Original Post:
Medium December 31, 2024

Last year, to close out 2023, I wrote my first ever recap of the year in crypto.

I enjoyed writing it so much that I went a little hot out of the gate, declaring in Q1 that I’d write quarterly recaps this year…

…which I ended up publishing exactly one of.

Note to self: Maybe next time don’t unnecessarily hold yourself to superfluous and strictly-cadenced writing projects when you’re six months pregnant. Maybe.

Anyway, I remain committed to doing this annual recap nonetheless—for the last four years, I’ve written a personal Christmas letter for friends & family which serves as a fantastic thought exercise in zooming out and summarizing me & my family’s year, and this is, IMO, the professional parallel—which is why I’m here on December 31st forcing myself to tie a bow on this thing.

Before beginning, I’ll repeat the motivation and disclaimers in writing this that I declared in my inaugural recap last year, which remain the same:

I expect we’ll look back on these years like the dawn-of-the-internet years, and I think future me will thoroughly enjoy looking back on these early 2020s in cryptoland. […]

I should note, of course, that this is ‘the year in crypto’ through my lens, and is not an attempt to talk about objective highlights or things that I think most people will necessarily care about. This is a glimpse into where Annika’s head was at — what got me thinking, what got me excited, and how, in my view, we progressed as an industry this year. Given my focus and areas of interest, this will be fairly Ethereum-centric.

Let’s go.

General Vibes

As I reflect on what 2024 felt like working in crypto, my mind draws a U-shaped picture, one that loosely mirrors the shape of the snake in this image:

As I wrote in my Q1 2024 recap, the start of the year felt like we were in a little bit of mania again — kind of like the early days of the 2021–22 bull run. The SEC had finally approved spot Bitcoin ETFs, memecoins were taking off, and my 1:1 chats with others in the space were full of “is this it? are we back?” type dialogue.

We were not, in fact, back — at least not in terms of a meaningful and sustained hockey stick change in price action, which is probably the most-used barometer for how the space is faring.

On November 4th, the eve of the United States presidential election, Ether was priced arond $2,400, the same range it was trading in during mid-February. Bitcoin on that day was around $69K, which lines up with where it had been in mid-March.

By and large, aside from a surge in Q1, the two foremost crypto currencies—charted below, year-to-date—were relatively flat for the better part of 2024 (with Ether far more volatile than Bitcoin, as expected), at least until the US election.

I would argue that vibes were — at least by mainstream standards—similarly flat.

Since November, though, it’s been up up up — with Bitcoin breaking the long-awaited $100K ceiling for the first time in mid-December, and Ether gaining a bit more modestly, but nonetheless inching closer towards its 2021 bull run highs.

To summarize: in 2024, we started with vibes, they went away, and then came back again in full force to close out the year.

It feels like we’re heading into a big 2025 , in a similar way that it felt like we were heading into a big 2024 at the end of last year — but we certainly do have much more ticked off the list from a development perspective sitting one year out from where we were at the end of 2023, plus we are certainly in a much more promising regulatory environment (in the US, at least, from a crypto standpoint), and we didn’t have an FTX- or Terra-like crisis setting us back this year.

Thank. Goodness.

Major Developments

Last year, I wrote about three themes in my section on developments:

1. The rise of Layer 2 scaling solutions
2. The dawn of Account Abstraction
3. The acceleration of stablecoin innovation

…and two of those three themes — Layer 2s and Stablecoins — are of utmost relevance to discuss in summarizing this year, too.

On the odd one out, Account Abstraction, since I’m glossing it over — it launched early last year, it works and is kind of table stakes now in the Ethereum ecosystem. There are lots of wallets using it under the hood, and I’d call it kind of a done deal (which, by the way, is fantastic), at least in its current instantiation in the Ethereum protocol — so I don’t have a lot more to say on it this year.

Ok, let’s get into the big ones.

Development #1: An explosion of Ethereum Layer 2s

As I described last year, with the advent of Layer 2 blockchains in the past couple years, Ethereum has finally addressed its scaling challenge, for real.

And to regurgitate my previous Layer 2 definition:

For the unfamiliar: Layer 2s are blockchains that inherit the important properties of their base chain (which, in the cases I’m describing, is Ethereum) — and allow for faster, cheaper transactions than on the main network. In essence, they “extend” the main network and make it more useable. Overview here.

