Top 10 Expectations for Web3 in 2024

This article outlines 10 major trends expected in Web3 for 2024. These include simplified user experiences through new developer tools, democratized AI enabled by decentralized blockchains, decentralized physical infrastructure using IoT and blockchain, formal verification for robust smart contracts, scaling through rollups which can outpace Ethereum layer-1, phygital marketing merging online and offline strategies, explosive growth of web3 gaming, tokenization of real-world assets like real estate on blockchain, increased interoperability between blockchains, and evolving regulatory frameworks like the EU's MiCA.

1. Simplified User Experiences

Developers are actively building tools to simplify frontend web3 experiences massively. Innovations like smart accounts, embedded wallets, and advanced endpoints may abstract away complexity, allowing frictionless onboarding.

For instance, account abstraction enhances user experience by embedding transaction validation processes, like signature verification and gas payments, into wallets and dApps. This simplifies transactions and fosters user adoption, making it easier for new users to navigate the Web3 ecosystem.

In addition, developers are exploring alternative solutions to account abstraction that help accomplish the goal of simplifying Web3 experiences. For instance, Particle's Modular Smart Wallet-as-a-Service tools allow developers to tap into MPC-TSS and social dApp-embedded wallets accessible through users' Web2 accounts, enabling a seamless experience with maximum flexibility.

2. Democratized AI and Compute

Decentralized blockchains may counterbalance centralized AI development, allowing permissionless innovation. Crypto’s open compute markets may drive down costs, making AI more accessible. Blockchains also enable tracking content origins to combat AI disinformation.

• Democratizing AI: Decentralized, open-source crypto networks will democratize AI innovation, ultimately making it safer for consumers.
• Cost Reduction: Crypto's open compute markets will drive down costs, making AI more accessible to a wider audience.
• Content Tracking: Blockchains can enable tracking content origins to combat AI disinformation .
• Model Training: Blockchain-based AI model training platforms can reduce the cost and complexity of AI development, fostering an environment of trust, accountability, and innovation in AI development.

3. Decentralized Physical Infrastructure

Blockchain-connected IoT sensors are enabling decentralized physical infrastructure networks (DePIN) for energy, telecoms, transportation, manufacturing, and utilities. These remove single points of failure, better distribute demand, lower costs, and increase transparency between infrastructure operators and consumers. For example, a blockchain-enabled decentralized energy grid allows consumers to also provide excess renewable energy back to the network. This democratizes infrastructure access.

4. Robust Smart Contracts

A new generation of developer tools may bring formal verification methods to smart contract programming. Given the financial stakes, these contracts need bulletproof code, which is now becoming possible for more developers.

By subjecting smart contracts to formal verification , developers can uncover potential flaws or vulnerabilities in the code and address them before deployment, thereby enhancing the overall reliability and security of smart contracts. This shift towards formal verification methods in smart contract programming is expected to have a profound impact on the development of robust smart contracts, ultimately contributing to the increased trust, transparency, and integrity of decentralized applications and blockchain-based transactions.

5. Rollups -> Gas Pedal

Combined ETH layer-2s and rollups are predicted to reach 10 times the layer-1 transaction count.

Rollups are a crucial component of Ethereum's scaling efforts, aiming to increase transaction throughput and reduce costs. They achieve this by processing multiple transactions off-chain and then submitting them to the main chain, reducing the computational load on the base layer. As a result, rollups have the potential to significantly outpace the transaction count and TVL of the Ethereum layer-1 network, contributing to its overall growth and scalability.

6. Going Phygital

Phygital marketing, the merging of online and offline marketing strategies, is expected to be a significant trend in 2024. This approach aims to create seamless experiences that break the line between the physical and digital worlds, enhancing and personalizing customer experiences. Some key aspects of phygital marketing include:

• Integration of technology: AI, NFC tags, digital kiosks, and QR codes are being used to create seamless experiences that blend the physical and digital spheres.
• Consumer preferences: 63% of shopping experiences begin online, but many people still prefer shopping in physical stores, indicating a strong demand for phygital marketing strategies.
• Digital kiosks and menus: Virtually scannable menus and digital kiosks have become commonplace in many restaurants, offering customers a more personalized and interactive experience.

7. Games Games

In 2024, Web3 gaming is expected to reach new heights, with several predictions shaping the landscape of this emerging industry. Here are some key points:

• Mainstream adoption: Web2 game giants are expected to leap into Web3 gaming , expanding their presence on major app stores and offering more immersive experiences. The gaming token market is predicted to grow significantly.
• Increased focus on mobile blockchain games: Animoca Brands' CEO Robby Yung anticipates a surge in the number of Web3 mobile games released in 2024.
• Expansion of sports Web3 gaming: Sports-focused NFT games are expected to see strong revenue numbers, incentivizing users to play and own digital assets.
• Rights holders and partnership failures: In 2024, rights holders may struggle with high minimum guarantees, and partnership failures could occur due to price points and 'fan market fit'.

8. Tokenization of Assets

Tokenizing real-world assets like real estate can make transactions faster, more transparent, and accessible to more investors. Commercial real estate tokenization could allow instantaneous transactions. Tokenization of real-world assets creates virtual investment vehicles linked to tangible assets like real estate, art, and precious metals. This allows for efficient 24/7 trading of items that traditionally could only be done during "working hours".

By lowering costs by removing middlemen like lawyers, brokers, and banks, and enabling fast, efficient trading, tokenization of real-world assets is gaining momentum and interest from traditional finance players. According to a report by Roland Berger , the market value of tokenized real-world assets is predicted to surpass $10 trillion by 2030. Tokenization to reshape asset funding, trading, and management, impacting all sectors.

9. Interoperability and Scalability

The lack of interoperability between different blockchain networks is one of the challenges in scaling Web3, which results in slower transaction speeds and higher fees, limited user experience and accessibility, and inhibited growth and adoption. However, interoperability is key in Web3 as it enables seamless communication and collaboration between different blockchain networks, providing users with a broader range of options.

One approach is the use of bridges, which are smart contracts or protocols facilitating the transfer of assets between different blockchains. They essentially lock up assets on one chain and release equivalent assets on another. Another method is through sidechains, which are secondary blockchains connected to the main blockchain, allowing for interoperability with the primary chain. Additionally, cross-chain platforms like Polkadot and Cosmos aim to create an interoperable ecosystem where multiple blockchains can communicate with each other.

10. Regulatory Developments

As Web3 technologies gain more mainstream attention, regulatory frameworks around the world are likely to evolve. Clearer regulations are anticipated to emerge globally, providing comprehensive regulatory frameworks for blockchain technology and cryptocurrencies.

The European Union's regulatory framework for crypto, MiCA, is expected to take effect in late 2024, effectively banning certain activities.

In addition, the rise of central bank digital currencies (CBDCs) is expected to continue in 2024, with several countries exploring the development of their own digital currencies.

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