Jan 31, 2024

Alchemy's protocol specialist Jason Windawi joins "First Mover" to discuss Alchemy’s latest Web3 development report, which highlighted Solana gaining momentum and EVM development activity rising.

Video transcript

Web three saw a lot of highs and lows last year joining us now to discuss this alchemy protocol specialist, Jason Wini Jason, welcome to the show. Thank you. It's so good to be here, Jen. Great to have you here a lot going on in the headlines this morning, quick reaction to the news, anything standing out to you this morning. Um I, you know, I think it's super interesting that um what we call Trad I, which is, you know, one of those names, we come up with names for everything in Web three, right? But traditional finance is starting to get so involved in Web three that now they're doing analyst reports as though these are traditional companies which um you know, those reports are sometimes on sometimes not, but it's really interesting to have that perspective coming into a space that has historically been focused elsewhere. Jason, I used to host a show on coin desk called the Hash. And every time we had an analyst report, we kind of did a collective eye roll like WW tell us something. We, we didn't know, but I think your perspective is um is a good one. Trad is really starting to pay attention and starting to make sense of what's happening in this industry to a broader audience. So, regardless of that collective eye roll, I think that is probably a good thing. Agreed. Agreed. Now you co-authored uh web three report over at alchemy, talk to us about some of the trends that you're watching heading into 2024. Sure. Yeah. So it was um an interesting year in 2023. Looking back at 2023 we saw a lot of the groundwork being laid for the things we expect to happen in 2024. So there's an old truism that bear markets are for building, which we're probably all tired of hearing, but in truth, it actually happened. So that's evident in our data that developer activity continued growing, smart contract deployments, continue growing. Um wallets in particular were a growth space. And so we expect these investments in building and in creating new capabilities to start bearing fruit in 2024. In fact, they already are. But a few areas that we're looking at are really the coming to fruition of Ethereum roll up centric road map. So with the proliferation of new L twos and perhaps inspired by this, lots of new L ones like Sui that you were talking about earlier, um we expect to see a lot more of that and a lot more, you know, if last year was the year for building a lot of these. We're seeing a lot of interesting things happen now, like competition for hosting these by L Twos or competition for hosting them across L ones or new developer tool kits, new kinds of applications, really exciting new things developing like forecaster on base. Um These are all made possible by the investments and building that happened last year. So that's one of the things we're looking at player two's really uh stole the headlines last year and this year, it seems like we're talking about Real World assets a lot. I think the two kind of work hand in hand and also with the Ethereum ecosystem. What do you think? What do you think is going to drive headlines? What do you think is driving the narrative this year? Yeah. So I think you hit the nail on the head with um Real World assets. I really think about it as sort of this melding of traditional finance and web three. So you have things like the you can think about is the tokenization of securities. So Hondo offering tokenized, you know, Black Rock Treasury ETF S for example, that's uh securities in the real world that are being tokenized and brought on chain, which is incredibly exciting and a big growth area. Another area going in the opposite direction is the securitization of tokens, um which is a very sort of broad way of saying taking tokens and finding a way to represent them on chains. So that traditional finance can invest through things like ETF S. So this sort of merging is happening a lot and we're also seeing a lot of, we talked to a lot of institutions, obviously and behind the scenes, there's an enormous amount of building going on around things like what Larry Fink talked about most recently in terms of being able to put all of your securities onto a ledger for incredible efficiency and cost savings on just a general improvement in in the technology. So, yeah, I fully expect to see a lot more of that this year. What do you make of Larry Fink's uh comments about Bitcoin and the crypto space changing? I know that this change happened over some time. It was an overnight and of course, Blackrock has the spot, Bitcoin ETF now they are vying for a spot, Ether ETF later on this year. Talk to me about like how you've been watching that Trad five perspective shift and change and what part of the industry might they be interested in next? Um Yeah, so it's a a topic near and dear to my heart because I come from trad fly before. Um And so I've been watching this for a very long time and it has been fascinating to watch the, the progression from, oh, this is all Bitcoin and Bitcoin is terrible and bad for the environment too. Well, maybe we might be interested in Bitcoin, but only because our clients are interested in right now. Suddenly a broadening of that to look at Bitcoin Ethereum for ETF S for their clients. But also looking at it on the infrastructure and technology side where it may not involve the traditional chains that we're we're used to talking about and dealing with. But there are still major investments happening around, around really bringing trad five processes themselves, regardless of the securities and tokens and what gets offered to the public. But really bringing those incredibly huge and massive and kind of outdated processes on chain. Um It's likely to see some significant advances in the next year or two, I would imagine. OK, we have to talk about NFTS. Now they were all the rage for a very long