Author: Momir @IOSG
Schrödinger's cat is a very interesting thought experiment - in simple terms, this law summarizes that in quantum mechanics, macroscopic objects can be in multiple states until you observe it. In Schrödinger's cat experiment, a cat is placed in a sealed box. Before opening the box, the cat can be in a superposition of alive and dead. Until you open the box, everything will "collapse" into one result: either alive or dead.
This experiment is actually quite similar to the current cryptocurrency market. Just like the cat in the box is in two states at the same time, the current crypto industry is also in an uncertain stage, and there are many possibilities that will coexist in the future. And only when the market changes or external factors intervene will these possibilities become a clear reality.
BTC
1. Survival
BTC has the potential to consolidate its position as a global reserve asset and truly realize its vision of "digital gold". But the realization of this vision is very dependent on several key factors:
The US government incorporates BTC into its national reserves and starts purchasing BTC (low probability).
Multiple governments or central banks from the top 20 economies use BTC as a reserve asset (low to medium probability).
More and more global listed companies are influenced by the success of MicroStrategy and begin to convert large amounts of cash reserves into BTC (medium to high probability).
Systemic shocks (such as the collapse of a government or bank) increase the attractiveness of BTC as a hedge against risk, further strengthening its role as a "safe haven asset".
Second, Death
If the above key scenarios are not achieved, BTC's future momentum may be weakened:
Government indifference: If large economies are not interested in BTC, market sentiment may become pessimistic, and everyone's attention will shift from chasing new highs to whether big players like MicroStrategy will cash out or even sell.
MicroStrategy's risks: Now, MicroStrategy is a strong supporter of BTC, but if its leveraged operations lead to a sharp sell-off in the market, it may become a "burden" for BTC. Do you remember how giants like Alameda Research and Three Arrows Capital (3AC) were killed by the market? Once the liquidation line is triggered, shorts will chase the target like smelling blood, triggering waves of sell-offs. If MicroStrategy also goes this way, the situation may get out of control.
Technical issues: Whether BTC can cope with the challenges of quantum computing is also a big question. If BTC cannot adapt to this new risk, it will not be able to serve as a secure and tamper-proof value storage carrier.
BTC is now like a quantum superposition state, either becoming the cornerstone of the crypto economy or being regarded as an outdated technology - it all depends on the market attitude and will eventually lead to which result it will "collapse" into.
ETH
1. Survival:
ETH is expected to dominate the blockchain field in the future and further strengthen its position as a "programmable BTC alternative". So why might institutional investors pay more attention to ETH next? There are many reasons:
Institutional interest: ETH has a very high level of decentralization. In addition to BTC, it may be the only blockchain asset that governments and institutions are willing to accept.
Anti-quantum computing ability: In the long run, ETH is more likely to smoothly transition to the anti-quantum technology stage than BTC. We expect ETH’s transition to be much smoother than BTC’s.
Sustainable Economy: ETH has a large amount of on-chain activity, generating natural fees that can provide a stable income stream for validators and miners. Its flexible token economics can adjust between inflationary and deflationary modes according to market demand, making it far more sustainable than BTC’s model in the long term.
Developer Ecosystem: ETH attracts the most developers and has been the preferred ecosystem for development teams for seven years.
Diverse Leadership: ETH has multiple teams driving its adoption, including Base (arguably the most important crypto institution in the United States), Arbitrum, ZkSync, Starknet, etc.
Resistance to Centralization Risk: ETH does not need to worry about a single entity like MicroStrategy monopolizing the market voice like BTC does.
Blockchain Trilemma: ETH is the only public chain that has successfully balanced the blockchain trilemma - it has achieved decentralization, scalability, and security through innovative solutions like Rollups. This makes ETH the most technologically advanced and versatile blockchain, suitable for both institutional and retail users.
Ecosystem growth: ETH has a large and active ecosystem. The momentum created by such a large ecosystem can maximize the benefits of ETH under new policy benefits and clear regulatory policies.
