It’s been nearly a decade since I helped draft J.P. Morgan’s first designs for asset tokenization. At the time, the idea that securities could settle on public infrastructure felt radical. But one thing was clear:

Once the rails became programmable, the structure of capital markets would eventually follow.

Today, that hypothesis is playing out at hyperspeed.

More than $24 billion in real-world assets now exist on public blockchains, up over 3× since the start of 2023. Nearly 200 issuers—from BlackRock and Franklin Templeton to Siemens and J.P. Morgan—have placed real capital onchain.

Fintechs aren’t satisfied being front-ends for legacy infrastructure anymore; they’re building the new rails themselves.

And for the first time, corporates are issuing on public blockchain infrastructure.

Several weeks ago, Robinhood broke new ground by announcing the launch of Stock Tokens—tokenized stocks, ETFs, and private company shares—on Arbitrum, the leading Ethereum Layer 2. CEO Vlad Tenev also revealed plans for Robinhood Chain, an Arbitrum-powered network designed for 24/7 global trading of tokenized assets.

A Gravity Well is Forming

The infrastructure of capital markets is moving onchain. And with it, the strategic playbooks of fintechs, corporates, and investors are being rewritten in real time.

We’re witnessing a mass migration to the next-generation infrastructure for moving, clearing, and valuing capital assets.

A gravity well is forming around the early liquidity flows—and it’s already pulling the center of gravity for price discovery, capital formation, and global liquidity away from Wall Street’s ancient pipes and onto modern blockchain rails.

gravity well (definition): A model of the gravitational field around a massive object. It represents how the object's mass curves or warps spacetime, creating a "well" that attracts other objects. The deeper the well, the stronger the gravitational force, and the more energy is needed to escape its pull.

The question now is: what happens next?

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Financial Physics in Motion

If Isaac Newton worked on Wall Street, his First Law might read:

"Assets move in the direction of least resistance - unless acted upon by regulation."

Put differently: Assets will eventually flow to where they can:

1. Move most freely (global, 24/7, software speed)

2. Trade most cheaply (automated, minimal middlemen)

3. Be valued most completely (global discovery, composability, collateral utility)

Blockchains are finally making that possible.

I’ve watched this migration unfold from inside a global bank at J.P. Morgan and across the venture ecosystem at Pantera. What looked impossible in 2015 is now operational—and accelerating.

Like eurodollars in the ‘60s, ADRs in the ‘90s, or ETFs in the ‘00s, the liquidity for tokenized assets will pool first on the margins and then cascade toward the center.

Tokenized treasuries, private credit, and now equities are the early signals:

Today, Figure has processed over $41B in transactions. Ondo has issued over $1B in tokenized Treasuries and is now expanding into equities through Ondo Global Markets.

Tokenization is expanding the footprint of capital markets to be truly global for the first time.

The most desirable issuers will follow liquidity and access global capital pools in one click, made possible only through onchain settlement.

The most forward-thinking investors will demand portability, transparency, and the utility that only onchain primitives can offer.

The New Fintech Playbook

The winning playbook for disruptive FinTechs used to be: “Become the bank before the bank becomes you.”

Tokenization has unlocked a new way to win: Don’t become a bank. Become the infrastructure.

Robinhood’s recently announced launch of Robinhood Chain is a blueprint. Rather than compete on front-end UX or margin rates, Robinhood is turning its user base into liquidity for its own blockspace.

Here’s how Vlad and his team described the Robinhood Chain:

This is the first blockchain with the technology and regulatory infrastructure needed to carry the entire traditional financial system on its back into the future…. Our goal with stock tokens on the Robinhood Chain is that in the near future, you will be able to seamlessly transfer your assets in seconds and your ability to trade will not be reliant on any individual broker or counterparty.

Wait, but doesn’t this threaten Robinhood’s core brokerage business?

Not if it gives them the opportunity to transform the entire capital markets stack and re-position themselves as a dominant, vertically-integrated platform.

The logic is simple: If you own the distribution (users), and the interface (app), why wouldn’t you also serve as the rails (infrastructure)?

Historically, Robinhood and other platforms have suffered from:

• a permanent storage tax paid to custodians and central depositories,

• slow, expensive settlement cycles, enforced by clearinghouses and banks,

• limited access to new assets, due to bottlenecks from exchanges and legacy rails.

By migrating onchain, Robinhood is escaping the hidden taxes of financial sharecropping and the overhang of legacy infrastructure.

Robinhood isn’t alone in launching their own chain. Coinbase’s layer-2 chain Base is among the fastest-growing blockchain ecosystems. It’s also driven over $100 million of revenue to date for Coinbase. But more importantly, these new corporate chains represent a step towards internalizing the benefits of programmable finance: fees, flows, and future optionality.

In every case, the model is the same: own the sequencer, own the economics. As vertically-integrated market venues, they can capture (or reduce) trading spreads, custody fees, and infrastructure rents that previously belonged to legacy institutions.

