2024 could be a really important year for the Web3 space. We started the year with a bang, as a long anticipated regulatory greenlight in the US spurred the market into action and rekindled hopes that we could see a greeted integration between crypto and traditional finance. Beyond that, this year we’re likely to see the industry making further strides towards improving scalability, as well as the utility and usability of Web3 services. On top of that a promising new trend is exploring ways to leverage the power of blockchain for real-world use cases.
Join us, as we’re taking a closer look at some of the top Web3 trends that are likely to dominate the Web3 industry in 2024 and beyond.
Greater integration with tradifi
Of course, we have to start with the exciting news that recently came from the US. Earlier this month, the US Securities and Exchange Commission approved 11 Bitcoin exchange-traded funds (ETFs), marking a watershed moment for the Web3 industry. The ETFs, including one from BlackRock, have since started trading, offering traditional investors exposure to the world’s largest cryptocurrency. More importantly, it paves the way for more crypto-based products to enter the traditional financial markets. If these new investment products are successful, they could pave the way for a greater integration of crypto and Web3 technologies. At the very least, the SEC’s approvals suggest that regulators may be starting to take the Web3 sector more seriously.
Another intersection of Web3 and TradiFi is real world asset tokenization – a trend that became especially prominent last year and is expected to grow even stronger in 2024.
Continued rollup maturation
This year, we expect to see further growth in the rollup space, as the technology matures and becomes even more capable. Last year, we saw the emergence of development stacks aimed at making it easier to build rollup chains. The success of Base, a rollup chain built by Coinbase using Optimism’s OP Stack, has demonstrated the potential of that model. We anticipate that rollup chain dev tools will play a key role in creating a rich, diverse and thriving rollup ecosystem.
Beyond that we expect to see further improvements in the ability of rollups to scale Ethereum. One major development in that respect is proto-danksharding, also known as EIP-4844. It aims to introduce temporary on-chain storage for rollups data, in the form of data ‘blobs’. These blobs will be deleted after a period of time, ensuring that on-chain space is not permanently occupied. This is expected to make rollup fees even lower as, thanks to proto-danksharding, storing rollup transaction data is poised to become significantly cheaper.
Decentralized physical infrastructure networks (DePINs)
One exciting narrative that started emerging towards the end of last year was that of DePINs, or decentralized physical infrastructure networks. Essentially, a DePIN app utilizes blockchain technology to help build networks to connect and manage physical devices in the real world and even leverage their combined power for various purposes. One of the more obvious applications of this model is using tokens to incentivize users to build and participate in such networks.
On these pages, we’ve talked about the ability of blockchain technology to facilitate the operations of distributed networks. After all, any blockchain protocol is already designed for that purpose. A Web3 network is a network of connected physical devices, it’s just that it’s designed to serve a very specific purpose. DePINs, on the other hand, are aiming to leverage blockchain and explore real-world applications of the technology beyond crypto. This is a promising new direction for blockchain that could massively increase the utility of the technology.
DePINs also could be the way to disrupt the centralized model in certain sectors. For example, a DePIN could be utilized to run a decentralized competitor of Uber, operated by a community of contributors instead of a giant corporation.
Last but not least, we expect Web3 devs to ramp up their efforts to improve the usability and user experience of Web3 products and services. One of the major hurdles to Web3 achieving mass adoption is the fact that using these products is often complicated, which can be intimidating for people. Last year much of the discourse in the Web3 space was centered around account abstraction, which is aimed at making wallets and other essential services on Ethereum more flexible and much easier to use. Further progress on that front is something that we definitely expect to see this year.