GuShiio.com Cryptocurrency is moving towards a more mature stage, with rapid development in fields such as chain finance, stablecoins, and RWA. However, DAO governance, AI+ encryption, and Web3 games still face challenges, and future growth will depend on technological breakthroughs and regulatory evolution.
Author: James Morgan
Compilation: Vernacular blockchain
Cryptocurrency is now in a more mature and clearer stage than ever before. Although there is still a hype cycle in the market, many areas in the industry have demonstrated product-market fit (PMF) and have practical application value beyond speculation. Other areas are still in the experimental or problem stage, and unresolved challenges hinder large-scale adoption.
This article will examine the key drivers driving mass adoption, explore segments where success has been achieved, and those where significant obstacles are still being faced.
1. Core technology drivers: the cornerstone of cryptocurrency growth
1) Low-cost block space: L2 and high-throughput L1
A major breakthrough in the crypto industry has been the significant reduction in transaction costs. The introduction of scalable Layer 2 (L2) Rollup and high-throughput Layer 1 (L1) blockchain makes it easier for developers to build efficient, easy-to-use applications.
L2 extensions-Ethereum Rollup solutions such as Arbitrum (arbitrum.io), Optimism (optimsm.io) and Polygon (polygon.com) provide faster, lower-cost transactions while maintaining a high degree of decentralization and openness.
High-throughput L1 alternatives- Solana (solana.com), Aptos (aptosfoundation.org), and Sui (sui.io) use parallel execution and different decentralized trade-off strategies to achieve high-speed, low-cost transactions.
Reason for growth: Lower transaction costs have lowered barriers to entry for developers and users, driving the accelerated adoption of areas such as DeFi, games and asset tokenization.
2) Wallet upgrade and seamless user experience (UX)
A major obstacle to cryptocurrency adoption is the complex entry process, but this issue has been greatly improved and will continue to be optimized in the coming months.
Smart contract wallets-Smart wallets such as Safe (safe.global) and Coinbase-smart-Wallet (coinbase-smart-wallet) introduce gas-free transaction, automatic recovery, and multi-signature security mechanisms. It also supports user gas fee payment and chain abstraction, greatly improving the user experience.
Social login and keyless authentication-With tools such as Web3Auth and Privy, users can directly access their wallets through their email or mobile phone number, eliminating the need for cumbersome mnemonic management.
Crossschain Intention-Advanced wallets and DApps are integrating cross-chain infrastructure and supporting standards such as EIP-7683, allowing users to seamlessly manage multi-chain assets and execute transactions through an “intent mechanism.”
Reasons for growth: Lowering interaction barriers to make it easier for non-technical users to enter, and the experience of encryption applications is gradually moving closer to traditional financial technology, promoting broader adoption.
2. The crypto industry landscape in 2025: Bitcoin, a successfully verified and rapidly growing encryption use case
ETF: Catalyst for institutional admission
One of Bitcoin’s most important financial milestones was the approval and launch of the U.S. spot Bitcoin ETF, which triggered a large amount of institutional investment. For the first time, regulatory clarity not only did not hinder cryptocurrencies, but actually promoted their development.
Institutional ETF layouts- BlackRock, Fidelity, and Grayscale have now launched regulated Bitcoin and Ethereum ETFs, making it easier for hedge funds, pension funds, and retail investors to obtain compliant crypto asset exposure.
Capital influx-These ETFs have attracted billions of dollars in inflows, further consolidating Bitcoin’s status as a new asset class in the financial industry, making it even more attractive in the current uncertain market environment.
Recognition of traditional finance-ETFs allow institutions to hold Bitcoin and Ethereum in a compliant, tax-efficient manner, similar to the adoption model of early gold ETFs. In the next few years, more cryptocurrency-based ETFs will inevitably be launched.
Reason for growth: Bitcoin is now regarded as “digital gold”, while Ethereum may be compared to “income-based bonds.” The broad interest of the institution confirms its value as a long-term hedge against inflation and fiat instability. As the regulatory framework becomes clearer, institutions feel more secure in entering the market, bringing more liquidity, broader adoption, and deep integration of the crypto industry and traditional finance.