But owning the sequencer isn’t simply about capturing fees. It’s about owning liquidity, owning distribution, and eventually owning capital formation.

Fintechs that control all three won’t need to ask permission from transfer agents, clearing firms, or exchanges. They’ll launch global capital markets from a wallet app - with composable apps, enforceable rights, and real economic gravity.

With a vertically integrated chain, a fintech business can:

• List tokenized assets as permissionlessly and as easily as an API;

• Monetize transaction volumes more fairly and cheaply, disrupting traditional Wall Street fees with usage-based pricing, as SaaS models have done to many industries;

• Let third-party developers build apps on top of their liquidity flows and asset inventory, such as asset lending, structured products, insurance, and portfolio management tools;

• Demonstrate transparency and programmable controls for regulatory compliance.

Robinhood doesn’t need to build a securities lending desk for tokenized equities. Morpho can deploy on Robinhood Chain, while Robinhood simply routes users to Morpho’s smart contracts. This is an evolution from app developer to platform operator.

We’re entering a new phase of the tokenization cycle, where the most powerful distribution platforms on Wall Street can launch new infrastructure for themselves and become the most desirable venue for trading, payments, and capital formation.

The Re-Platforming of Capital Markets

It’s not just fintechs. Some of the most systemically important institutions in the world are now issuing and settling assets onchain.

When I departed J.P. Morgan’s blockchain team in 2018, it was partly out of impatience. I assumed corporate adoption of public blockchains would take 2 more years. That turned out to be ambitious. Seven years later, the inflection point is here.

BlackRock’s BUIDL fund crossed $375 million AUM within six weeks of launch. It now exceeds $2.6 billion and pays USDC-denominated dividends natively on Ethereum. J.P. Morgan’s blockchain platform processes intraday repo trades on a private Ethereum fork, settling collateral in minutes instead of days. In 2023, Siemens issued a €60 million digital bond directly on public Ethereum - no bankers required. Similarly, Société Générale issued a digital green bond on Ethereum in 2023, with participation from regulated institutions like AXA and Generali. Those successful pilots were the early indicators of a coming wave.

Institutions are now waking up to the fact that we no longer need:

• Investment banks to facilitate capital access

• Correspondent banks to patch together global distribution

• T+2 settlement cycles that delay liquidity and inflate risk

Public blockchains offer global reach, instant settlement, and programmable logic. For corporates facing rising capital costs and fragmented investor bases, the ability to issue debt (and eventually equity) at the click of a button and instantly tap into global liquidity is too attractive to ignore.

Fintechs are building chains to own distribution and monetization. Corporates are issuing onchain to lower cost of capital and expand access.

Both are converging on the same conclusion:

Public blockchains are the most credible infrastructure for operating the world’s first truly global capital markets, always on and universally accessible.

The Right to Travel, but Not to Own (Yet)

Yet most of what’s called “tokenization” today is still incomplete. We’ve built the highways. But the gates into the city center - the courts, the cap tables, the governance - are still locked.

Today, you can trade tokenized stocks and Treasuries onchain. But don’t mistake that for full ownership. Your rights - to vote, inspect, or enforce - remain trapped in offchain constructs: SPVs, custodians, transfer agents. We’ve given investors the right to travel, but not the right to own (yet).

As liquidity grows and investors experience the benefits of their tokenized portfolios, there will be mounting pressure on issuers to extend full shareholder rights to tokenholders. Some investors won’t wait. They’ll tokenize their portfolios themselves, then ask for forgiveness later.

This tension of issuer rights vs. investor rights will likely be one of the definitive battlegrounds during the next decade in tokenization.

Who controls shareholder privileges when the asset lives onchain, but the registry doesn’t? What happens when tokenholders want more than transferability and price discovery - when they want the power that comes with true ownership?

As SEC Commissioner Hester Peirce recently put it, the promise of tokenized securities is “enchanting, but not magical.”

That promise won’t be fulfilled by wrapping assets in digital form. It will require issuers to shift their mindset towards native onchain issuance, from an experimental sandbox to the default path for accessing global capital pools.

The Tipping Point for Tokenization

The rise of tokenized assets today mirrors the early days of ETFs.

When the first U.S. equity ETF (SPY) launched in 1993, it crossed $1 billion in AUM within a year. But the real inflection point wasn’t its size. It was when ETF volumes began consistently matching and eventually exceeding mutual fund flows. That’s when market structure changed and investor behavior soon followed.

Tokenization will hit a similar moment in broad market structure transformation and issuer & investor behavior.

