Blockchain protocols are maturing, reaching consumer readiness. L2 ecosystems offer abundant block space, and long-speculated zkRollups are coming to mainnet. As we approach the end of 2023, the Shanghai upgrade and proto-dank sharding will be complete; Ethereum 2.0 will be nearing its final stages offering new scalability, security, and energy. As an EVM chain, Cronos will benefit from minimised data costs, while latency and responsiveness will be better than ever.

Despite this progress in infrastructure protocols, there is still a clear gap in consumer-grade dapps to run on this infrastructure. The Fat Protocol Thesis, which claims a blockchain's primary value lies at the protocol level doesn’t necessarily hold true any longer since the rise of cross-chain infrastructure enables dApps to function across multiple protocols, reducing the significance of protocol monopolies.

In addition to the strong foundations supporting dApp builders, there is buoyant market sentiment and regulatory battles are shaping the crypto industry for increased adoption in commerce, business, and society. While some innovative dApps may catch fire too quickly to be regulated, recent rulings like the XRP classification are regulatory wins for the crypto space. Positive market dynamics are further supported by Bitcoin's next halving event scheduled for April 2024, the FED's potential easing of monetary policy, and BlackRock's application for a Bitcoin ETF.

The confluence of crypto with artificial intelligence accelerates this favorable outlook. It's hard to find two technologies more of the zeitgeist, and it is at this intersection where the focus of the Cronos accelerator falls. By 2025, the market size of Web3 and AI is projected to reach $39.7 billion and $126 billion, respectively, offering ample opportunities for designers to create impactful and user-centric products that contribute to the ongoing digital revolution.

While big tech has favored centralized AI models, Web3 aims to democratize AI for broader accessibility and neutrality. Generative AI systems exhibit remarkable speed in generating ideas, but business transformation takes time and needs effective change management. Consumer applications are likely to lead the way in adoption, poised to drive rapid innovation, building on the Cronos chain offers a significant advantage, granting access to Crypto.com's 80 million active user ecosystem.

Web2 betting sites face problems like frozen/stolen funds and users getting de-platformed for being too profitable. A gap exists in the market, apps like Rollbit have been on the rise, and Polymarket, one of the largest decentralized crypto prediction platforms, has ~1,000 monthly active users.

In 2023, liquid staking protocols and liquid staking tokens (LSTs) in DeFi gained significant momentum. The Shapella upgrade drove this trend, with over half of ETH stake in liquid form by the end of Q2 2023, including Coinbase's cbETH, which saw a 25% year-to-date increase, enhancing liquidity and creating more opportunities in DeFi. LS Tokens enable DeFi applications to benefit from predictable, low-risk, and crypto-native real yield.

Crypto derivatives account for 79% of global crypto trading and will remain vital. Perpetual futures are popular among both retail and institutional traders for their efficiency, while decentralised options have historically struggled with retail appeal. DOVs simplify options indirectly, democratising retail trading.

Strategy Vaults has undergone continuous refinement progressing from simple approaches like Auto-compounding Vaults and leverage yield farming Vaults. As DeFi continues to progress, more sophisticated strategies have come up in recent months - which include more advanced automated UniV3 rebalancing Vaults (such as Arrakis) and Vaults designed to replicate Market-Making strategies (like Hyperliquid).

Trading bots, primarily focused on Telegram, are emerging as a tool for exposure to crypto markets and services in the sluggish market. Cumulative trading volume surpassed $190 million by early August 2023. This is for numerous reasons; Telegram's role as an essential social network for crypto allows it to serve as a convenient tool for trading, marketing, and address propagation. The TG Bot Token is also seen as a meme, appealing to anti-institutional sentiment.

New and interesting ways for traders to experiment always attract interest. For example, Maverick Protocol is newly launched capital efficient DEX that differs from most other AMMs. Maverick uses liquidity bins; price discovery within a bin uses a constant-sum curve, allowing for 0 slippage trades. It allow allows incentivized pools, custom liquidity shaping, custom fees, and directional liquidity provisioning.

Insufficient privacy in DeFi raises the potential harm to consumers, as it allows other blockchain users to access transaction history and asset holdings, leaving users vulnerable to fraud, social engineering, and asset theft by malicious actors. Zero-knowledge proofs offer potent protection for user privacy, safeguarding personal information, data, and financial actions. They assure compliance while preserving pseudonymity, like verifying non-citizen status in sanctioned states or accredited investor status.

