Introduction
Cycles and narratives dominate the global crypto market's discourse. While Bitcoin halvings historically marked cyclical trends, the approval of Bitcoin and Ethereum spot ETFs has intensified the crypto market's coupling with global finance, introducing more variables. Amid rising uncertainty, understanding cycles and uncovering future narratives is crucial. Investment institutions spearhead this exploration, eager to capitalize on emerging trends.
This article, a collaboration between OKX Ventures and Fundamental Labs, examines infrastructure evolution, addressing:
- Current sector dynamics
- Future infrastructure advancements
- Key investment insights
Current State of Web3 Infrastructure
OKX Ventures' Perspective
- Rollup Proliferation vs. Activity: L2Beat data shows numerous rollups, yet few surpass Ethereum (ETH) in activity.
- Investment Shifts: Infrastructure dominated 2022–2023 fundraising but ceded to Web3 applications by late 2023.
- Modular Narrative Challenges: Fragmentation arises from isolated architectures (DA, execution, interoperability), leading to "ghost town" ecosystems.
Positive Developments:
- Ethereum’s reduced gas fees (single-digit gwei).
- Standardized DeFi stacks (DEXs, perpetuals, lending) across chains.
- High-performance solutions for AI, social, and gaming (e.g., parallel EVM, zk coprocessors).
Prediction: A super app could emerge within 2–3 years if current trajectories hold.
Fundamental Labs' Overview
- Layer-1 Diversity: Solana, Aptos, and Cosmos advance via performance and cross-chain compatibility. NEAR excels in AI/abstraction, boosting active addresses.
- DeFi Dominance: DEXs, lending, and liquidity mining drive chain revenues.
- Scaling Maturity: Rollup-based L2s enhance throughput and reduce fees.
Trend: Web3 infrastructure thrives on innovation but faces interoperability and fragmentation hurdles.
Future Infrastructure Evolution
OKX Ventures' Outlook
Post-ETF Dynamics:
- Challenges: Centralization risks from institutional staking (e.g., Coinbase custodianship threatening PoS decentralization).
- Opportunities: ETFs enable new PMF in payments, AI, social platforms, and RWA.
Mid-Downstream Iterations:
- Plug-in Enhancements: DA, coprocessors, solver networks, and chain abstraction improve cross-chain operations, cost efficiency, and proof aggregation.
Fundamental Labs' Vision
- User-Centric Evolution: Demand for performance, security, and usability will shape infrastructure.
Key Focus Areas:
- Public Chains: Bitcoin’s Lightning Network, Taproot Assets, and NEAR’s chain abstraction.
- DeFi Compliance: AML/KYC integrations and stablecoin infrastructure.
- Tech Integration: Decentralized AI, MachineFi, and RWA platforms.
Interoperability: Solutions like shared sequencers and account aggregation will reduce fragmentation.
Investment Insights
OKX Ventures' Strategy
- Execution Layer: Invested in parallel EVM (Sei, Monad) and non-EVM chains (SonicSVM).
- DA Layer: Backed Celestia and Avail; explored BTC L2s (Merlin, Bitlayer) for native yield and asset issuance.
- Settlement/Coprocessors: FHE and proof aggregation projects to drive mass adoption.
Principle: Avoid monopolistic L2/L3 solutions; prioritize open ecosystems.
Fundamental Labs' Approach
Tech-Stack Coverage:
- Public Chains: NEAR, Avalanche, Polkadot.
- Middleware: Filecoin, Chainlink.
- DApps/User Access: Metaplex, Math Wallet.
- Regulation: Invested in compliant exchanges (e.g., Coinbase).
Core Tenet: Decentralization and user autonomy define Web3’s value.
FAQs
1. Why is infrastructure fragmentation a concern?
Fragmentation dilutes liquidity and complicates user experience, hindering mainstream adoption. Solutions like chain abstraction aim to unify ecosystems.
2. How do ETFs impact crypto infrastructure?
ETFs boost liquidity but risk centralizing staking. Innovations like DVT mitigate these risks while unlocking new financial products.
3. What’s next for Bitcoin’s infrastructure?
Lightning Network and BitVM will expand BTC’s utility beyond store-of-value, enabling scalable DeFi and smart contracts.
👉 Explore cutting-edge crypto infrastructure
Disclaimer: OKX Disclaimer.