Second, death:
In the worst case, ETH may miss the entire cycle due to some internal and external risks:
Leadership, leadership, leadership:
Leadership vacancy: Because the ETH community is large and decentralized, this feature allows some opinion leaders to constantly create confusion among the ETH community and spread contradictory statements, making the ETH ecosystem more fragmented.
Cultural challenge: The new US government advocates a cultural shift - it shifts from "woke culture" to "down to earth." This shift means that society is moving away from political correctness and moral discussions to unconventional communication. The culture of ETH is often considered more "awakened" than other ecosystems. It emphasizes inclusion, political correctness, and community-led moral discussions. While these values contribute to diversity, they sometimes bring some challenges (inefficient communication, moral judgment, hesitation in making bold decisions). Some louder members of the community often play the role of moral court, which limits direct dialogue and may also create friction when taking a more forceful leadership style.
Challenges of competing chains: Competitors like Solana continue to challenge ETH's dominance. A large number of public chains outside the ETH ecosystem have flourished. If this trend continues, ETH's position as the preferred platform for attracting outstanding developers will be further challenged.
In the future, ETH may be hailed as an upgraded version of BTC and become the king of blockchains; or it may get into trouble because of some of its bloodline characteristics.
Solana
1. Survival:
Solana can shine with its flexibility and active community:
The combination of Meme and AI: In 2025, Meme will still dominate the economic attention of the currency circle. Solana is leading a new trend under this Meme trend - in response to the rapid growth of AI Agent in the industry, the very forward-looking Solana team immediately introduced Agent SDK.
DePIN: Solana's years of layout in the DePIN track can finally bear fruit. With the final landing of a large number of DePIN solutions, Solana has the opportunity to become a leader in integrating blockchain with DePIN.
Developer leadership: Solana focuses on cutting-edge verticals and rapid innovation in the industry, thereby challenging ETH's dominance among developers. Sonala's focus on the developer community makes it a game-changer among many ETH challengers.
Institutional certification: If the Solana ETF is approved, it will be a crucial milestone. This shows that Solana's ecosystem has been recognized by institutions, and its position among institutional and retail investors will be further enhanced.
Second, death:
From hunter to prey: Solana has experienced a stunning reversal in the past 18 months. Its alternative roadmap and calm response to the FTX crash have enabled it to regain its place among the leading blockchains. But now Solana is no longer the dark horse, but a player with a bit of "boss" temperament. As a result, the attention of speculative investors has begun to turn to its opponents, such as Sui, Hyperliquid, Aptos, Monad, etc. Looking at these emerging chains, they all claim to provide fast and integrated solutions, and each one is challenging Solana's position.
Over-betting on Meme: Solana's rise is inseparable from Meme and speculation. While this strategy has successfully attracted market attention, it also brings Solana the risk of a possible decline in speculative enthusiasm. Without sustainable on-chain activity (such as a thriving DeFi ecosystem or other lasting narratives), the decline of Meme will severely hit Solana's on-chain economy. The attention economy is inherently very short-lived, and the long-term growth of an ecosystem cannot be overly dependent on market attention.
Developer stickiness: In 2022, Solana experienced the largest loss of developers in the history of blockchain, and the public's concerns about the long-term growth of Solana's ecosystem also come from this. Solana's success in the past 18 months can be attributed to speculators, but during this time we remain skeptical about whether Solana has cultivated a loyal and resilient developer community. When competition intensifies in the next few years, an excellent developer community will be a moat for Solana to maintain its leading position.
Solana is at the crossroads of survival and death: its flexibility, active community, and innovation capabilities give it the potential to break ETH. But in the face of increasing competition, speculation, and developer stickiness issues, whether Solana can maintain momentum will determine whether it can continue to dominate the market.
2.1 Crypto x AI
Crypto x AI is the most innovative and dynamic field in the industry in recent times. It has attracted almost out-of-circle market attention and provided a very wide range of imagination space. Sovereign AI (AI systems driven by decentralized crypto infrastructure) represents a revolutionary opportunity (but in fact, there are many risks in giving AI so much power). These systems can achieve true autonomy and use non-custodial wallets to interact with other agents and humans on the chain. We will even see AI agents in the future purchasing human services when they need to perform off-chain tasks.