I believe that the tipping point arrives when any of the following occur:

• Daily onchain equity volume exceeds $1B, comparable to lower-tier ADRs or long-tail ETFs;

• Tokenized equity AUM crosses $100B, giving confidence to systemic allocators (sovereign wealth funds, pensions, endowments) to embrace tokenization’s benefits in their portfolios;

• A top public company (S&P 500 or Nasdaq 100) see more liquidity onchain than their home exchange or ADR equivalent;

• A global IPO listing bypasses New York entirely and issues onchain directly or in a financial hub with stronger regulatory and policy frameworks for onchain issuance.

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Today, we’re still early. Tokenized equities currently trade ~$300M in average monthly volumes. But what matters is the acceleration rate. Those volumes represent a 350% increase in volumes over the past month, with many prominent launches like Robinhood’s Stock Tokens and Ondo Global Markets still in the early stages.

If adoption continues at this healthy pace, the $1B daily volume threshold could be achievable within 2-4 years, depending on a few potential catalysts:

• Regulatory clarity around tokenized asset wrappers and natively-issued onchain equity;

• Financial app-specific chains reaching scale in performance and liquidity, e.g., Robinhood Chain, Ondo Chain, Provenance Blockchain (and certainly more to come);

• Abstraction of UX barriers that bring onchain assets to retail investors without wallets or gas requirements;

• Portable compliance layers that abstract KYC/AML checks and travel natively alongside tokens, unlocking cross-border liquidity safely and compliantly.

When it happens, it will feel obvious in hindsight as tokenization’s “ETF moment.”

Today’s early adopters are focused on applying a better set of rails, but the biggest story is the structural shift in the future of capital markets. Once the migration is complete, blockchains will be recognized as the default destination for capital formation, price discovery, and value transfer. The first and last stop for issuers and investors.

Having helped develop some of the earliest blueprints for tokenization, I can say with conviction today: the rails are here, the liquidity is flowing in, and the momentum is real.

The gravity well has formed. Now we watch what gets pulled in.

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Ethereum’s next major protocol upgrade Pectra is built different. And heads up: it went live today.

If Ethereum is a city, then Pectra is like upgrading city infrastructure.

Repaving roads (better UX).
Improving traffic flow (lower DA costs).
Modernizing the power grid (validator ops).

It’s not a new skyline or shiny new skyscraper. It’s the boring but essential work that makes the entire city faster, safer, and better for everyone who lives there.

Pectra doesn’t just incrementally improve developer ergonomics or shave a few gwei here and there. This upgrade actually shifts the economics and UX of Ethereum-based applications enough to unlock new classes of products and business models (find a list of these at the end!).

Pectra is Ethereum’s cost-performance tipping point

Pectra bundles 11 Ethereum improvement proposals (EIPs) across Ethereum’s execution and consensus layers, in order to tackle some of its most nagging pain points: clunky user experience, high data availability costs, and slow validator operations.

But how is Pectra a "tipping point"? Because it marks a cost-performance tipping point for Ethereum: a critical threshold where a product becomes significantly more attractive due to a change in its cost structure relative to performance / value.

Pectra’s protocol improvements can now push on‑chain economics and user experiences past the cost-performance threshold, enabling entire new categories of viable products and business models. Magic things start to happen when you get a convergence of lower costs, better performance, and improved UX.

Lowering on-chain costs below the pain threshold

Before Pectra, many on‑chain operations—micro‑perpetual trades, low‑value NFT mints, batched yield rebalances—were too expensive or unpredictable in gas pricing to support sustainable ventures.

Pectra’s ~30–50 % gas cuts and blob throughput gains collapse those costs into “not worth thinking about” territory (e.g., sub‑$0.05 mint fees, sub‑$0.10 micro‑perp trades). This means that today’s “nice‑to‑have” features become tomorrow’s core revenue drivers.

How this works:

Proto‑Danksharding & Blobs (EIP‑4844 + EIP‑7691): Pectra introduces the first layer of Danksharding—so‑called “proto‑danksharding”—via blobs, a new data‑availability primitive that decouples rollup payloads from Ethereum’s execution state. Think of blobs as extra cargo space on a plane: instead of stuffing every package into the passenger cabin, you offload freight to the cargo hold, freeing room and reducing costs. Rollups like Optimism and Arbitrum can now post up to 50 % more calldata per block at half the price. For end users, that translates into 30–50 % lower transaction fees when swapping tokens, bridging assets, or interacting with DeFi protocols on L2s.

Calldata Gas Repricing (EIP‑7623): Calldata (the raw instructions users send to smart contracts) becomes significantly cheaper. Picture postage stamps: if each stamp costs less, you can send longer letters without breaking the bank. Pectra reduces the per‑byte gas cost, making bulk transactions (multisend airdrops, batched vault rebalances, multi‑NFT minting) up to 40 % cheaper. Builders can bundle multiple operations into one transaction, avoiding unpredictable fee spikes.

Fixing UX with major quality-of-life improvements

Wallet‑approval fatigue. Gas popups. Multi‑step onboarding flows. These clumsy experiences have been tolerable for crypto die‑hards, but are completely alien to broader audiences.

