The rise of stablecoin payment solutions;
BTC L2 has great potential;
AI applications from speculation to value return;
security attacks are more precise.
In this 2024 annual summary report, we focus on blockchain security, stablecoin payment solutions, AI applications, exchanges, and BTCFi these technical directions.
We chose these directions not only because we believe they represent the future of the crypto industry, but also because these are the areas we have been deeply involved in and built over the past year, and they are also the focus of continued investment in research and development in the coming year. We will continue to invest resources to explore and promote the development of these tracks.
TL;DR
From Binance's sharp decline in market share (50.9%→42.5%) to $TRUMP's record of breaking $10 billion in market value in 24 hours, the market is redefining the core competitiveness of exchanges. Traditional scale advantages give way to efficiency drive, which indicates that the exchange landscape will usher in a structural change in 2025: a three-way competition among top CEXs, innovative small and medium-sized exchanges, and emerging DEXs.
In 2024, although the number of victim addresses only increased by 3.7%, the losses soared by 67%, with the highest single loss reaching US$5,548 million. Hackers have shifted from "casting a wide net" to "sniper-style" attacks, accurately locking on high-value targets. Their attack methods have become more professional and covert, greatly increasing the difficulty of defense.
Bitcoin L2is underestimated. Bitcoin L1lack of programmability, all innovation and funds are concentrated on L2, which is different from the L1/L2co-development model of Ethereum, which will eventually open up a trillion-level market. At the same time, all applications must be built on Bitcoin L2, including use cases with high security requirements, which means that the security requirements of Bitcoin L2 are much higher than those of Ethereum L2.
Stablecoins are undergoing a transformation from crypto asset tools to mainstream payment infrastructure.Stripe's acquisition ofBridgefor $1.1 billion is a landmark event in this transformation. Payment technology giants are beginning to reshape payment infrastructure through stablecoins, reduce payment costs and expand market coverage.
Stripe'sdeep meaning of this acquisition is that it has been promoted from a payment interface provider to an infrastructure operator. By obtaining a stablecoin clearing channel, Stripe can bypass traditional payment intermediaries and achieve autonomous clearing. The stablecoin payment market is being restructured. Full-service infrastructure providers represented by Bridgewill gain scale advantages through mergers and acquisitions, while regional APIservice providers will take a differentiated approach and compete in terms of rates, service scope and compliance level. Supporting infrastructure service providers like Cobowill focus on providing customized digital wallet technology, risk control and compliance management, and one-stop resource docking to help companies quickly build cross-border payment and collection capabilities for stablecoins.
There is a bubble in the AI track at present, but AI agents with practical value and execution capabilities will stand out in the future. The most successful AI agents will have their own decentralized payment solutions, just like a real business needs its own bank account.
The market opportunity for
AI
agentsis to create real value and have execution capabilities. The key is to find the fit between product and market (
). DeFiand games arethe most promising application areas for AIagents, and dedicated decentralized payment solutions will becomekey infrastructure for
AI infrastructure platforms need to have speed, scalability, and unique features. Similar to the head projects on the public chain, the success of the framework depends on the high-quality agents built on it. In the long run, the boundaries between the framework and the launch platform may gradually blur, breaking through the limitations of a single function.
Stablecoins and Crypto Payments
Stablecoins are undergoing a transformation from crypto asset tools to mainstream payment infrastructure. This transformation is reflected in two levels: bottom-up market demand and top-down infrastructure innovation.
On the demand side, taking emerging markets as an example,Castle Island Venturesjointly released a research reportshowing that in Brazil, India and other regions with underdeveloped financial infrastructure, stablecoins have gone beyond the simple attributes of cryptocurrency and are becoming a key tool for solving people's livelihood issues. Local residents use stablecoins for value preservation, payment, remittance and savings, effectively making up for the shortcomings of traditional financial services and coping with the challenges of local currency depreciation and inflation. This bottom-up adoption model proves the value of stablecoins as basic financial facilities. On the infrastructure side, Stripe's acquisition of Bridge for $1.1 billion marks the beginning of the reshaping of payment infrastructure by payment technology giants. Through Bridge's API services, Stripe has significantly reduced payment costs. For example, the fee for sending USDC on the Base network is less than 0.01 USD, compared to the average cost of 44 USD/USD for traditional cross-border payments. leaf="">pens, with obvious advantages. In addition, Stripe has also expanded its market coverage to regions with weak traditional financial infrastructure such as Asia, Africa and Latin America. For Stripe, this acquisition is not only an improvement in cost-effectiveness, but also a transformation from a payment interface provider to an "infrastructure operator".
