games that can compete with mainstream AAA titles.

Although the industry as a whole remains optimistic, we have not yet entered the golden age of Web3. Innovation takes time to mature, and there is still immense potential for us to explore in the future.

![[Stable Dog Original] Supplementary Analysis Behind Optimism: a16z's 2024 Annual Crypto Assets Report])https://img-cdn.gateio.im/webp-social/moments-1bdb9a4ecc6c328192da9e49232f42f1.webp(