Post the 2023 banking crisis, diversifying on-chain treasuries is critical for crypto-native entities. Correlation among native crypto assets limits diversification. Tokenized Treasury Bonds offer higher returns and lower risks than some DeFi protocols, making real-world assets (led by U.S. Treasury bonds) a popular crypto theme this year. Ondo Finance, an emerging player, with tokenization market share next to the Franklin Templeton Fund, has a $160 million TVL in OUSG, providing 5.13% APY.

In emerging markets, diversification challenges arise due to limited accessible financial services for retail users. Currency instability, inflation, a strong dollar, and ensuing political unrest emphasize BTC and stablecoins as "insurance" and "hedge." These markets require platforms for peer-to-peer lending and microfinance, bypassing traditional credit processes.

Fueled by depressed economic growth, loyalty, and rewards programs are more prominent than ever, shaping our daily interactions with platforms, services, and products. Every well-known brand, ranging from Starbucks to Disney, is actively seeking a strategy for Web3. An opportunity exists to innovate stagnant systems challenged by enterprise baggage, legacy practices, and technological incompatibility to bring new users to Web3.

Web3 can revolutionize relationships, align incentives, and enable true ownership. This reshapes the creator-audience dynamic enhancing fan engagement and activating global fanbases. Young sports fans are familiar with digital assets and eager to connect with the entertainment industry, Manchester United’s Discord has over 100,000 engaged members.

Projects that tap into the emotional side of community growth, can foster a sense of belonging, and encourage wider adoption and active participation in our ecosystem. As demonstrated in the rise of Pepe chain memes have become a powerful force within the Web3 community, transcending humor and entertainment to influence marketing and user engagement.

Web3 gaming is undergoing a dynamic shift; current games struggle to retain user engagement or generate sufficient speculation to warrant growth. The sector's complexity requires years of development and financial commitment and investment has been hindered by a stigma of NFTs among gamers. The upcoming game wave should prioritize retail-oriented, enjoyable experiences with excellent user interfaces, rather than financial products that involve excessive wallet permissions.

Driving the transformation is AI-Web3 gaming. Games have long been the frontier playground for AI, and the alliance with Web3 offers a new era of immersive, fair, and personalized experiences. AI shapes interactive game worlds by analyzing player behavior and crafting dynamic events and challenges. It enables "endless, cause-and-effect" landscapes evolving as you progress, or unique settings influenced by your actions, empowering players as architects of their gaming world.

As Web3 grows, its future benefits are indescribable. This is particularly evident in social apps, where history teaches us that the first successful social app is unlikely to resemble the current Web2 players.

We are looking for social products that grant creators content ownership and allow for flexible monetization, with the ultimate goal of enabling a new value flow system. The ideal Web3 social app offers self-sovereign identity, portable connections, customizable curation, and resistance to speech censorship. How these features manifest themselves is wide open; the more creative, weird, and wonderful, the better – focusing on building unique social worlds that drive distinctive web3-native engagement models.

Solving the wallet issue is vital for widespread crypto adoption. ConsenSys is advocating for an ecosystem-driven solution with MM Snaps, aiming to directly integrate account abstraction. Signing transactions via browser extensions is clunky and inconvenient, and key management is confusing. The multi-chain experience needs to be simplified so users can use many smart contract accounts across many chains. Wallets will become the default way for web3 users to interact and represent the future of composable, permissionless innovation.

In a growing world of generative content, it will become highly relevant to understand the provenance. Deepfakes exploit human susceptibility to believing visuals and audio; the manipulation increases the potential for fraud, disinformation, and deception, and undermines trust in institutions.

We're looking for Cronos-based applications to onboard the next billion web3 users. We are looking for teams building at the intersection of AI and Crypto, where AI brings unparalleled speed and efficiency to take products to market and decentralised infrastructure aims to democratize AI for broader accessibility and neutrality. These apps should offer Web2-like interfaces driven by Web3 tech, solving real-world needs.

A huge opportunity lies in creating apps and tools for users who have never touched a blockchain. This requires smart abstractions, intent-focused design, and user-ready solutions to overcome the current adoption hurdles.

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