From dependence to autonomy:Before acquiring Bridge,Stripe was essentially a payment interface provider, and all capital flows needed to rely onVisa,Mastercardand othertraditional financial systems. This reliance brings multiple layers of intermediaries (banks, payment networks, clearing houses), each of which adds fees and time costs. After acquiring Bridge, Stripe acquired its own "pipeline" (backend infrastructure), which can directly clear through stablecoins, bypassing the traditional intermediary system and realizing the leap from "interface provider" to "infrastructure operator". From complex to simple: Taking cross-border payments as an example, under the traditional model, if companies want to send stablecoin dollars to Latin American countries, they need to deal with complex issues such as uplink and downlink channels, legal currency infrastructure, KYC audits, and multi-currency liquidity management. Bridge packages these complex infrastructures into simple APIs, and companies only need to call APIs to obtain complete payment capabilities without having to deal with underlying technology and compliance issues in depth.
The market structure of stablecoin payment infrastructure is being restructured. Full-service infrastructure providers represented by Bridge will gain scale advantages through integration with technology giants; API service providers focusing on specific regions and industries will compete in a differentiated manner in terms of rates, service scope and compliance level; supporting infrastructure service providers such as Coboare focused on providing on-demand customized digital wallet technology, risk control and compliance management, and one-stop resource docking to help companies quickly build stablecoin cross-border payment and collection capabilities.
DEX and the rise of new exchanges
The monopoly advantage of the top exchanges is being broken. In each previous bull market, the top exchanges almost monopolized the profits brought by the market increment by virtue of the scale effect. However, data shows that this monopoly position is being challenged.
Take Binance as an example. The advantage of listing coins has been reduced. According to the "CEX Market Report 2024" recently released by 0xScope, Binance's spot market share has shrunk from 50.9% to 42.5% year-on-year, and its average return rate of listing coins has dropped by about
leaf="">10%, and the average return rate is-36%.This is because of the shortcomings of Binance's listing strategy, such as the generally high market value of listed projects and the late launch time, which led to weak prices. At the same time, the rapid rise of small and medium-sized platforms with flexible mechanisms andDEXis changing this pattern.
Further analysis found that the competitive advantage of exchanges is shifting from "scale effect" to "efficiency drive". Especially in emerging tracks such as Meme coins and community-driven ones, exchanges that take the lead in layout and keenly capture market opportunities (Alpha) can often achieve explosive growth in trading volume within 24-48 hours. The positive cycle of "rapid layout—word-of-mouth effect—user growth" is reshaping the competitive landscape of exchanges.
In addition to the efficiency advantage, technological innovation is also constantly narrowing the gap between exchanges. The counterparty risk exposed by the FTX incident has exacerbated the market's concerns about the security of exchange assets. It is worth noting that the current bull market is mainly driven by institutional funds, and such investors are particularly sensitive to risks and security. Therefore, for security reasons, institutional users tend to choose leading exchanges with compliance licenses.
However, with the emergence of technical solutions such as Superloop, this assumption is being broken. Even without a huge compliance budget, small and medium-sized exchanges can obtain the same level of security as compliance through technical solutions. Superloop achieves complete asset isolation through the asset mapping system: the user's actual assets are kept by the custodian, and the exchange can only operate the "mapping amount" of equal value, so that institutional users can enjoy the liquidity of centralized exchanges while their assets are always kept by professional custodians, fundamentally eliminating the risk of asset misappropriation.
While the competition landscape of traditional centralized exchanges changes, decentralized trading (DEX) is rising.With the maturity of on-chain trading infrastructure, more and more users and liquidity are flowing into the chain. DEX not only has natural advantages in terms of transparency and asset self-custody, but also begins to surpass traditional centralized exchanges in terms of actual usage experience such as transaction costs and liquidity. In particular, the innovation of hybrid order book-AMM models such as HyperLiquid has further blurred the boundaries between CEX and DEX, pushing the entire industry towards a more efficient and transparent direction.
In some niche areas, such as meme coin trading, decentralized exchanges (DEX) have shown obvious advantages. The explosive launch of the $TRUMPtoken issued by Trump is a vivid example. $TRUMPcompletely bypassed centralized exchanges and achieved a market value of hundreds of billions of dollars in just a few hours, relying solely on the power of decentralized platforms and communities. The case of $TRUMP shows that DEX can respond more agilely to rapidly changing market trends and provide users with a more convenient and efficient trading experience. The most powerful proof is that a large amount of SOL and USDC flowed out of CEX and poured into the on-chain DEX to buy $TRUMP. This user behavior reveals the lag of CEX in facing emerging market trends, and the advantages of DEX at the practical operational level.