A few months before AI agent became the focus of the market, we had already written about the potential of this field: The Agent Wars: Silicon Valley Titans vs. Crypto Challengers (Link: https://x.com/momir_amidzic/status/1825895123315458281)
In addition to AI Agent, many other fields in Crypto x AI are also worthy of our attention, and we have also shown them in the Crypto x AI industry map in June 24:
2.2 DePin
DePIN is a highly innovative and diverse field. It combines the crypto-economic model with off-chain hardware to solve many challenges in traditional industries.
Core Target Industries and Application Scenarios
The DePIN project covers multiple industries:
In edge computing, DePIN provides distributed processing capabilities for latency-sensitive applications.
In energy and power infrastructure, DePIN can incentivize the adoption of renewable energy.
In wireless networking, DePIN focuses on community-driven 5G and IoT connectivity, bypassing the limitations of traditional telecom providers.
DePIN supports decentralized crowdfunding solutions for some other important industries, such as mapping and high-precision positioning services.
In computing and storage, DePIN provides a decentralized alternative to traditional cloud services, providing secure data storage and processing.
CDN can achieve cost-effective and scalable digital content distribution through DePIN.
Data scraping projects like Grass can build a network of millions of nodes through token incentives. It can use the Internet bandwidth contributed by participating nodes to scrape massive amounts of data.
While DePIN is a very promising field, not all DePIN projects are equally promising, and the success of a specific project is highly dependent on itself.
We are full of expectations for DePIN projects that can provide clear and measurable value (such as reducing costs, improving efficiency, or entering undeveloped markets). The success of DePIN often comes from the new business models it implements, which cannot be replicated by centralized systems. This advantage allows projects to have better market penetration, distribution, and accessibility. DePIN can also drive cost efficiency and better unit economics by reducing operating costs or improving resource utilization, making its decentralized model more competitive and sustainable. In addition, capital expenditure optimization is an important advantage of the DePIN project because it spreads infrastructure costs to the community through token incentives, thereby achieving faster expansion and wider participation.
On the other hand, we should try to avoid DePIN projects that improperly use tokenization. Their failed token economics often lead to unsustainable ecosystems. Instead of bringing actual efficiency gains or improvements over traditional approaches, some projects’ tokens rely solely on token incentives to mask underlying inefficiencies and subsidize usage costs in the short term. Tokenization alone cannot justify decentralization, and sometimes the results are worse than the existing centralized model.
2.3 Payments
Stablecoins have become a mainstream payment medium in the crypto industry. And due to their programmability, cross-border practicality, and increasingly clear regulatory frameworks, stablecoins are expected to become the standard settlement currency for global payments.
While stablecoins have obvious advantages over fiat currencies in terms of programmability and cross-border liquidity, wider adoption is still constrained by regulatory challenges and inefficient on- and off-chain mechanisms. However, the crypto-advocating U.S. government may provide regulatory clarity and create a healthier environment for efficient, liquid, and low-cost crypto-fiat transactions.
Short-term (1–3 years): Remittances and consumer applications
Stablecoins will first dominate cross-border remittances, providing a faster and cheaper alternative to SWIFT. Crypto-linked debit/credit cards (Visa/MasterCard) will also simplify spending and build a bridge between on-chain wealth and real-world transactions. This will benefit those who are not part of the US dollar banking system, individuals who have difficulty accessing traditional payment cards, and cryptocurrency holders who want to spend their assets conveniently.
Medium-term (3–7 years): Business adoption
Businesses will increasingly adopt stablecoins due to their low fees, instant settlement, and programmability. Companies will be able to seamlessly switch between crypto and fiat, offering customers two payment options. This dual-track approach will increase efficiency and further integrate stablecoins into mainstream commerce.
Long-term (7 years and beyond): Pay taxes with stablecoins
Stablecoins will become mainstream fiat currencies, widely accepted for paying taxes, eliminating the need to convert them into fiat. By then, stablecoins will subvert traditional financial infrastructure and promote low-cost P2P transactions between consumers and merchants, thereby significantly reducing dependence on banks and credit card companies.
