Messari 2025 Outlook Distilled: How to Find Crypto Alpha in This 190-Page Report

Author: NingNing

Report source: Messari

1. Summary

Messari's 190-page report consists of three parts: the current state of cryptocurrencies (macro-environment, institutional status, where are the users) + track analysis (Bitcoin, Ethereum, Solana, Alt L1s +infra, DeFi, AlxCrypto, DePin, Consumer, CeFi) + analyst choice awards. (Related reading: " Messari 2025 Crypto Outlook: The macro environment will drive Bitcoin up, and the Meme craze will continue ")

Messari's core analysis frameworks include: block space economics, ecological map valuation framework, narrative economics, Schumpeter's innovation theory, etc.

2. Macro Environment

1. Economic and regulatory environment

After reviewing major events in the macro environment in 2024, Messari predicted the changing trends in the US economic environment and crypto regulation in 2025.

• 2025 is destined to be a key year for the reform of US crypto policy. FIT21 and the Stablecoin Act are the most notable major regulatory legislative cases in the market, which will promote the transparency and standardization of the global crypto regulatory policy framework.
• Unlike the optimistic views of ETF stakeholders such as VanEck, Messari cautiously believes in its report that there is a possibility of a reversal of Trump's crypto policy.

But in any case, it will be friendlier than Biden's encryption policy.

Comments: Messari’s macroeconomic environment analysis does not have any special insights and is of average quality. It is not as professional as the macroeconomic analysts on Twitter. The main purpose of this part is to fill up the page count.

Looking ahead to the market trend in 2025, many institutions agree with Messari:

• That is, the market trend in 25 years will be a Banana ForScale, with Q1 reaching a new high in the first half of the year, Q2 making a sharp adjustment, and Q3 and Q4 recovering and setting new highs for the whole year.

2. What is the organization doing?

In 2024, the main battlefield for institutions will be the application and operation of Bitcoin/ETH spot ETFs and the promotion of RWA (mainly U.S. debt tokenization) business. The launch of the stablecoin PYUSD by Paypal and the acquisition of the stablecoin company Bridge by Stripe have blurred the boundaries between financial technology, payment and cryptocurrency.

In terms of investment, the institution adopted a barbell strategy consisting of Al and DePin, and the total financing of these two sectors increased by about 100% and 300% respectively compared with last year.

Incoming AI and crypto czar David Sacks is an investor in Solana, Helium, Render, and Hivemapper. Expect the US government to seriously consider working with the DePin project in 2025.

Comment: The main theme of AIxCrypto next year will most likely be Web3AIAgent. AlxCrypto projects such as AI democratization and AGI, which are capital- and talent-intensive, need to make adaptive adjustments in the face of huge changes in the environment.

DePin is a favorite of North American institutions this year, and they are particularly interested in high-quality data collection DePin and new energy DePin. One of Solana’s strategies for 2025 is still to ensure that DePin happens in Solana.

3. Where are the users on the chain?

Messari cited a report from A16Z, saying that among the 220 million active addresses, approximately 30 million to 60 million are real monthly active users.

Users are mainly distributed in Phantom wallet, stablecoin, Telegram app, Polymark prediction market, Base and Hyperliquid.

Messari believes that the growth of on-chain users in 25 years will come more from the product strength of Dapps, rather than the Bitcoin ATH news events or the legendary stories of MeMe coins getting rich. Therefore, its very bullish chain abstraction and aggregation front-end adoption in 25 years.

Comment: 2025 will be a turning point for Web3 to transition from the "fat protocol" era to the "fat application" era. APPChain/chain abstraction will be the mainstream paradigm for Dapp construction.

The biggest regret of the application layer in 2024 is that Polymark successfully broke through the circle but converted few crypto users. I hope that in 2025, the chain abstract super APP can successfully sell crypto-native stablecoin services, high-interest staking financial management, and cyber lottery MeMe coins to consumers, and realize a super phenomenal Dapp that is both popular and well-received.

3. Track Analysis

The essence of Messari's annual outlook report lies in this part, which is one of the best windows for us to observe the industry views of North American institutions.

--Bitcoin

• Messari focused on inscriptions/runes, Bitcoin programmability, and BTC Staking.
• Inscriptions/Runes will revive under the stimulation of the launch of the Fat Penguin consumer chain mainnet, OpenSea coin issuance, and the NFT Renaissance.
• There will be progress in the engineering of BitVM2, the key to Bitcoin programmability.
• BTC Staking has inherent disadvantages compared to ETH Staking, and the higher economic security of Bitcoin ReStaking's AVS cannot effectively convince users to use it. The focus of the BTC Staking project in 25 years should still be on increasing the penetration rate among BTC Holders.

--Ethereum

• Last year, Messari was an open anti-Ethereum. This year, its attitude was much more moderate, acknowledging the superior status of ETH spot after the ETF. It also pointed out that after the Cancun upgrade, Ethereum's Blob pricing mechanism caused L1 to be unable to effectively capture L2's DA fees, which was the main reason for Ethereum's defeat in the 24-year competition.
• However, Ethereum’s native narratives/products at the application layer, such as Friend Technology, Farcaster, Lens Protocol, and Eigen Layer AVS, have not been successful.
• However, Messari believes that fee income is not the most important indicator for measuring the value of L1, but the ecological map. From this dimension, Ethereum is still the best L1 ecosystem.

Comment: In 25 years, Ethereum will have to see whether it can incubate high-performance parallel EVML1 (Monad)/L2 (MegaETH) comparable to Solana.