It is expected that by 2025, the exchange industry will form a three-legged competition landscape of leading CEX, innovative small and medium-sized exchanges and emerging DEX, and each type of platform will find its unique value positioning in different market segments.
BTC Layer2 Undervalued
Bitcoin's second-layer network is undervalued,BTCFi will be repriced. L2 is not only the key to expanding the practicality of Bitcoin and promoting its transformation from "digital gold" to a multi-functional currency, but also an important guarantee for maintaining the long-term security of the Bitcoin network. Different from Ethereum L2, Bitcoin L2has a larger market size and capital volume ("All in L2"), as well as higher security requirements. These factors will completely reshape its value assessment system and eventually open up a trillion-dollar market.
Although the native design of the Bitcoin protocol emphasizes security and decentralization, it is far from enough to be just "digital gold". Even the storage function requires stronger privacy protection, self-custody and scalability support. These needs must be met through the Bitcoin second-layer network, otherwise users will turn to centralized services (relying on centralized custody solutions, multi-signature custody or wrapped tokens of other public chains), which goes against the original intention of Bitcoin.
More importantly, the Bitcoin network faces security challenges brought about by the decreasing block rewards, while the settlement needs and data availability needs of the second-layer network can naturally drive up transaction fees, thereby maintaining network security.
Compared with Ethereum's second layer, Bitcoin's second-layer network has unique advantages:
1. Larger market size and capital volume:
As the world's largest encrypted asset, Bitcoin's current base market value is more than 4.9 times that of Ethereum. However, Bitcoin's L1 lacks programmability and cannot directly support complex applications such as DeFi and privacy tools, which means that all innovation must occur on L2. This is very different from the situation in the Ethereum ecosystem where innovation and funds are dispersed across L1 and L2. In the Bitcoin ecosystem, all incremental funds will flow to L2. This “All in L2” feature, coupled with Bitcoin’s significantly larger market capitalization, will make it possible to “BTC L2 flips ETH L2”. Shenyu predicts that the total market value of the BTCFi track is expected to reach tens of billions of dollars in the short term, and may exceed one trillion dollars in the long term, even surpassing the historical peak of the Ethereum ecosystem.
2. BTC L2 has higher security requirements
Ethereum L2and Bitcoin L2have different development focuses. Ethereum L2is mainly committed to solving the problems of fast delivery and low transaction fees, while Bitcoin L2focuses more on security. Due to the lack of programmability of Bitcoin L1, almost all applications occur on L2, including large transactions with extremely high security requirements. This means that Bitcoin L2 must carry all use cases with high security requirements and bear all the security responsibilities that come with it.
Especially for risk-sensitive traditional institutional users, they tend to choose solutions with fully verified security. To meet this demand, some companies are actively developing and deploying more powerful security infrastructure to support the development of Bitcoin L2. For example, Cobo provides enhanced security for Bitcoin through MPC multi-signature technology and Babylon BTC Staking API, helping developers and users reduce risks and enhance security for BTC L2 solution trust.
Crypto security: attackers turn to large-scale precision sniping
2024 a single stolen amount of up to 55.48 million US dollars, highlighting the severity of the security situation in the encryption industry. Although the number of victim addresses increased by only 3.7%, the annual losses increased by 67% to $494 million. This shows that hackers have turned to precise targeting of high-value targets and security threats have become more targeted.
Scam Sniffer data show thatin 2024,the losses caused byWallet Drainer (a malware deployed on phishing websites) attacks will reach$494 million,a year-on-year increase of67%. Security threats have shifted from dispersed attacks to precise sniping. Throughout the year, there were 30 major thefts worth over one million US dollars, with total losses reaching 171 million US dollars. The largest single stolen amount was as high as 55.48 million US dollars, while the victim addresses only increased by 3.7% to 332,000 addresses, which means that attackers are more inclined to target high-value targets. The attackers' methods are also more professional. Attackers continue to innovate and use a variety of means such as wallet standardization processes, legitimate contracts, and XSS vulnerabilities to bypass security detection. In terms of signature methods, it has been expanded from a single Permit to multiple methods including setOwner. At the same time, the application of AI technology makes phishing content more deceptive. It is worth noting that the number of Wallet Drainer attacks in the second half of 2024 decreased, which may indicate that attackers are turning to more covert attack methods, such as malware.