Pectra’s gas abstraction and smoother UX make on‑chain interactions feel as seamless as Web2 one‑click experiences. When users no longer need to wrestle with MetaMask or gas limits, onboarding can finally scale from millions to hundreds of millions.

How this works:

Gas Abstraction & Smart‑Contract Wallets (EIP‑7702 + EIP‑7840): Pectra elevates “account‑code” support, enabling smart‑contract wallets to directly sponsor gas for end users. Imagine driving through a toll plaza and finding your favorite app already paid your toll—no need to stop or fumble for tokens. No more MetaMask popups for every approval or swap. Developers can bundle a painfully familiar sequence like “approvals —> swaps —> approvals —> cross‑chain bridge —> approvals” into a single transaction paid by the DApp, slashing onboarding friction for non‑technical users.

Smoother Staking Flows (EIP‑7251 + EIP‑7002): UX improvements for staking often go unnoticed, but they matter. Pectra raises the validator stake cap from 32 ETH to 2,048 ETH, allowing node‑ops providers to merge stakes like consolidating small bank accounts into a single high‑yield fund—simplifying management and reducing fees. Triggerable exits become instant, smoothing the user journey for liquid‑staking platforms and making staking as intuitive as withdrawing at an ATM.

Minor Engine Tuning (EIP‑7846, EIP‑7617): Small gas refunds and opcode tweaks may sound trivial, but they compound across thousands of contracts, shaving micro‑seconds and micro‑gwei off everyday on‑chain computations.

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What Pectra Signals About Ethereum’s Future

Optimism about Ethereum “getting shit done”
Ethereum’s critics often cite slow governance and fragmented client support. Pectra dispels those concerns: in under 24 months, Ethereum shipped Shanghai (Apr 2023), Dencun (Mar 2024), and now Pectra (May 2025). Eleven EIPs coordinated with no backtracking, no drama. I expect that future upgrades will happen even more frequently than the current annual cadence. The biggest takeaway from this: Ethereum’s “upgrade flywheel” is on full throttle, reducing protocol risk for builders and investors.

Better governance = Better shipping
Pectra’s “meta‑EIP” umbrella (EIP‑7600) shows how far Ethereum’s governance has come. Multiple working groups, off‑chain forums, and on‑chain signals converged on one coherent package. Like multiple teams aligning to launch a space mission with perfect timing - except once a year, instead of every couple of decades. Builders can now treat upgrade timelines as predictable milestones rather than moving targets.

Roadmap confidence = Investor confidence
By priming proto‑danksharding today, Ethereum paves the path toward full danksharding in the near(er) future. Post-Pectra, builders and investors can reasonably model a transparent roadmap to reach 1 M TPS on L2 networks. With gas cost floors steadily dropping, business models can project sub‑$0.10 transactions, turning long‑term planning from guesswork into granular forecasting.

New Opportunities for Builders & Founders

Beyond simply building existing DeFi or NFT apps cheaper, Pectra shifts the kinds of apps that are worth building. Micro‑perpetual markets. Continuous auctions. Gas‑sponsored social dApps. Enterprise staking‑as‑a‑service. These kinds of features and products become feasible and potentially quite profitable.

Pectra isn’t just another upgrade. It’s the inflection point where Ethereum’s base‑layer enhancements cross over from incremental optimization to commercial enablement.

Here’s a non-comprehensive list of products and use cases that open up post-Pectra:

DeFi

• Micro‑Perpetuals & Mini‑Auctions
  Calldata costs halved means you can launch per‑second perpetual markets or continuous auctions for real‑world assets with entry fees under $0.05 per trade. Think about running a micro‑stock exchange on every block.

• Composable Yield Vaults & Orchestration
  Blob throughput makes chaining 5–10 yield strategies in a single multicall as easy as ordering a multi‑course meal in one click, paying a single delivery fee. Startups can charge performance fees on top of a management fee, creating recurring revenue for decentralized portfolio managers.

• Flash‑Bundle SDKs
  Package Flash Loans, MEV capture, and gas sponsorship into a one‑call SDK. It’s like bundling internet, TV, and phone into a single subscription, only for high‑frequency DeFi primitives.

Consumer Social Apps + NFTs

• Mass Minting at Scale
  With Pectra’s calldata repricing delivering ~30 % gas reduction, a 10K‑piece mint drop now costs under $1,000 total—making generative art drops as affordable as viral social media campaigns. Still catching up to Compressed NFTs / cNFTs on Solana which enable cheap 1M-piece mints, but certainly great progress.

• Gas‑Sponsored Social Onboarding
  Smart‑contract wallets can subsidize users’ first few transactions, e.g., offering a free first coffee or zero-fee trades, to turn cold wallets into active community members through frictionless token interactions.

Gaming & Mobile Apps

• Seamless In‑Game Economies
  Pre‑funded gas credits unlock dozens of micro‑transactions per play session. Imagine a batch transaction of crafting, marketplace bids, loot claims, all in one go. This delivers AAA mobile‑game UX with no popups.