2.4 Consumer Applications
The field of consumer applications is very exploratory, but also more difficult to define, and often overlaps with other fields such as AI, DePIN, and payment. This field covers a wide range of applications, including but not limited to AI-driven consumer solutions, consumer-oriented DeIN projects, and payment solutions designed for consumers.
In addition to actual application scenarios, consumer applications also have speculative and gamification elements in the crypto field. A very important category here is blockchain games. They incorporate speculative economic elements and Memes and are still one of the most successful consumer interaction experiments in the industry. These speculative applications often blur the lines between entertainment, finance, and practicality, creating unique opportunities for innovation.
Looking forward, new experiments combining crypto with consumer-oriented applications will bring more opportunities. Game mechanics that incorporate economic incentives have shown great potential, providing new ways to attract users and drive adoption. The design space in this space is vast, and we expect it to bring breakthrough innovations in 2025.
1. Usual
2024 was a very successful year for Usual, which reached $1.5 billion in TVL in just six months and successfully ranked among the top five stablecoins. The governance token was also listed on Binance, the world's largest CEX. Their fierce momentum has not stopped, and Usual is expected to break through the top 3 in the stablecoin market in the next 12 months, shoulder to shoulder with giants such as Circle and Tether. Usual's scalability is on par with its competitors, and their ambitious goals seem within reach.
On the DeFi side, Usual's strategic partnerships with Ethena, Ondo, and M0 will drive the next stage of growth. It is worth noting that the yield product between Ethena and Usual can adapt to various market conditions - providing high crypto-native yields in bull markets and stable RWA-backed returns in bear markets. Meanwhile, on the CeFi side, the integration of Usual as collateral is just getting started. Usual assets will be deeply integrated into the foundation of the CeFi and DeFi ecosystems. As these integrations continue to advance, strong network effects will accelerate adoption and application.
Looking forward, the Usual team remains focused on building a vibrant ecosystem around Usual assets. With their outstanding execution, we can fully believe that innovation and breakthroughs from Usual are just around the corner.
We have previously published Usual's Thesis: Link, and our story with the Usual team "Unusual": Link
2. BTC Ecosystem
Although BTC is the oldest and most mature cryptocurrency, its life is still in a very early stage. We support a range of groundbreaking projects around the BTC ecosystem that are shaping the next frontier of BTC development:
Babylon: A cryptographic breakthrough that allows trustless BTC staking, enabling BTC holders to secure external networks and earn rewards without relying on intermediaries.
BoB: A hybrid Rollup that leverages BitVM v2 for trustless BTC bridging. BoB creates a secure hub by combining Babylon's fast finality with ETH's data availability, allowing BTC to freely integrate with ETH's DeFi ecosystem.
Solv: The largest BTCfi application, redefining BTC's role in decentralized finance by unlocking returns for BTC holders and driving the development of BTC-based financial products.
2025 is a critical year, and several years of innovation and development in the BTC ecosystem will be transformed into production practice. This is one of the real needs that we can test for the prosperity of the BTC chain economy. We are confident in the evolution of BTC from a value storage tool to a trustless staking, DeFi and cross-chain interoperability ecosystem.
3. AI track: Theoriq, Phala, Hyperbolic
Theoriq is an AI DePIN project that is redefining the future of AI collaboration. In the Theoriq framework, AI agents can not only work independently, but also collaborate as a dynamic collective. This forward-looking framework enables AI agents to work together to solve complex problems that a single agent system cannot solve. Theoriq introduces agents with memory functions, advanced evaluators and user-friendly tools, and ensures that human feedback is always at the core of agent development, thereby driving compound growth in value. This forms a virtuous circle: agents continue to learn, adapt and self-organize while collaborating effectively, creating an ecosystem that continues to improve.
Theoriq operates in a self-regulating environment by integrating crypto-economic incentives. Specifically, agents are rewarded for good behavior and punished for mistakes, which maximizes the reliability and accountability of the framework. We led the seed round of Theoriq in 2022. At that time, Crypto x AI was still a non-consensus idea. Two years later, we are very happy to see Theoriq enter production.