With the popularization of new technologies such as account abstraction and automatic proxy, especially the surge in on-chain proxies in the EVMecosystem, security architecture faces unprecedented challenges. Traditional incremental security solutions have been unable to cope with the increasingly complex threat environment. In this context, enterprise-level security standards have gradually become an industry trend, such as the threshold signature technology based on Cobo MPCmulti-party computing, which ensures asset security while maintaining high performance through intelligent risk control. This reflects that cryptographic security has shifted from static defense to dynamic game with attackers, and a more proactive and comprehensive security system is needed to cope with evolving threats.
AI x Crypto: From Hype to Value Return
The crypto market is undergoing a transformation from meme coin hype to AI agent applications.DeFi and games are AI agents with the most potential application areas, and dedicated decentralized payment solutions will become AI agents' autonomous operation key infrastructure. While the market is currently frothy, AI agents with practical value and execution will stand out in the future. The most successful AI agents will have their own decentralized payment solutions, just like a real business needs its own bank account. This will be a challenging but also opportunity-filled space. The crypto space is undergoing a paradigm shift from speculative meme coins to more practical AI agents, largely due to people realizing the potential of AI technology to change the crypto ecosystem. While the market size of meme tokens is still huge ($120.3 billion), the AI agent sector ($15.8 billion) is rapidly emerging, attracting a lot of investment and innovation.
In the AI x Crypto field, competition is mainly concentrated in three categories:
•Agent: Similar to an application, it performs specific tasks, such as trading, analyzing data, or generating content.
•Framework:provides tools and environment for developing and deploying agents, like a "factory". The success of the framework depends on the excellent agents built on it.
•Launchpad:provides funding and exposure opportunities for agent projects, just like a "casino". In the long run, the boundaries between frameworks and launchpads may gradually blur.
However, the current
AIindustry is in a huge bubble, most agents lack practical value, and the framework and launchpad markets are also saturated. It is expected that 90% of AI projects will eventually fail. Many speculative AI agents will disappear and the infrastructure will undergo a major reshuffle. In order to win the competition, AI infrastructure platforms need to have speed, scalability, and unique features. In addition, similar to the head projects on the public chain, each successful framework is likely to breed one or two head agents, giving value to the framework and driving up the price of its token.
The market opportunity for AI agents lies in creating real value and having execution capabilities. The key is to find the fit between product and market (
PMF
).
If practicality and value accumulation are taken as considerations, DeFi may be the first application category to achieve PMF AI . DeFi agents can solve the complex problems of cryptocurrency operations and simplify the interaction between users andDeFi protocols by converting natural language intent into executable commands.DeFi agents will evolve through three stages, from simple interaction to autonomous execution to intelligent research, and eventually become professional investment advisors, providing users with data-driven decision support.
GamesNPCsalso provide an ideal testing ground forAI agents. By giving NPCs independent economic identities, autonomous decision-making capabilities, and social interaction attributes, AI agents can enhance the immersion and playability of games.
From DeFito gamesNPCs, AI agents are undergoing an evolution from simple execution to autonomous decision-making. Autonomous decision making means that AI agents will operate autonomously in the real world for the purpose of survival, such as paying for their own computing power. This evolution can be achieved by introducing economic constraints to AI systems. For example, in the case of Nous Research, when agents cannot afford the cost of reasoning, they will "die", which forces them to plan task priorities more effectively. This will challenge the existing financial infrastructure and give rise to the need for decentralized payment solutions.
To support the autonomous decision-making and operation of AIagents, decentralized payment will become the next important AIagent infrastructure. The existing financial infrastructure is designed for human users, and its strict identity authentication requirements and complex compliance processes hinder the development of AIagents. The market needs professional solutions that support efficient transactions and asset management between agents. Companies such as Coinbase, Skyfire, and Stripe have already begun to deploy in this field. This indicates that the decentralized payment track will usher in new development opportunities.
Reference source:
1.《Castle Island Ventures Jointly released research report":https://coboargus.substack.com/p/cobo-14
2.0xScope《2024 year CEX Market Report》:https://www.0xscope.com/blog-posts?slug=the-2024-cex-market-report
3.《Scam Sniffer 2024: Phishing attack caused 4.94 100 million dollar loss》：https://drops.scamsniffer.io/zh/scam-sniffer-2024-%E9%92%93%E9%B1%BC%E6%94%B B%E5%87%BB%E8%87%B4-4-94-%E4%BA%BF%E7%BE%8E%E5%85%83%E6%8D%9F%E5%A4%B1/
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