• Dynamic Session Compression
  Clients record actions off‑chain and commit a single, compressed blob at session end. This is like zipping a bunch of files before upload, keeping gas costs smooth and predictable.

Enterprise & Infrastructure

• Enterprise‑Scale Staking + Custody
  Raising validator caps to 2,048 ETH can reduce node counts by 64 times for large staking pools. Imagine consolidating multiple offices into one headquarters for massive efficiency gains and a more diverse “business district.”

• Stateless + Light‑Client Services
  EIP‑7685’s state‑hash unification primes Ethereum for Verkle trees, enabling stateless clients. This shift will like streaming content on demand vs. carrying around a full library of books or CDs.

• Data‑Availability Middleware
  Blob proofs can power off‑chain DA networks aka middleware that guarantees 99.99 % availability, much like a CDN guarantees fast content delivery across the globe.

SDKs & Tooling

• Gas‑Sponsor & Relay Libraries
  New JS/TS SDKs will wrap bundler selection, fee estimation, and gas sponsorship into one simple function call—akin to integrating a payment API for credit card transactions.

• Calldata Compressors & Multi‑Call Optimizers
  Hardhat/Foundry plugins analyze contract flows, auto‑batch calls into blobs, and surface gas‑savings estimates at compile time, just like a code linter highlights inefficiencies. Big quality-of-life perk for developers.

• Observability Dashboards
  Metric suites for blob utilization, sponsor ROI, and proto‑dank load distribution will emerge, offering premium analytics for builders who need fine‑grained visibility.

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Post-Pectra: Time to build and upgrade

Pectra doesn’t grab headlines with flashy features. It doesn’t reinvent Ethereum. It reinforces it by strengthening the core, while raising the ceiling of what’s economically and experientially possible on-chain.

Entire categories of products that once sat on the edge of viability are not only feasible, but fundable and scalable. This is a commercial tipping point for Ethereum that removes huge barriers for mainstream UX, cements Ethereum’s accelerating upgrade cadence, and unlocks entirely new product categories, from micro‑perps to consumer apps.

It’s time to start prototyping Pectra‑native features now and seize the new advantages that Pectra brings. The next generation of Ethereum‑powered products is coming.

What does the path to crypto's mainstream adoption look like?

When you look beyond the noise and speculation, that’s the only question that matters. As investors, our job is to map out the path to adoption because it's where we'll find the next 100x opportunity.

But the best venture investors don't predict the future. They see the present with great clarity. One thing is clear about the year ahead: 2025 will be a turning point for the crypto industry.

Imagine the state of the Internet if Jeff Bezos went to jail for online book sales.
If Steve Jobs were sanctioned for launching the App Store?
Or, if Jensen Huang was forced to build Nvidia outside of the US because Operation Chokepoint closed his bank account?

That's the twilight zone that our industry is emerging from.

2025 marks the first time in blockchain's history that entrepreneurs, regulators, and policymakers can finally unblock the path to adoption.

Facing the now-open road, we return to our original question: What lies ahead on the path to adoption? Where will the biggest opportunities emerge—the next 100x or even 1,000x investment?

As "SoLoMo" (social / local / mobile) unlocked the Internet's potential in the 2010s, the convergence of three mega-trends will unlock crypto adoption from 2025 onwards:

• Gateways: bringing the legacy financial system onto blockchain rails;

• Developers: making it easy to build on the Internet’s native economic layer; and

• Applications: building meaningful applications for everyday life onchain.

  

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Gateways

Wall Street has undergone a 50-year-long software upgrade, from the introduction of electronic trading in the 1970s to the digitization of payments today. The steady, inevitable march of software eating finance has taught us one thing: All financial assets eventually migrate to wherever they can flow most freely, trade most efficiently, and command the highest value.

Today, blockchain networks secure $3 trillion in crypto assets (Bitcoin, Ethereum, etc.) and a small but mighty base of asset-backed tokens (tokenized dollars and Treasuries). The total financial assets held globally by households, governments, and corporations exceeds $1,000 trillion ($1 quadrillion!). That leaves 300x of potential growth still ahead of us.

Which inning are we in? The players haven’t even left the buses. The global balance sheet is now beginning its migration to blockchain rails. To succeed, we’ll need gateways that bridge us from the legacy financial system.

We must scale platforms that can effectively onboard new users and existing assets. Regional on-ramps like Bitso in Latin America are processing over 10% of US-Mexico remittances using blockchain. Tokenization platforms like Ondo are going head-to-head with Franklin Templeton and BlackRock to bring $20+ trillion of US Treasuries onchain.

Crypto is giving rise to the first truly global capital markets, enabled by real-time settlement and borderless liquidity. But global markets need global trading venues. Exchanges like Figure and Avantis are bringing together global supply and demand, while transforming markets in FX, credit, and securities.