time. Your report notes that trading volume fell 76% year over year while token prices rebounded, unpack that for us are NFTS dead. No, they're not dead. I I think NFTS are one of the most interesting spaces. So it's, and that's for a couple of reasons. So one traditional NFTS, yes, the NFTS we think about as being on Ethereum were, were in decline last year. I don't think anybody can, you know, would contest that. But by the same token, several other things have happened that are innovations that have, I wouldn't say taken their place but have started showing us some different possibilities. So one of them was inscriptions starting with Bitcoin ordinal and then rotating across a number of chains last year, you know, as infrastructure providers, we certainly saw the impact of that on the underlying chains trying to process the traffic surges. Um, and that is likely to continue. So Lana has become a, a, um, a growing hub for NFTS in a way that it wasn't for, for a lot of the recent history and it's, it'll be exciting to watch how that develops. Um I would also say, as I talked about earlier in terms of the melding of the traditional sort of online businesses and web three in finance. We're also seeing that on an LTs. So we're seeing a lot of deals um and partnerships being struck between major Corporates. Um A lot of whom are hosting these on the Polygon chain around creating loyalty programs and other, you know, other sorts of applications that actually use the uniqueness of an NFT to tie it to the uniqueness of something in the real world. So they are far from dead. It's interesting you bring that up. I remember when Starbucks launched their program, I was living in Canada at the time, so I couldn't participate in it. Curious if you, if you've taken a deep dive into any of these programs are folks who are not operating in the web three space actually participating or understanding what they're participating in. Yeah, that is a great question. And I, I wish I had like the survey or ethnographic data on that from the user perspective, but I don't, but I would imagine part of, you know, one of the things we haven't had a chance to talk about, maybe we will is um account abstraction, which is this new sort of approach to transactions online that enables you to transact with sort of the ease of web two. But with all the autonomy and self ownership and data ownership that you get in web three. And so, um I'd have to think to the extent that people aren't aware of it, the project sponsors might view that as a good thing because their focus is on the loyalty program or on the customer experience or whatever they're focused on as a business that's different from making sure everyone knows exactly what technology they're dealing with and that they're dealing with in NFT. And when you say account abstraction, I just want to unpack our audience. You're talking about abstracting away the complexity, maybe not even calling it an NFT, maybe calling it something that's more recognizable to an everyday person, like a collectible or a stamp or something of that nature. Yeah, absolutely. It's a, it's a very sort of category of things that as you, if you put it very well, it's, it's oriented to abstracting away the experience of working with a wallet. So those of us who've worked with traditional web three wallets are accustomed to the challenges of storing your seed phrase and trying to recover an account that you've lost and gas feeds and all sorts of things that really kind of their friction that becomes very steep. It's a very steep thing for a brand new user to overcome and come back and use web three over and over again. And so account abstraction is really a series of technologies that are designed to address all of that and it's very easy to sort of fall into too much technical stuff. So I'll avoid it there. But it, it's a fascinating space and it started um it's various chains or at various levels of it, but it's, it's something that's being very actively pursued and something we're certainly building for as well. Jason just before we wrap. Uh What do you hope if you could pinpoint one thing, one piece of data from this report? What do you hope folks take away about web three as we head into the rest of 2024? Yeah. You know, I, I working on this report made me such a booster and that's not normally my way. So forgive me if I'm a little overly enthusiastic, but I think that um it's an incredibly exciting time. We had so much groundwork being laid in 2023. You know, it was such a bear market. We had FTX, we had B flowing, we had regulatory headwinds, we had all of these problems and yet builders still showed up and all of that building happened and 2024 is gonna be a great year to start. Um Building on that foundation, we're very excited for it. Web three is here to stay and I have to mention the pudgy penguins are noted in the report and I love pudgy penguins. I don't know if I'm allowed to say that on air as like maybe I should reveal. They've also sent me pudgy penguins. So there's my disclosure, but I just love them and love everything that they're doing. I think that is definitely, you know what? And I think I'm so glad you brought them up, Jen because I think they're a great example of this sort of this hybridization of web three in the real world, right? So Pudgy Penguins did that amazing toy launch in Walmart. Pudgy Penguins is maybe I, I happen to see on Instagram. They have an Instagram collection, which is really unusual, right? For a, an NFT project. So they're, they're building something that's very exciting and it's much more than just A and the pfps along are great, but they're building something that's much more robust and interesting and community led um and Richard them all and it's, it's an exciting thing to see. Mhm Definitely a project to watch Jason. Thanks so much for joining the show today. Thanks so much, Jane. Great chatting with you. That was alchemy protocol specialist, Jason Win Dai

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