Restaking, Layer3, and AI: Top 4 Trends Set To Takeover DeFi In 2024

The Web3 economy is driven by use cases, innovations, hype, and trends. User activity is the foundation that shifts weight in favour of either of the four. Thus, it is a key metric to evaluate the growth potential of a project or a sector as a whole.

Trends dictate price movements in the crypto market (especially the bull market). We all are witness to the unprecedented hike in the prices of metaverse and NFT projects during the previous bull run. Leading gaming projects like Sandbox ($SAND) and Axie Infinity ($AXS) provided investors with over 16,000% returns during the 2021 peak.

The takeaway? Staying ahead of trends is one of the best ways to make it big in the bull market. I am unearthing the top 4 trends that can do a repeat of the P2E or metaverse boom in 2024.

Trend 1: Re-Staking

Science is yet to develop a technology that makes a human omnipresent (unless you are a mystic disguised as a degen 😛). However, re-staking enables your funds to be omnipresent.

Introduced by EigenLayer, restaking allows Ethereum HODLers to boost their earnings by using their staked ETH to secure protocols other than ETH. ETH HODLers have been staking $ETH since the emergence of the project. Ethereum has a staking market cap of more than $223B. However, once staked, over 16M ETH tokens sit idly, safeguarding the network.

Further, EigenLayer allows users to earn points by staking Puffer ETH (Puffer Finance), rswETH (Swell Network), and ezETH (Renzo Protocol)

Restaking creates a win-win opportunity for both HODLers and protocols, unlocking additional wealth-generation opportunities. This essentially means $ETH worth billions entering active circulation. With more new projects following the path of EigenLayer, restaking could very well be one of the top trends to dominate the 2024 bull run.

Trend 2: Layer 3

The blockchain trilemma has been a massive challenge since the inception of the blockchain industry. The emergence of Layer 2 chains like Arbitrum, Polygon, and Avalanche was aimed at boosting scalability. Clearly, there were many takers of Layer 2 as they improved scalability and enhanced overall efficiency. The increased adoption of Layer 2 projects was reflected in the price rally of tokens line $MATIC (Polygon) during the previous bull run.

Layer 3 solutions intend to take scalability to the next level by introducing customization and interoperability to facilitate the deployment of dApps. As blockchain nears mainstream adoption, the architecture has to be made flexible to get future-ready. That’s where L2 solutions come into the picture.

Emerging DEXs like Syndr are developing their own L3 chains to facilitate institution-grade derivatives trading with Web2-like user experience, with the end goal being accelerated adoption. It is only a matter of time before L3 chains witness an L2-like rise in adoption and hype.

Trend 3: AI

2022 saw a mini rally led by AI projects and the trend continued in the first half of 2023 as well. Aptos, one of the top AI projects in the crypto space, rallied nearly 300% last year. This is when the crypto market cap was barely hovering at around $1 Trillion.

With 2024 expected to be one of the biggest bull runs (no speculations, only sentiment analysis), AI projects could lead the parabolic rise this year.

Trend 4: DePin

DePin (short form for Decentralized physical infrastructure network) is an innovative concept born to incentivize participation or contribution of resources to power a blockchain network. De-Pin lets innovators bootstrap projects and offer services by encouraging contributors to run peer-to-peer (P2P) hardware infrastructure networks.

Just like SocialFi rewards users for sharing their data, DePin rewards users for sharing unutilized hardware to support a network. Some of the top DePin projects are Render Network, Filecoin, and Theta Network.

Note: These are just trends derived using the current sentiment on crypto-dominated social media channels, hype, TVL, user adoption, and market scenario.

This list does not include any financial advice and is meant to educate the audience about the current market scenario.