Finally, we need products that work with existing systems, not just a parallel crypto universe. They may look like Fordefi's advanced wallet for institutions. Or, like TipLink's easy, grandma-friendly solution for sending payments.

What will it look like when we get there? We believe there will come a day when your net worth is worth more onchain than offchain. Once migrated onchain, your wealth can flow instantly across the world. It can trade cheaply without middleman fees and access global demand to achieve its highest value. That’s the point of no return.

Developers

There are ~100,000 developers building on blockchains today. That's one-half of a single Silicon Valley tech giant. To enable mainstream adoption, we need to increase that by 100 times and onboard 10 million developers.

Unlocking the creative potential of blockchain technology is paramount. Just as better tools for mobile developers unlocked the potential of Apple's App Store, we need tools that simplify building onchain apps and creating useful new products.

In 2025, the blockchain development stack will take a major leap forward. A crucial step depends on making blockchains themselves more developer-friendly. Scaling solutions like Arbitrum's optimistic rollup tech have created crypto's first "broadband moment." But, upgrades like Arbitrum Stylus may have a greater impact. Stylus enables developers to write smart contracts in multiple major programming languages like C, C++, and Rust, opening the door to over 10 million developers globally.

Zero-knowledge technology was once considered too intimidating for practical development. But, new tools like StarkWare's development kit are making zero-knowledge implementations easier than ever before. Today, zk-proofs are powering products like Freedom Tool, Rarimo’s blockchain-powered voting tool, already deployed in Russia, Georgia, and Iran to improve democratic participation.

The tools and infrastructure supporting blockchain development will play a vital role in driving progress. Platforms like Alchemy are helping developers to build and deploy onchain applications at scale. By streamlining the development process, Alchemy has already helped many projects achieve success, from decentralized finance (DeFi) protocols to gaming applications. As the blockchain ecosystem continues to evolve, it's imperative that these developer platforms keep pace, allowing developers to push the boundaries of what's possible onchain.

In 2025, the multichain universe will keep growing, likely at an accelerated pace. As developers face more complex challenges, new chains are emerging to tackle them, each with its own strengths and weaknesses in computation, execution, or decentralization. To cater to specific use cases like gaming or trading, application-specific infrastructure like B3 is taking shape. This explosion of chains, Layer 2s, and appchains demands seamless connectivity, which is where cross-chain liquidity solutions like Everclear and interoperability protocols like Omni come in – freeing developers to focus on building novel applications.

Web development has progressed from raw coding to intuitive no-code solutions, with AI now taking the wheel. We expect a similar evolution in blockchain development on the horizon. Each wave of technical advances and developer-focused tools will usher in a fresh wave of talent. Ultimately, building on-chain applications may become as simple as a conversation with ChatGPT.

Applications

How many people are onchain today?

By most estimates, the number is around 80 million onchain users. Much of that growth comes from crypto's appeal as "Wall Street 2.0" - a new place to raise capital, speculate, and send money. But expanding 100x to 8 billion people will depend on crypto's shift from Wall Street to Main Street.

2025 will likely be the tipping point for crypto's mainstream adoption. It will be a "FarmVille moment" for blockchain technology. FarmVille was Facebook's first social gaming hit. It drove the network's first exponential growth, turning it from a photo-sharing app into a global platform.

Crypto is accelerating toward its own "FarmVille moment." Onchain features are being integrated into new games and social applications. Gaming studios like InfiniGods are creating first-time onchain users. Their mobile casual game, King of Destiny, has already over 2 million app downloads over the past year, bringing people onchain who spend more time on Candy Crush than Coinbase.

Onchain gaming, social, and collectibles activity comprise ~50% of today's unique active wallets. As we onboard a diverse user base that engages in onchain commerce, it's clear that blockchains will disrupt more than just Wall Street.

A new class of "productive" apps is ushering in a new Industrial Revolution. The rise of corporations is giving way to the rise of Industrial Networks. Also known as DePINs, these applications focus on underserved markets in areas such as wireless connectivity, hyperlocal data, and human capital. They achieve this through on-chain coordination and market-driven mechanisms. Hivemapper is a decentralized mapping network that has mapped more than 30% of the world's roads, thanks to over 150,000 contributors, capable of more up-to-date and precise data than Google Maps.

Importantly, these “productive” applications are tapping into genuine revenue streams. In 2025, we believe the DePIN sector will exceed 2024's annualized revenue of $500 million. These industrial-grade cash flows provide a path to profitability based on real-world utility, setting up a strong commercial engine for new capital to flow into the onchain economy.

But how do we get these applications into the hands of 8 billion people? 2025 will see new distribution models that are capable of reaching hundreds of millions of consumers at scale. Crypto exchanges like Coinbase, Kraken, and Binance are creating their own chains to bring customers onchain. Telegram and Sony are incorporating Web3 features into their platforms with massive reach. Gaming companies are relaunching beloved games like MapleStory with onchain features, potentially converting millions of players. Institutions like PayPal and BlackRock are introducing onchain finance and payment solutions.

