Q1 2025 Crypto Assets Market Observations: Real Returns Take Center Stage

The Hong Kong Consensus Conference in February 2025 failed to reach a consensus, and the Crypto Assets market in the first quarter of 2025 also lacks a clear dominant trend.

Looking back at 2024, a public chain surpassed the entire Ethereum ecosystem in single-chain transaction volume by executing a strict meme coin strategy, becoming the first Layer 1 public chain to win in the competition for block space. However, this victory is not solid. The fundamentals of meme coins, composed of attention, FOMO (fear of missing out) emotions, and liquidity, were unable to sustain high market capitalization and liquidity pool ratios after on-chain transaction volume sharply declined due to holiday effects, leading to a massive withdrawal market in February 2025.

The old market leaders have fallen, and the new leaders have yet to emerge. Standing at the historically volatile beginning of March, we can attempt to predict the future market trend.

Currently, a trend has emerged in the chaotic market structure: funds are shifting from purely narrative-driven on-chain zero-sum games to yield farming supported by fundamentals. Representative projects can be divided into three categories:

1. Neo-classical yield farming, enhanced version Ve(3,3) mechanism;
2. (3,3,3) new model, chain-level Olympus DAO (3,3) mechanism;
3. Decentralized Physical Infrastructure Network (DePIN) projects, with real income and positive externality variants of yield farming.

The first two types of projects have attracted significant market attention, while the DePIN sector has seen little discussion after a year of silence. However, a certain research institution's outlook report for 2025 shows that the most promising sector is indeed DePIN, and it suggests that a certain public chain should shift its strategic focus to DePIN in 2025.

As we all know, the key to obtaining excess returns lies in choosing less crowded tracks. The more overlooked DePIN is, the more it is worth diving into.

According to the data organization, among the top five revenue rankings of DePIN projects, in addition to several familiar projects, there are also two new entrants. Among them, a certain decentralized GPU computing power project ranks first with a 30-day revenue of 30 million dollars. This project has achieved an annual recurring revenue of 1.05 billion dollars, provided 487 million hours of computing power, and distributed over 3.6 billion token rewards, with nearly 1 million on-chain transactions.

The reason this project is so successful is, on one hand, due to its differentiated competitive strategy, utilizing high-performance GPUs to build a decentralized cloud computing platform that provides enterprise-level GPU computing power for global AI and game developers; on the other hand, the team seized the opportunity of the intersection of AI and Crypto Assets in the first quarter of 2024 to successfully raise funds and purchase a large number of high-end GPUs, establishing a moat and rapidly achieving network effects.

Recently, there is a viewpoint in the market that open-source low-cost models will reduce the demand for high-end graphics cards, but this viewpoint is actually noise created by market manipulators. An executive from a certain GPU giant has publicly refuted this viewpoint, and the "Jevons Paradox" is also at play. In short, open-source models will not only not decrease the demand for high-end GPUs but will instead stimulate demand growth.

In addition, innovation in the field of AI is thriving, and Embodied AI has become a new hotspot for capital pursuit. The demand for low-latency, high-reliability computing power and a multi-layer network structure that collaborates edge devices with the cloud may become the engine that ignites the second growth curve of this project.

Overall, DePIN has evolved from the "epic scam" of 2023 into a collaborative network of physical devices that possesses real income and positive externalities, yet the market has not fully reflected this. This precisely provides a good entry opportunity for investors.