--Solana

• The key milestones of Solana in 24 years include Frankendancer, a lightweight solution for the Firedancer client, the new SPL token standard, and ZKCompression, a state compression solution.
• Key milestones for Solana in its 25th year will include the release of the Firedancer client, wider adoption of the prediction market governance protocol MetaDAO, new large-scale DePin projects based on Solana, AlAgent Summer taking place on Solana/Base, and the passage of the SOL spot ETF.

Comment: There is no super cycle for meme coins. The popularity of cyber lottery is a special phenomenon in a special period. Solana ecosystem should prepare for a rainy day and diversify in time to get rid of its heavy dependence on MeMe coins in 25 years.

--AltL L1s +infra

• In 2025, Monad and Sonic will join Solana to compete with Sui’s high-performance single L1. (3, 3) BeraChain, driven by the token economic model, will also be launched on the mainnet.
• In 25 years, there will be a serious surplus of block space, and Dapp developers will have a greater voice. They will no longer be restricted by the ideology of the crypto community and will be able to build consumer-oriented use cases more freely.
• Ethereum’s “Seven Wounds Fist” after the Cancun upgrade has ended the DA narrative of modular public chains. Celestia and Avail have begun to transform into a global cross-chain interoperability coordination layer.
• The next generation of L2 with high performance + AltVMs such as Mega and UniChain will also reach the battlefield.
• Avalanche ushered in the largest mainnet upgrade in history, Avalanche9000. This upgrade will bring significant performance improvements. Together with Avalanche Interchain Messaging (AlM), it will build a liquidity center with C-chain as the center. The 25-year Avalanche ecosystem will have outstanding performance in RWA and Web3 games (represented by off the grid).
• The 25-year future of Cosmos remains uncertain, and the key checkpoint is when the Interchain Foundation (ICF) will actually take control of the coordination. ICF’s acquisition of Skip Protocol earlier this month may accelerate this process.
• Initia, another giant project in the Cosmos ecosystem, focuses on APPChain interoperability and the realignment of interests between ecological roles, and will also join the ranks of powerful new block space providers in 25 years.
• 25-year chain abstraction protocols such as @ParticleNtwrk are accelerating from narrative to productization. Chain abstraction is not a single technology, but a combination of technical primitives such as cross-chain bridges, messaging platforms, intent infrastructure, ZK proof aggregators, shared sequencers, etc.

Comment: When analyzing Alt L1s +infra projects, the explanatory power of block space economics is unmatched.

--DeFi

• When will the PerpDEX trading volume/CEX ratio catch up with the spot DEX trading volume/CEX ratio has always been the focus of DeFi enthusiasts. The emergence of Hyperliquid has rekindled everyone's hope.
• Another focus is how to trade off between vertical integration and composability when building DeFi protocols.
• The current structure of RWA is still mainly based on the tokenization of U.S. Treasury bonds. In 25 years, RWA will have two main lines: tokenizing idle assets of DAOs and exporting on-chain yields to traditional capital markets.
• In terms of integral Fi, Pendle occupies a unique and key ecological position.
• In terms of anti-MEV, in addition to FlashBot’s market game model, CowSwap’s intention architecture emerges.

--Al x Crypto

• Messari divides AlxCrypto into four categories: decentralized computing network, coordination platform, AI tools and services, and applications. Of course, Messari also pays attention to AlAgentKOL and AIAgent MeMe coin.
• Messari predicts that the major events worth noting in AIxCrypto in 25 years are: Bittensor and Dynamic TAO will become new AI project coin factories, the work of Prime Intellect and Nous Research will further enhance the feasibility of decentralized computing training, and AI Agent will be OnChain and completely separate from AI MeMe coin.
• SentientLabs, the open source AGI project that competes against commercial titans, will also receive greater attention in 25 years.

--DePin

As the inventor of the term DePin, Messari now divides DePin into physical resource network (PRN) and digital resource network (DRN).

Messari is very bullish about the new energy DePin projects Glow, Daylight Energy Helium, DAWN, GEODNET, Hivemapper, DIMO in the PRN sector and Prodia, Filecoin, and Grass in the DRN sector.

In 25 years, Solana's dominance in the DePin field will be challenged by Base and others.

Comment: This part contains a large number of Alpha projects with potentially high profit and loss ratios. Those who are interested are strongly recommended to read the original text.

--Consumer

• Messari includes Web3 games, MeMe coins and their launch platforms, DeSoc&SocialFi, and NFT into this part.
• I have written many articles discussing Web3 games, so I will not repeat them here. I will just say that Messari has observed an interesting change: the gameplay design of Web3 games has begun to shift from Play2Airdrop to Pay2Airdrop.
• MeMe coin and its launch platform, gamification and personalized design are the new trends of MeMeCoin launch platform. In short, it is OK to develop around the positioning of MeMeCoin, the cyber lottery.
• DeSoc & SocialFi, as a former product operator, I don’t want to talk more about this, and I still haven’t done much in 25 years. Solana to Blink’s top protocol Send has transformed into AIAgent.
• Fat Penguin leads the NFT Renaissance and Web3 consumer IP. Fat Penguin and Azuki will launch consumer chains Abstractchain and Animechain respectively in 25 years.

Comments: In the Consumer sector, I am most impressed by the Fat Penguin NFT and the Abstract Chain. 25 years will be the year when @LucaNetz will be enshrined as a god.

--CeFi

It has nothing to do with retail investors, so I will omit it.