The convergence of these trends in 2025 will lead to a critical inflection point. When the average person has a reason to spend 60 minutes a week onchain, "being onchain" can become the new "being online.” Forget the “killer app.” Just as we swipe between apps on the Internet, people will have many reasons to spend time onchain. They may do it for fun, connection, or money. At that point, the onchain economy will be on pace to become a part of our everyday lives.

Looking Forward

The coming year will kick off an era where blockchain technology begins to blend into our daily lives, much like the Internet. The transition from Wall Street to Main Street isn't just happening — it's accelerating, driven by applications in entertainment, commerce, and practical utility.

In order to get there, we’ll need to invest in more accessible gateways, improved technology and developer tools, and applications that solve real-world problems. The path ahead of us in 2025 is still full of 100x opportunities, as crypto’s mainstream adoption becomes a reality. As a wise person once said: “The best way to predict the future is to create it.”

What if I told you that an asset with:

• $1 trillion market cap (60% larger than Visa)

• $26 billion of daily trading volume (250% more than Apple)

• 50% annualized volatility (20% less than Tesla)

• 220+ million holders globally (# of countries with populations of 220+ million: Six)

… was ignored and exiled from the world’s “leading” financial institutions for 10 years? Would an ETF satisfy you?

No. Not when Bitcoin continues to be one of the world’s most under-served and under-financialized assets, relative to its size and scale.

Bitcoin is the most neglected asset in the world.

Bitcoin is one of the most unique assets in the crypto ecosystem. Its market cap and volumes are ~2.5x greater than Ethereum. The Bitcoin network serves as a digital Fort Knox. It's a fortress backed by ~500 times the computational power of the world’s fastest supercomputer. There are over 200 million Bitcoin holders vs. 14 million Ethereum holders globally. And Bitcoin still stands alone in a sea of regulatory gray - recognized, classified, and treated as a digital commodity.

If Wall Street’s financial system won’t build for Bitcoin, then Bitcoin will have to build a financial system for itself.

If blockchain technology can help bank the unbanked, the most obvious route is through Bitcoin’s global distribution in Latin America, Africa, and Asia. This already encompasses millions of people. If we expect trillions in value to eventually flow on-chain, there’s no network more secure or resilient than the Bitcoin network. As Bitcoin reaches a billion people and more, they’ll want to do more than store and move their assets. Capital and technology rarely stand still. This time is not different.

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Bitcoin is Technology

As much as Bitcoin has been neglected as an asset, it may be even more neglected as a technology. Bitcoin has lagged behind in scalability, programmability, and developer interest. My first attempt at building on Bitcoin was in 2015, during the earliest days of J.P. Morgan’s crypto R&D. There was little to explore beyond colored coins and sidechains. Those were early ancestors to today’s NFT renaissance and Layer-2 rollups.

The verdict at the time was: it’s too damn hard to build on Bitcoin. Ask David Marcus, former President of PayPal and Co-creator of Meta’s Diem stablecoin. He's now building Lightspark, a Bitcoin payments company. David tweeted recently:

“Building on Bitcoin is at least 5x harder than building with other protocols.”

As money and technology, Bitcoin’s blessings are its curses:

• Resistance to change: This anchors Bitcoin’s robustness, but also its sluggishness. Upgrades are difficult to approve and can take 3-5 years to install.

• Simplicity in design: This makes Bitcoin less exploitable, but also less flexible. The Bitcoin blockchain’s UTXO model is well-fit to serve a simple transactional ledger for payments. Yet, it's mostly incompatible with complex logic or loops you need for more advanced financial applications.

• 10-minute block time: This helps keep the Bitcoin network synchronized with 100% uptime since 2013 (a rare achievement), but disqualifies it from a large swath of consumer experiences.

Today I’m seeing signs that Bitcoin’s developmental malaise is a temporary, non-structural condition. A decentralized financial system may finally be emerging with Bitcoin at its foundation. Its potential is similar or greater than DeFi on Ethereum today, albeit following a different evolutionary path.

Why Now?

Over the past several years, Bitcoin has unlocked a new developmental trajectory:

• Taproot upgrade (Nov 2021): An upgrade that expanded the amount of data and logic that Bitcoin transactions can store.

• Ordinal inscriptions (Jan 2023): A Taproot-enabled protocol for inscribing rich data to individual satoshi’s (2.1 quadrillion in total). This enables a metadata layer for non-fungible tokens.

• BRC-20 tokens (Mar 2023): A type of Ordinals inscription that enables deploy, mint, and transfer functionality.

