Q1 2025 Crypto Assets Market Observation: Lack of Dominant Narrative, Real Returns in Focus

The Hong Kong Consensus Conference in February 2025 failed to reach a consensus, and there was no clear dominant narrative in the Crypto Assets market in the first quarter of 2025.

Looking back at 2024, a certain public chain surpassed the Ethereum ecosystem in single-chain transaction volume by strictly implementing the meme coin strategy set by a research institution, becoming the first Layer 1 public chain to win in the competition for block space. However, this victory was built on a shaky foundation. As the holiday effect faded, leading to a sharp drop in on-chain transaction volume, combined with an underfunded liquidity pool that could not support high valuations, this public chain experienced a massive withdrawal market in February 2025.

The old market leaders have fallen, and new leaders have yet to emerge. Standing in March, a time that has historically been unpredictable, we might as well boldly predict the future market trends.

In the current chaotic market structure, a new trend is emerging: funds are shifting from purely narrative-driven on-chain zero-sum games to yield farming projects supported by actual fundamentals.

Representative projects are mainly divided into three categories:

1. The neoclassical yield farming of a certain project is an upgraded version of the Ve(3,3) mechanism;
2. Certain projects' (,3,3) new model can be seen as a chain-level version of a certain DAO's (,3) mechanism;
3. The Distributed Physical Infrastructure Network (DePIN) project represented by a certain project has a variant of yield farming with real income and positive externalities.

The first two types of projects have gained significant attention in the market, while the DePIN track has seen low market discussion after a year of silence.

However, the most promising track in the 2025 outlook report by a research institution is precisely DePIN, and it is suggested that a certain public chain should shift its strategic focus back to the DePIN field in 2025.

As we all know, the key to obtaining excess returns lies in choosing less traveled paths and cultivating barren fields. The more overlooked the DePIN track is, the more worthwhile it is for us to delve into.

According to the top DePIN project data compiled by a certain data platform, in the income ranking of the top five, in addition to a few familiar projects, there are also two new contenders.

Among them, a certain project ranks first in the DePIN project list with a 30-day revenue of 30 million USD. By checking the project's GPU dashboard, it is found that it has achieved an annual recurring revenue of 1.05 billion USD, provided 487 million hours of computing power, distributed over 3.6 billion token rewards, and conducted nearly 1 million on-chain transactions.

I originally thought it would take years for the real income model to gain recognition in the crypto market, but seeing the growth trajectory of the project, this day may come sooner than we think.

The success of this project is partly due to its differentiated competitive strategy. Unlike other DePIN projects that focus on edge device networks and cater to long-tail market demands, it has chosen to leverage high-performance GPUs to build a decentralized cloud computing platform, providing enterprise-level GPU computing power for AI and game developers worldwide. On the other hand, the project team seized the opportunity of AI and Crypto Assets in the first quarter of 2024 to successfully raise funds, purchasing a large number of high-end GPUs, establishing a moat, and driving the project to quickly achieve network effects. This network effect, in turn, attracted more enterprise-level GPU computing power suppliers to join.

Recently, there has been a prevailing view in the market that open-source low-cost models will reduce the demand for high-end graphics cards, causing some investors to worry about the sustainability of the project's revenue. However, this view is actually noise deliberately created by financial market manipulators some time ago, and feeling anxious about it is somewhat unfounded.

A senior executive from a well-known chip company has publicly refuted this view, and moreover, the "Jevons Paradox" is at play. In short, open-source models will not reduce the demand for high-end GPUs; rather, they will stimulate demand growth. After a certain open-source model became popular, the domestic Model as a Service (MaaS) inference market scale surged, saving many computing centers on the brink of bankruptcy.

In addition, innovation in the AI field is thriving. Besides large language models, embodied intelligence has also become a hotspot for capital pursuit. Embodied intelligence requires low-latency, high-reliability computing power and a multi-layer network structure for edge devices and cloud collaboration, which will serve as the engine to ignite the second growth curve of this project.

Therefore, from the demand side, we need not worry about this project. The project team's current focus is on the supply side, and they are working hard to attract more enterprise-level high-end GPU computing power suppliers to join the network. To this end, the project has also specifically launched a new network to provide compliance support and waive the staking threshold for GPU computing power suppliers.

In the DePIN field, in addition to AI-related projects, the fundamentals of a certain geographic information service project are also quite good. However, since it focuses on the niche market of geographic location information services, its growth potential is limited, and a deeper analysis will not be conducted here.

In summary, DePIN has evolved from being regarded as an "epic scam" in 2023 to a collaborative network of physical devices with real income and positive externalities, but the market has yet to fully reflect this. This precisely provides us with a great investment opportunity.