Arbitrum, Base, Optimism, you name it… Ethereum Layer 2s are here, and they are performant.

Having been in the space for a few years now, it is so satisfying to finally and categorically be able to tell people: “sending money across borders is actually cheaper if you use crypto”.

We’ve arrived.

Last year, I said that:

The long-tail of OP Stack chains is certainly still nascent (see TVL figures in the above link), but the blueprints and enabling infrastructure — projects like Conduit, Zeeve, etc. — are getting there.

This year, both the leading projects and the long-tail of Ethereum Layer 2s grew.

And grew and grew and grew.

As of this writing, there are 15 Ethereum Layer 2s with TVL > $100M according to L2Beat.

It’s fantastic that we’ve arrived from a scaling perspective, and it’s fun to watch the proliferation of L2s play out.

As an aside, last year I spoke highly of the launch of Base, Coinbase’s Layer 2—which, in the above rankings now sits at #2, with its TVL exploding from about $400M to $3.6B (~9x) this year—and on which I could probably write an entire piece in and of itself.

But in arriving, we’ve incurred an implicit cost: as a user, there are so. many. networks. to. manage.

Naturally, a lot of people (and projects) want in on the Layer 2 action; in 2024, we saw many existing projects launch Layer 2s of their own.

This has implications as a user, though—imagine holding checking account balances across, say, Bank of America, Chase, Wells, a bunch of smaller community banks, and each of those balances only being usable for a subset of things you want to do: pay rent from BoA, credit card bills come off your Chase. Oh, you want to shop at this particular small boutique in rural Pennsylvania? Well, you need to fund a new account at Mifflinburg Bank and Trust to buy anything there (and, yep, that’s a real bank).

That’s what it often feels like navigating using Ethereum right now.

Crypto: The Game, one of my very favourite projects this year as a Survivor fan (still can’t get over how cool this challenge was), natively built one of the first in-app displays I’d seen addressing the Ethereum fragmentation challenge—they displayed your ETH balances across networks within their app prior to you having to pay in ETH to “mint to play”.

This is cool.

It gives you a one-shot look at what money you have and where—a great improvement vs. the typical wallet status quo back then that forced you to click each individual network in a drop-down to see its unique balance.

But, taking things a step further:

Wouldn’t it be even more awesome if, as a user, you could just click the “mint to play” and the system actually takes the 0.1 ETH from whatever chains, as cheaply as possible, without you needing to manually move around the money yourself?

Or better yet: if you didn’t have ETH in a wallet but had stablecoins, it could take those stablecoins from whatever network(s), convert them into ETH, and move them onto the required network—all done automatically behind the scenes and in the cheapest and fastest way for you, the end user?

That’s where we need to go.

In short: with L2s, we’ve created an Ethereum monster — but at least it’s a really fast, highly performant monster.

In my opinion, until we solve the UX challenges that the proliferation of Layer 2s bring to Ethereum, we won’t make it to the masses.

Much work to do in 2025. 🫡

Development #2: Stablecoins (ft. a billion-dollar acquisition)

In last year’s piece, I featured a little-known startup called Bridge, which I highlighted as one of a few interesting stablecoin projects I had come across.

One of the biggest headlines of 2024 year in the stablecoin space ended up being acquisition of that startup, a 2.5-year-old sub-50-person company, by Stripe — arguably the most respected payments company in the world — to the tune of $1.1 billion.

That caught people’s eye, even beyond just the crypto community — and undoubtedly served as an indicator that stablecoins are here to stay.

There was lots of movement in the stablecoin space beyond just Bridge, though.

First: transaction volume.

We were, aside from a handful of sporadic spikes, fairly flat from mid-2021 through early 2024. Which, as I said last year, is actually kind of impressive in and of itself, given we were in a bear market for a good chunk of that time.

This year, it seems we’ve hit an inflection point.

In particular, volumes have really, really taken off in the back half of Q4: we’ve seen days this month where transaction volume exceeded $80B (!), even after only consistently hitting half that starting in October.

What’s causing this?