The unleashing of fungible and non-fungible assets kicked off the first waves of DeFi and NFT activity on Ethereum in 2016-2017. Early signs of that same growth are now bubbling to the surface. Bitcoin average fees per transaction rose 20x in 2023, driven by Ordinal inscriptions.

Bitcoin is bound to take its own path, but it’s clear that a new design space has opened up for Bitcoin builders.

Larger macro trends have ignited a psychological shift within the Bitcoin community and renewed appetite from Bitcoin investors for decentralized finance on Bitcoin:

• Layer-2 adoption: Layer-2’s like Arbitrum have dominated new DeFi activity over 2023. This shows it’s possible to scale blockchain capacity and programmability without changing the base layer.

• Acceptance by traditional institutions: Bitcoin broke through a major regulatory hurdle with its ETF approval, pulling capital flows and entrepreneurial mindshare back into its ecosystem. BlackRock and Fidelity are activating the slow-but-powerful engines of Wall Street. Trading houses are licking their chops and looking for every marginal source of Bitcoin liquidity. This could soon draw them into DeFi, especially with new institutional DeFi gateways like Fordefi.

• Failures by crypto-native institutions: When counterparties like FTX, BlockFi, Celsius, and Genesis fell, it was crypto’s homegrown Global Financial Crisis. An entire generation of investors has soured on trusting their Bitcoin to centralized financial services.

In hindsight, it will be obvious: Technological unlocks and macro trends are converging towards a breakthrough moment for DeFi on Bitcoin. Now is the time to seize that moment.

The Half Trillion Dollar Opportunity

The prize for enabling DeFi on Bitcoin is tantalizing. Beyond the social and economic importance, every early builder and investor should ask: What if it works? How much is DeFi on Bitcoin worth?

Ethereum, valued at ~$300 billion, hosts much of today's DeFi activity. DeFi applications built on Ethereum have historically ranged between 8% and 50% of Ethereum’s market cap. They currently stand at about 25%. Uniswap is the largest DeFi application on Ethereum, valued at $6.7 billion or ~9% of all DeFi apps on Ethereum.

If DeFi reaches Ethereum's proportions on Bitcoin, we could expect the total value of DeFi applications on Bitcoin to be worth $250 billion (25% of Bitcoin). Over time, it could range between $72 billion and $500 billion (8% and 50%). This assumes no change in Bitcoin’s current market cap.

The leading DeFi application on Bitcoin could eventually be valued at $20 billion (2.2% of Bitcoin), ranging between $6.5 billion and $40 billion. This would place it squarely in the top 10 most valuable assets in the crypto ecosystem. Bitcoin is nearly back to being a trillion-dollar asset. Yet, it still holds an untapped half-trillion dollar opportunity.

Looking Ahead

Over the past three years, a wave of progress towards Bitcoin programmability has been building on the horizon. Examples include: Stacks, Lightning, Optimistic rollups, ZK-rollups, Sovereign rollups, Discreet Log Contracts. More recent proposals include Drivechains, Spiderchain, and BitVM.

But the winning solution won’t break through on its technical merits alone. The winning approach to enabling DeFi on Bitcoin will need the following:

• Economic alignment with Bitcoin: Any programmable Bitcoin layer should tie directly to Bitcoin’s economic value and security. Otherwise, users may see it as hostile or parasitic to Bitcoin. Alignment can take the form of bridged BTC as L2 collateral and gas payments. It can also involve using the Bitcoin network for settlement and data availability.

• Viability without base layer changes: Some proposed solutions need a hard or soft fork of Bitcoin. This means a system-wide upgrade. Considering how rare these are, it’s unlikely that these will be early contenders. However, some are worth pursuing long-term.

• Modular architecture: The winning solution needs to be upgradeable enough to incorporate new technical advances. We already see the state of the art shifting in on-chain custody, consensus design, VM execution, and zero-knowledge applications. Semi-closed systems with proprietary stacks won’t be able to keep up.

• Trustless bridging: Bridging assets from one chain to another is incredibly hard. If done right, it's as challenging as interplanetary transport, given the potential mishaps involved, from latency mismatch to debilitating exploits. Few decentralized bridges have been attempted and validated in the wild. One example is tBTC, which continues to evolve its design and decentralization.

• A relentless ground game: Two audiences matter for growth. 1) Current Bitcoin holders, and 2) Future Bitcoin builders. Both are dispersed in esoteric ways. Exchanges hold approximately 10-20% of the total supply of Bitcoin. Around $10 billion of Bitcoin sits in various tokenized forms on Ethereum. Developer mindshare is spread across a multi-chain, multi-layer stack. Onboarding both groups will need a “meet them where they are” mindset.

Bitcoin’s age of neglect may finally be coming to an end. In the post-ETF era, Wall Street is finally realizing the obvious about Bitcoin as an asset. The next era will be about Bitcoin as technology and the re-ignited excitement to build for Bitcoin.

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[Note: This post was co-published in the February 2024 issue of the Pantera Blockchain Letter.]