5 areas of interest heading into 2025
Going into 2025, there's 5 areas in crypto that I’m particularly excited about and will be following closely.
DeFi Mullet
The DeFi mullet is about integrating DeFi with the wider financial system. Fintechs like Revolut and Nubak are great at crafting slick user experiences and acquiring customers at scale. However, fintechs are still built on traditional financial rails that move money around in a slower and more expensive fashion than DeFi. DeFi is fundamentally a new backend system for finance. The DeFi mullet posits that fintechs should build on DeFi protocols so that they can focus on what they do best, UX, and DeFi can focus on what it does best, infrastructure.
We are slowly starting to see the DeFi mullet turn to reality. Protocols like Morpho are being integrated by fintechs, while companies like PayPal are creating their own stablecoins.
We are also seeing financial apps emerge that are built on DeFi from the start. Apps like Fluidkey and Gnosis Pay, look like fintechs but are built with crypto wallets and stablecoins.
The challenge for DeFi protocols integrating with existing fintechs will be the partnership work. The challenge for startups natively building on crypto rails will be the distribution. Neither challenge is insurmountable. Great teams will find a way and the prize is big.
DeSci
The DeSci community has been quietly building for a number of years, but towards the end of last year, DeSci emerged as a hot 'narrative,' which comes with its set of positives and negatives. The negative is that people will start to grift off of the momentum in an attempt to make a quick buck. The positive is that the increased attention promises to capture more long term oriented people and capital.
Ultimately DeSci is about accelerating scientific progress by bringing new treatments to market more quickly and cheaply. There are already some projects showing tangible progress on that front. HairDAO, for instance, repurposed an existing FDA-approved drug into a topical hairspray, conducted an observational study that demonstrated hair regrowth, and is now commercialising the product through its tele-health platform, Anagen. All this was accomplished at a fraction of the cost and time it takes traditional pharma companies to repurpose drugs.
Most of the entrepreneurial activity and funding has so far has centred around Bio DAOs like HairDAO. I’ll continue to pay close attention to those BioDAOs that show that they can deliver on bringing new therapeutics to market, while also keeping an eye on other, less developed, areas of DeSci such as new tooling and publishing platforms.
Agents
There are many different ways crypto and AI can intersect. One of those ways is decentralised agents, which are agents built on blockchains. These types of agents can easily setup crypto wallets, an agent’s native bank account, as well as programmatically interact with other applications built on blockchains.
While it’s still very early for agents, we’re starting to catch a glimpse of their capabilities on X and Farcaster. Users can already interact with a variety of agents on their social feeds, and I expect to see more emerge over the next year.
As I've written about before, the reality is that none of them are fully agents yet. They are LLMs. However, I expect to see infrastructure continue to develop that enables these LLMs to transition into agents and new consumer experiences that are unlocked as a result of that.
Consumer
There’s enough readily available infrastructure to support consumer applications that can scale to millions of users. Wallet and gas abstractions allow consumers to use products without realising that there’s crypto under the hood.
The breakout consumer app in 2024 was undoubtedly Polymarket. We’re starting to see others follow. One of our portfolio companies, Courtyard, finished the year with $100m+ annualised GMV through creating a novel card collecting experience that is enjoyed by crypto users and traditional card collectors alike.
Crypto excels at financialising almost any asset. The consumer applications with the most break out potential in my opinion are those that make previously inaccessible or hard-to-access assets available to consumers, while creating a fun and engaging experience around that.
Farcaster
A decentralised social network that isn’t controlled by a single company or person is important in my view. But users only care insofar that a decentralised social network offers a fun and unique experience.
Farcaster offers just that. The native coupling of a social ID with a crypto wallet supports experiences that are just not possible on other social networks. On Farcaster users can mint NFTs, send money to other users by tagging them, complete bounties, trade tokens, and have agents execute transactions for them, all within the social feed.
Farcaster wins the more developers leverage its native properties to create experiences just not possible on places like X.
So here they are, my 5 areas of interest heading into 2025. We have already made investments in all of these categories and I'll be spending time looking for more. However, the reality of early stage investing remains that often times the most interesting investment opportunities pop out of nowhere. And I look forward to those as well.