3. Stable coins: The “killer” application in the payment field
stablecoins have become the most widely used financial product in the cryptocurrency field, effectively solving practical problems and inefficiencies in payments and cross-border remittances.
The circulation scale exceeded $220 billion- USDT (tether.to) and USDC (circle.com) dominate global crypto payment transactions.
Payments and remittances-Applications such as Strike (strike.me) use stablecoins to achieve instant cross-border transfers with almost zero handling fees, greatly reducing international payment costs.
Traditional finance (TradFi) adopts- Coinbase connects TradFi and DeFi through Base, PayPal has launched PYUSD, and major banks are also exploring the application of token-based deposits.
Better payment network- SpaceX uses USDC to process payments for Starlink customers, especially in countries with large currency fluctuations, using stablecoins to avoid foreign exchange risks and optimize payment processes.
Reason for growth: Stabilicoins provide a faster, cheaper and more efficient way to transfer funds and have natural advantages over traditional banking systems. In the end, users may not know which payment network they are using, but stablecoins will undoubtedly replace traditional, slow and inefficient payment infrastructure.
4. DeFi: The cornerstone of online finance
Despite facing security breaches and market fluctuations, the DeFi protocol remains a core pillar of on-chain finance and continues to grow. I have always believed in DeFi’s huge advantages in terms of permissionless, decentralized and fair financial services.
On-chain borrowing-Agreements such as Aave and Compound provide instant, unlicensed credit markets without the need for the intervention of traditional financial institutions.
Automated Market Makers (AMM)-Decentralized trading protocols such as Uniswap and Curve process billions of dollars in transactions every day without intermediaries and improve market liquidity.
Real-world asset (RWA) tokenization- Ondo Finance and Maple Finance introduce traditional financial assets onto the chain to achieve a more efficient financial infrastructure.
Reason for growth: DeFi has a faster, more efficient, globally accessible financial system while offering higher yields than traditional banks. Composable Money makes capital flows more flexible, promotes the continuous emergence of innovative financial models, and at the same time integrates with existing financial concepts to create new growth points.
5. Real-World Asset (RWA) Tokening: The Future of Institutional Adoption
RWA is one of the areas of greatest interest to institutions. Major financial institutions are actively tokenizing assets such as bonds, real estate and raised credit to promote the migration of traditional finance to the chain.
To raise credit bonds-Companies such as Centrfuge (Centrfuge.io) tokenize debt instruments, lower financing thresholds and make capital easier to obtain.
Fragmented ownership-Related platforms allow users to hold real-world assets such as real estate by share, lowering investment thresholds and improving market liquidity.
Collectibles support physical asset custody, tokenization and trading as platforms such as RWA — Courtyard.io, making the collectibles market more transparent and tradable.
Reason for growth: Introducing traditional financial assets into the chain makes capital markets more liquid, efficient and transparent, creating new opportunities for institutional investors.
6. Memecoins: Turning speculation into a “function”
Despite criticism, Memecoins remain the most persistent speculative asset in the crypto market and continue to attract capital and attention.
The rise of popular Tokens-Memecoins such as PEPE, DOGE, and SHIBA have a market value of billions of dollars, and thousands of new Meme Tokens are even emerging every day.
Trading volume exceeds “serious” Tokens-in some periods, Memecoins trading volume even exceeds mainstream crypto assets, and even the president and his team are involved, boosting market sentiment.
Reason for growth: Speculation is a human instinct, and Memecoins cleverly combines viral spread, cultural resonance and a “gambling-like” trading experience to make the crypto market more entertaining. “Meme Token” and “Meme Infrastructure” will continue to rise and fall repeatedly in the market and become a part of the ecology that cannot be ignored.
7. Digital product passports (DPPs) and product tokenization
Luxury brands and companies are using blockchain-based verification systems to improve product authenticity and supply chain transparency.
DPPasS-Platforms such as Arianee and Crossmint are driving the development of DPP solutions, while multiple non-blockchain DPP service platforms (DPaS) are joining the competition.
