Arkstream Capital: Nine Alpha Prediction for 2024
1/ETH L2 Summer arrives as scheduled
ETH+L2 has essentially become the largest homogenous cross-chain ecology. With the launch of Starknet/zkSync/Scroll/Blast, a competitive market for L2 will be intensified by the technical stream and market flow.
Prospective Companies
Starknet / zkSync / Scroll / Blast / Manta
2/Modular Blockchain, an inevitable iteration
With the launch of Celestia, there are signs that the market share of the Data Availability (DA) layer is moving away from Ethereum’s exclusive monopoly. Currently, frameworks such as OP Stack and Polygon CDK offer mature smart contract architectures, which is leading the industry to explore Bitcoin DA in conjunction with the cutting-edge BitVM paper.
The flourishing of subdivided domains, such as shared/decentralized sequencers, RaaS (Runtime as a Service) services, etc., signifies the rapid iteration of blockchain towards modularization.
Prospective Companies
Celestia / Altlayer / Dymension / Avail / Fuel / Espresso
3/BTCfi erupts, reaching a release of 10% of Bitcoin’s liquidity
Purism combined with market hotspots can unleash energy beyond what technology purists can imagine. The value released by BTC liquidity is like an unexhausted gold mine. Following the narrative of inscriptions, there’s a wave of BTC’s Layer 2 and BTC applications. With the liquidity of Bitcoin expected to be released by more than 10%, BTC finance (BTCfi) will support a market of over 100 billion USD.
Prospective Companies
Stacks / Merlin / B² Network / Chainway
4/Restaking creates a consensus Russian doll of legos
Within the modular blockchain narrative, few projects explore the consensus layer, with Bitcoin and Ethereum providing globally recognized consensus security. Restaking effectively assists emerging blockchain projects in obtaining suitable security at the startup phase, avoiding unhealthy token mechanisms of excessive token emission inflation. In the Bitcoin ecosystem, Babylon takes the lead, with BTC-related ecosystems adopting Babylon, while Ethereum is led by EigenLayer, which has spawned the narrative of LRD (Liquidity Re-staking Derivatives?) on top of the LSD narrative. Pendle, as a unique placeholder in the ecosystem, continues to shine in terms of TVL, user data, and token price.
Prospective Companies
Eigenlayer / Babylon / ether.fi / Puffer / Pendle
5/The second cycle of GameFi
The widespread adoption of MPC wallets has broadened user technology. Games with more playability after 3 years of iteration will have a stronger user capture capability than their predecessors. Richer game content will increase the complexity of economic systems, gradually moving away from the pure Ponzi attributes of the last cycle.
Prospective Companies
Illuvium / Space Nation / Lumiterra / Matr1x
6/AI+Web3: A long narrative on algorithms, computing power, and verifiability
AI is a main narrative in technology, and its iterations continuously inject vitality into Crypto. Onchain AI can leverage smart contracts to automate and dynamize machine learning and artificial intelligence. Additionally, blockchain technology provides transparent and verifiable solutions for AI (like zkML/opML). Furthermore, key elements such as AI models, GPU power, data feeds, and data tagging can be integrated into the blockchain.
Prospective Companies
TAO / OLAS / JANCTION
7/DePIN — a physical flywheel-like DeFi with exponential growth
It’s a new phenomenon-level model for online+offline token distribution and service provision. During periods of infrastructure maturation, Crypto applications will drive exponential network growth of DePIN.
Prospective Companies
Mobile / Io.net / Meson / POKT
8/Social experiments in social tokenization are underway
Despite the failure of Friend.tech’s attempt, the explosive power of social monetization has been demonstrated, while anti-censorship and security are the calls from social to Web3. Social protocols like Lens and Farcaster continue to carry hope.
Prospective Companies
Farcaster / Lens / Nostr
9/DeFi derivatives, poised for launch
Finance is always the most suitable for blockchain’s high-value applications with real yields. GMX’s global shared liquidity pool, Gains’ capital utilization efficient synthetic schemes, and others continue to lead the market. This bull market has also seen the futures protocols, such as Aevo and Whales, bringing a pre-market explosion. We believe that derivatives represent one of the best long-term fundamental narratives.
Prospective Companies
GMX / Gains / Drift / Apex / Aevo / Whales
