Q1 2025 Crypto Market: Seeking New Directions for Real Returns

The Hong Kong Consensus Conference in February 2025 failed to reach a consensus, and there was no clear main theme in the crypto market in the first quarter of 2025.

In 2024, a certain L1 public chain surpassed the transaction volume of the Ethereum ecosystem by executing specific strategies, becoming the first L1 to win in the competition for block space. However, this victory is not solidly based. Due to holiday factors leading to a sharp decline in on-chain transaction volume, coupled with insufficiently sized liquidity pools that cannot support high valuations, a large-scale withdrawal occurred in February 2025.

The old market leaders have declined, and new leaders have yet to emerge. Standing in March, a historically volatile month, we might as well make some guesses about the future main lines of the market.

A new trend has emerged in the current chaotic market structure: funds are shifting from purely narrative-driven on-chain zero-sum games to yield farming supported by fundamentals.

Representative projects are mainly divided into three categories:

1. The neoclassical yield farming of a certain project is an enhanced version of the Ve(3,3) mechanism;
2. The new model of certain projects (3,3,3) is to apply the (3,3) mechanism of a certain DAO at the chain level;
3. DePIN projects represented by a certain project have a variant income farming with real income and positive externalities.

The first two types of projects have received considerable attention in the market, while the DePIN track has seen little discussion after a year of silence.

However, the most promising track in a certain research institution's 2025 outlook report is DePIN, and it is recommended that a certain L1 public chain shift its strategic focus back to DePIN in 2025.

As we all know, the key to obtaining excess returns lies in choosing niche but promising areas. The less attention DePIN receives, the more it is worth our in-depth layout.

According to data compiled by a certain platform, among the top DePIN projects, the income rankings show that in addition to the three familiar projects, there are also two new contenders.

Among them, the top-ranked project achieved a 30-day revenue of 10 million USD. Upon checking its GPU dashboard, it was found that the project has realized an annual recurring revenue of (ARR) 1.05 billion USD, provided 487 million hours of computing power, and distributed over 3.6 billion token rewards, with nearly 1 million on-chain transactions.

I originally thought that the real income model would take years to gain recognition in the crypto market, but seeing the growth trajectory of this project, perhaps this day will come sooner than we imagined.

There are two reasons for the success of this project: first, it adopted a differentiated competition strategy by using high-performance GPUs to build a decentralized cloud computing platform, providing enterprise-level GPU computing power for AI and game developers worldwide; second, it seized the opportunity of the AI x Crypto boom in Q1 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 GPUs. However, this viewpoint is actually market noise and does not warrant excessive concern. A senior executive from a well-known GPU manufacturer has publicly refuted this viewpoint, and the "Jevons Paradox" is also at play. In short, open-source models will not only not reduce the demand for high-end GPUs but will instead stimulate demand growth.

In addition, innovation in the AI field is thriving. Besides large language models, embodied intelligence has become a hotspot sought after by capital. Embodied intelligence requires low latency, high reliability computing power, and a multi-layered network structure, which may become the engine that ignites the second growth curve of this project.

Therefore, the demand side does not need to worry. The project team's current focus is on the supply side, dedicated to attracting more enterprise-level high-end GPU computing power suppliers to join the network. To this end, a special network has also been launched to provide compliance support and eliminate the staking threshold for GPU computing power suppliers.

Overall, DePIN has evolved from a "big scam" in 2023 into a collaborative network of physical devices with real income and positive externalities, but the market has yet to fully reflect this. This precisely represents a potential investment opportunity.