Phala has always been a long-term investment project for us. As we recognize the great potential of Phala in shaping the future of Crypto x AI, we recently increased our investment in it. As a pioneer in TEE technology, Phala has a unique advantage in meeting the needs of AI agents for secure infrastructure.
AI agents rely on TEE technology to securely manage key assets (such as wallets and social accounts) to ensure privacy, trust, and efficiency without sacrificing performance. In an environment where almost all Infra projects today are exploring how to integrate TEE technology, Phala's superior solution is preferred by a large number of developers due to its reliability and scalability.
Hyperbolic is revolutionizing the field of AI infrastructure. As the leading GPU network, Hyperbolic focuses on inference and provides verifiable inference tools. In addition, they have pioneered a GPU layer that allows AI agents to rent GPUs through the SDK. This innovation enables GPU-rich AI agents to easily access the computing resources they need, thereby driving more complex and efficient workflows.
Hyperbolic Inference Cloud is a platform where anyone can contribute GPU resources; it completely abstracts the inconsistency of GPU hardware and makes GPUs truly interchangeable. Hyperbolic has performed well and has become the first project to provide some of the most advanced open source AI models on its platform.
4. Gelato
Five years ago, we recognized the huge potential of Gelato early on. We led the seed round of investment in Gelato and continued to follow up in subsequent investment rounds. Over the years, Gelato has quietly developed into the AWS of Web 3.0. Today, if you think of three crypto projects, at least one will use Gelato's technology stack in the backend. Gelato has already achieved success in terms of products, with a strong and versatile technology stack including RaaS, Functions, Relay, VRF, Account Abstraction, RPCs, Bridges and Oracles. Its solutions cover a wide range of areas from payments, DeFi, infrastructure, consumer applications to AI agents.
2025 will be the year when Gelato moves from silently supporting the ecosystem to telling its story, effectively marketing itself and building attractive token utility. It is expected to be recognized not only as a key infrastructure layer, but also as a mainstay of reliability and innovation in the Web 3.0 space.
5. Staking and Re-staking
We have been actively investing in the two major themes of the ETH ecosystem - the staking and re-staking ecosystem of "The Merge" and "Shanghai Upgrade". The related projects we have laid out are EigenLayer, ether.fi, Kiln, Renzo, Babylon and AltLayer, four of which have been listed on Binance. EigenLayer and ether.fi rank third and fourth among all DeFi protocols with TVL of $15.7 billion and $8.4 billion, respectively. In addition, ether.fi and Kiln are the fourth and fifth largest staking service providers for ETH, respectively, with Kiln managing $13 billion in assets.
Looking back at the development of the ETH staking and re-staking ecosystem, we can clearly see that the value of ETH as a versatile asset is constantly being strengthened and expanded.
As the ETH roadmap advances and the staking ecosystem matures, its importance in the blockchain industry continues to grow. Through staking and re-staking, ETH not only provides a solid foundation for network security and decentralization, but also demonstrates its unique attributes as a capital, consumer product, and value storage asset by expanding economic security and ecological richness.
The fate of the crypto industry in 2025 is like Schrödinger's cat. Its success or failure is not determined by its own characteristics, but by how it is viewed by the outside world. On many levels, value is a construct shaped by collective consensus. BTC may be “digital gold,” ETH may be the backbone of decentralized innovation, and Solana may be the nimble disruptor, but their ultimate fate depends on the narratives we choose to accept and the meaning we give to their existence.
In a world of infinite possibilities but limited attention spans like Crypto, market perception becomes the ultimate currency. Crypto markets are driven not just by technology or utility, but by belief, trust, and stories that capture our imagination. What we pay attention to determines what survives and thrives, just as the act of observation causes Schrödinger’s paradoxical cat to collapse into a single state. The collective gaze of markets, institutions, and individuals will determine which futures win out in crypto and which will fade away. Ultimately, it will be our perceptions and opinions—and the stories we tell ourselves—that will determine the cornerstones of the future digital economy.
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