The Future of Crypto, NFTs, Social Impact, and DAOs: Insights from Web 3 Industry Leaders

In Givepact’s 2024 Web 3 Trends conversation, we spoke to industry leaders on the current state of the market, the biggest surprises from 2023, and predictions for the ecosystem in 2024.

Speakers: 

Drew Simon, founder of Crypto Altruism, an educational platform highlighting inspiring projects, and supporting the non-profit sector to advance the adoption and implementation of blockchain technology. 

Alcides Aguasvivas and July Grullon, founders of Nettyworth, the first social decentralized finance marketplace. 

Roman Giler, co-founder of Savvy Defi, a crypto lending protocol. 

Josh Phelps, council member of Friends with Benefits, formerly at Arkive DAO and World Central Kitchen. 

Eric Tomaszewski of Verde Capital Management, a wealth management advisory firm. 

How are you reading the market and helping your clients think through the next few years?

Eric: We saw a great deal of consolidation, but during that time frame, I would argue many people were hunkering down building and focusing that energy. That's all we needed. We're seeing a couple of catalysts like institutional adoption, where big names like the Blackrocks of the world are starting to show their cards.

Things to watch: account abstraction when it comes to the whole experience for users. Things have to be smooth. They have to be easy for onboarding the masses. 

If you look at Ethereum Improvement Proposal (EIP) upgrades, Proto-Danksharding, sharding, and EIP 4844444. It basically means we're going to have more efficiencies for Layer 2s and rollups. As we lead into next year, top of mind is the Bitcoin halving and what that has done in the past, but what that could also lead to the rising of all boats.

Savvy Defi: I'm very bullish on Eigen Layer and the whole restaking movement, because it frees up liquidity even further. One of the biggest things I'm really excited about is happening on the Bitcoin Blockchain — Ordinals, BRC 20, and layer 2s being built on top of Bitcoin.

What do you think about the debate between Ethereum layer 2s or the Bitcoin strategy of launching layer 2s, which are fast and efficient, versus the Solana thesis of a monolithic blockchain where all the liquidity is concentrated?

Savvy Defi: Solana's always had a really big core following of users — they have a lot of active users on the chain for various reasons. One of them is relatively fast in execution and in consensus. It’s also cheap, which is important.

Then with the Ethereum layer 2, chains that are fragmenting liquidity and locking up a ton of ETH. Some evolution to that narrative with layer 2s, chains that haven't even launched yet, but are now sucking up liquidity. I'm actually a bigger proponent of a modular approach. Layer 1 or layer 2 approaches that you see in Polkadot with para-chains or within the Cosmos ecosystem or Avalanche where they have subnets and in Cosmos, they have sidechains. I am bullish for that distribution of consensus.

I do think that over time bridging will get a lot better and liquidity will not be so much of an issue and total fragmentation of the market won't be a big deal down the road when the market has 10x in size and liquidity. 

Where do you see the NFT market going in 2024? What's getting you excited in space? 

Nettyworth: I think one of the biggest things that we've seen is the actual application for the end users improving. Basically removing the experience that something feels like you're using anything to do with the blockchain versus coming in and feeling like you could just create an account and buy NFTs, trade, and borrow against them.

For example, OpenSea when it originally launched, just allowed you to buy and trade. Now you can trade and take out loans.

Everybody mentions the mainstream, but I don't think anyone has been able to reach the mainstream like Pudgy Penguins. What really rallied the Pudgy Penguins was when the collection got bought out [by Netz Capital for $2.5M], it created a narrative that there’s actual financial support behind the project. What they've done is very different from any other player in the space: They landed a partnership with Amazon and Walmart. And, holders of these NFTs would receive royalties based on the physical sales of the items.

How do you see the evolution of micro donations for social impact playing out in the future?

Crypto Altruism: At first when crypto philanthropy took off, we saw more activity towards larger donations. Now, with the growth of layer 2s and platforms deploying on Optimism, Base, and Arbitrum to be able to facilitate donations for lower gas fees.