I haven’t seen any analysis that breaks down the Q4 rise in particular—but as succinctly explained in this Bitrue piece, an increase in volume often signals more people entering the market to buy other assets, since stables serve as a bridge between fiat and cryptocurrencies.

Beyond transaction volumes, I have also found myself sharing the below chart — a comparison of US treasury holdings by entity type—quite a bit.

Closing out 2024, stablecoins (specifically, USDC & USDT) sit at about $90B, which makes them a pretty meaningful holder of Treasuries even on a global scale—they hold more in Treasuries than both Germany and Mexico.

Let that sink in.

If that doesn’t get normie economists at least curious, I don’t know what does.

And then anecdotally, in spite of their scale starting to get to respectable numbers from a global finance lens, stablecoin usage itself remained somewhat niche—at least from a mainstream North American perspective.

That’s because the use cases for stablecoins continue to be mostly ex-US, which makes perfect sense: Americans have plenty of other ways to save and send US dollars, whereas people in other countries don’t necessarily have such readily available USD access (or such stable currencies that maintain — at least relatively speaking—their purchasing power).

The conversation has increased this year around stablecoins as ‘Defense Tech’ — the idea being that, even though they aren’t a government-issued CBDC, stablecoins can actually help advance US national interests in proliferating USD-centricity across borders.

Earlier this year, a report titled Stablecoins: The Emerging Market Story was published which surveyed about 2,500 people from emerging markets—Nigeria, Indonesia, Turkey, Brazil, and India—about their stablecoin usage.

It’s worth a read—it offers some great analysis, as well as anecdotal evidence and direct quotes, from end users in different markets on how they’re using stablecoins in 2024.

But I’d say the summary on where things stand closing out 2024 is:

• People are using stablecoins universally—in North America and beyond—to access crypto (e.g., to buy memecoins, say)
• People are using stablecoins in non-US markets to save & send in dollars
• Traditional financial institutions are starting to get curious about stablecoins—not even taking them seriously quite yet, for the most part, but they’ve at least heard of them and are interested in exploring

Beyond the big themes

I’ve touched on the two themes of 2024 that are, in my opinion, of utmost lasting power and that are in my areas of passion & focus—but there’s a lot more that happened in crypto this year that I would be remiss not to mention.

Specifically, a few quick ones that come to mind include:

• Farcaster coming into the limelight, mostly within the Ethereum ecosystem (but it did taper off in the back half of the year)
• Memecoins—on Solana, in particular—bringing more people into the space (albeit from largely a speculation lens, reinforcing many people’s existing stereotype of crypto)
• AI x Crypto got a lot of buzz. An area with a ton of potential, but still incredibly early. Of note this year: Truth Terminal, ai16z.

And, of course, I need to call out the aforementioned Crypto: The Game which was undoubtedly the most fun I had in the space this year—and which, in another prominent news story of 2024, was acquired by Uniswap Labs in the summer.

As for me…

So what am I focusing my time on, amidst this environment?

I’m working on Eco, which happens to be building right at the intersection of the two main themes I discussed: Layer 2 fragmentation and stablecoins.

We’re making stablecoin transactions as easy as possible for the end user, by making it incredibly simple for developers to build the best possible experiences—and access the liquidity they need.

Learn more here, and hmu anytime if you want to chat.

In closing out the year, it is deeply energizing, personally, to be working on something that is so central to the challenges and opportunities we’re facing today in the crypto space—if we have anything to say in 2025, we’ll have moved the needle on both areas above, which are crucial for the advancement of the industry at-large.

That’s as motivating as anything.

Oh, and — I would be remiss not to mention that, earlier this month, I kicked off Stablecoins 101, an online cohort-based course about stablecoins, how they work, and their potential. I’m in the process of planning my Q1 2025 cohorts — if you’re interested in joining, shoot me a DM on Twitter (@AnnikaSays).

https://cdn.embedly.com/widgets/media.html?type=text%2Fhtml&key=a19fcc184b9711e1b4764040d3dc5c07&schema=twitter&url=https%3A//x.com/AnnikaSays/status/1857500262640074921&image=

To (finally) close this thing out, as I say every year: I can’t imagine not working in crypto in this day and age.

Here’s to a productive 2025. 🥂