Luxury brands are leading the trend-Luxury brands such as LVMH, Prada, Breitling, and Cartier have taken the lead in adopting DPP technology and are pushing the entire high-end consumer goods industry closer to blockchain verification.
EU regulation promotes mass adoption-the EU’s DPP regulatory framework is an important driver of growth in this sector. However, if the EU relaxes regulations, the process may be delayed. However, no matter how regulation changes, blockchain is still the ideal technical support for product passports (DPP) in multiple scenarios such as authenticity verification and traceability.
Reason for growth: Companies need transparent, anti-counterfeiting product tracking systems, and upcoming regulations (such as the EU’s DPP initiative) are accelerating adoption of this trend.
8. Problems areas that still exist
Although certain areas of the crypto industry have proven their value, there are still some tracks that are in an uncertain, overhyped or early experimental stage. These areas face technical, regulatory or adoption challenges, and until these issues are resolved, mass adoption will remain difficult.
DAO (Decentralized Autonomous Organization)-low governance participation, inefficient decision-making, and chaotic fund management are still the main pain points of the DAO. Although DAOs such as ENS and Gitcoin are operating well, most DAOs still have difficulty finding a balance between decentralization and governance efficiency. I am optimistic about the combination of AI and DAO as a possible solution-ironically, DAO may require AI to truly demonstrate its value and even expose the true nature of decentralized governance.
AI Crypto -In addition to speculation, the current practical application cases of AI + encryption are still limited. Although decentralized AI projects such as Bittensor and Render Network are interesting, they still belong to niche tracks, and the adoption of most AI Tokens still remains in low value-added applications such as Meme AI robots. The intersection of AI and encryption still requires groundbreaking practical use cases to truly explode.
Gaming Metaverse- Web3 games have not fulfilled their promises, the Play-to-Earn model has almost died, and blockchain integration has reduced the gaming experience. The hype of the metaverse has cooled down, and the failure of some high-profile projects (such as Meta’s VR strategic transformation and Decentraland’s stagnation) shows that users are not willing to enter the virtual world just for the “metaverse.” However, I still look forward to the development of AR (augmented reality) glasses, which may bring a hybrid “meta-metaverse” experience and promote a new round of exploration in the industry.
9. Final thought: What is the next step?
As the crypto industry continues to evolve, the next round of growth is likely to be driven by a combination of major technological breakthroughs, regulatory changes and emerging narratives. Here are some thoughts on the future…
On-Chain Finance will further expand-stablecoins are still growing at a high speed, and RWA Tokenization will integrate traditional capital markets and DeFi, which is expected to attract trillions of dollars in institutional capital inflows. The key issue is the speed of regulatory progress, which will determine whether this change can truly be implemented.
Bitcoin’s role will change-as ETFs attract institutional investment, Bitcoin may gradually encroach on its share of the global digital reserve asset market, or it may remain just a store of value that lacks scalability, being replaced by a more functional blockchain.
Pledging ETH ETFs will disrupt traditional finance (TradFi)-once ETFs that support pledged earnings go online, Ethereum could become the first cryptocurrency to be considered an “income-based asset”, changing the portfolio structure and posing a direct challenge to the bond market.
Identity authentication will become a key area-as AI deep counterfeiting, fraud and robotic activity explode, crypto-native identity solutions (zero-knowledge proof, WorldCoin, DID standards) will either gain widespread adoption or become regulatory nightmares. If the latter happens, we may become “digital puppets” of AI or governments and enterprises.
Token-based commodity consumer-grade adoption-Can NFT break through the attributes of collectibles and integrate into real business scenarios? If brands and companies can successfully deeply integrate DPP (Digital Product Passport) and create enough value for users, blockchain may quietly become the infrastructure in the retail e-commerce field.
Memecoins and speculation will not go away-despite the controversy, Memecoins demonstrate the essence of the crypto market: speculation, community-driven and viral narrative. In the future, they may evolve into a new type of social finance, or they may just be an endless cycle of hype. But no matter what, I would not easily bet on the failure of the casino.
The next few years will determine whether cryptocurrencies are fully integrated into the global financial system or continue to exist as a high-risk, high-return “niche market.” Which narratives will dominate the next cycle? The answer is still being written.