Also, the growth of Quadratic Funding has pushed micro donations forward. Through Quadratic Funding specifically, and I'll use Gitcoin as an example, it's very common to see donations of a dollar worth of  ETH being matched for at a much higher level. Somebody could make a $10 donation, and then it gets matched 10x and it has a $100 impact. Micro donations and Quadratic Funding along with the lower gas fees of layer 2s, is making it a lot easier for folks to participate and have an impact. That's one area where I think that we'll continue to see growth.

How do you counter the public’s perception of crypto?

Crypto Altruism: I often tell folks who are worried about crypto to engage in the community, listen to a Twitter Space, join a Discord. Then they’ll see that the community is using this technology to have a real world impact. There's tons of us, but it's a small problem within the bigger Web 3 ecosystem. There's some incredible work being done with folks that have come from all different sectors that are bringing their talents to Web 3 to do amazing things.

What have you learned through your experience working in DAOs? 

Josh: DAOs are not a perfect organizational structure. What we've learned over the last couple of years is if you’re a DAO extremist, that's not gonna work for everybody. What happens is a lot of communities are flowing decentralization, autonomy, and trust, to find the structure that fits for them. What I love to see are sub-DAOs or DAO adjacent projects with like minded individuals.

Working with global communities, you have to be flexible and meet the people where they're at.

What surprised you the most from 2023? 

Givepact: I was surprised that Coinbase launched a layer 2. I think it was a really bold and ambitious thing that they did. I saw it as a brave move to disrupt themselves. 

Savvy Defi: What surprised me more than anything was Ripple winning [in court against the U.S. Securities and Exchange Commission].

Nettyworth: The biggest thing was BlackRock supporting crypto and making sure the entire world follows them.

Eric: Solana. I think when you look at what happened with FTX, if they were being honest with themselves, said ‘This is it. It’s imploding’. However, the Solana community stayed very tight and came through with grit, and it's remarkable to see how much TBL has been added on the platform in just the last several weeks.

Josh: Seeing traditional slow moving aid organizations starting to embrace the blockchain and what it can bring. We saw people organizing to send money on the blockchain to support Ukraine. And for nearly two years, the United Nations High Commissioner for Refugees has been implementing sellers' tools.

Crypto Altruism: The growth of the public good funding infrastructure within Web 3. Retro public grants funding is really exciting to see grow — 30,000,000 OP tokens, and funding to give retroactively to products that contribute to the Optimism Network. And the growth of Gitcoin, a decentralized platform allowing communities to run Quadratic Funding rounds in grants round. We’ve seen everything from a public goods Africa focus to fundraising for the American Cancer Society.

What are your bold predictions for 2024? 

Savvy Defi: Seeing really expensive real world art getting on the blockchain. For instance, I expect someone to try to fractionalize a Picasso painting. I also predict the NFT space to get heavy into tokenizing real world assets.

Nettyworth: I think physical assets like watches, collectibles, and sporting tickets are going to be tokenized. We’ll see the gamification of physical assets tied into the end of the digital asset.

I think we're finally going to get a big push when it comes to gaming. In the NFT space, companies like Roblox started to get into the blockchain and Grand Theft Auto is about to start tokenizing assets within the game. I think it's going to help propel all the other Web 3 games being built.

Givepact: 2024 will be the year artificial intelligence and crypto narratives converge. We'll see an AI coin that's a top 10 token and AI agents, which could be NFTs, transacting with each other on the blockchain, because I just don't see how AI agents can transact without crypto. 

Crypto Altruism: I think in 2024 we're going to see more experimentation of merging Web 2 and Web 3 models as a way to drive adoption. Looking at MiniPay, which launched in the Opera browser, is a great example of bringing the crypto wallet to hundreds of millions of people or using the Opera browser browser on Android phones already in Africa. You just need a phone number to sign up, and you can send crypto.

Josh: I think Washington D.C. is going to be a big player in the space. You've seen how much time Coinbase CEO Brian Armstrong has been spending in Capitol Hill. You can't let people make policy for you. 

Eric: My bold prediction may be that Base breaks into the top five when it comes to TBL.

Listen to the entire conversation here. 

*This conversation was edited for clarity.