Alliance DAO Hosts Demo Day Highlighting Key Crypto Industry Trends
This is a segment from the 0xResearch newsletter.
Alliance DAO's Role in Crypto Innovation
Alliance DAO functions as a key accelerator in the crypto sector, supporting Web3 innovators with significant growth potential. Each year, it evaluates thousands of applications, utilizing its extensive dataset to track trends and provide insights into the evolving crypto landscape. This was showcased at their recent Demo Day, where various startups presented innovative ideas reflecting future crypto development.
Trends in Blockchain Preferences
According to Alliance’s recent report, Ethereum remains the dominant blockchain for decentralized applications (dapps), with around 62% of startups in the program leveraging it. However, interest in alternatives like Solana is increasing.
Optimistic rollups such as Optimism, Arbitrum, and Base are experiencing faster adoption than zk rollups. Base has gained considerable developer interest since its 2023 launch, now representing a substantial share of Layer 2 activity.
Solana has recovered significantly post-FTX collapse, accounting for 18% of recent applications. Conversely, Polygon's popularity is declining as it transitions towards zk validium technology.
Innovative Use Cases
Projects like Amihan game Farm Frens and Offramp are integrating with Telegram while operating on other networks. Farm Frens uses NFTs minted on Solana, while Offramp collaborates with Dynamic and Zerodev for EVM-based non-custodial wallets, facilitating user-friendly interactions within Telegram.
Shifting Focus in Crypto Products
The crypto space is witnessing a shift toward infrastructure, payments, and DeFi applications. Infrastructure projects are gaining traction due to their high valuations and appeal to investors. DataHive exemplifies this trend by promoting data democratization and privacy, while Starpower integrates DeFi with real-world assets for sustainable energy solutions.
Interest in DAOs and NFTs is waning as founders focus more on utility-driven applications that meet specific user demands.
Speculation and Startup Growth
Alliance partner Qiao Wang emphasizes speculation's role as a catalyst for innovation in crypto, contrasting it with traditional venture capital's risk aversion. This speculative environment allows projects to secure resources and evolve quickly.
Alliance supports protocols like Whalefare, which combines speculative gameplay with popular gaming formats, highlighting gaming's potential for crypto adoption. Demo Day participants Force Prime and Kiss or Rug also illustrate gamified experiences aimed at high-risk speculation.
Geographic Trends in Applications
The report indicates a decline in applications from the US and Canada, dropping from 45% in late 2021 to 29% in 2024, attributed to regulatory hurdles prompting founders to seek more favorable environments. Startups like RPS are tapping into Asia's gaming market, while regions like Asia and Africa see increased adoption driven by practical applications such as stablecoins.
Approximately 72% of startups in Alliance’s accelerator operate fully remotely, aligning with the global and decentralized nature of crypto. Nevertheless, Alliance prefers in-person teams when feasible to enhance cohesion and accountability.