🚀 Welcome to Web3 Decoded! 🚀 - Vol. 39

Embark on an exhilarating exploration of the decentralized frontier with Web3 Decoded, your go-to source for staying informed and inspired in the crypto realm. Every week I will uncover the latest breakthroughs, trends, and innovations shaping the landscape of Web3. Together let's explore the untapped potential of Web3, beyond the buzzwords.

⚛️ Major News and Developments ⚛️

Solana's monthly DEX volume surpasses $100 billion for the first time

Solana's DEX trading volume exceeded $100B for the first time in November, reaching $109.8B, nearly double Ethereum's $55B for the month.

ETHGlobal hackathon's 10 finalists showcase AI agents, crypto games, DAO tools, and more

EthGlobal's Bangkok hackathon had 713 projects competing for over $750,000 in prizes, with judges including Ethereum co-founder Vitalik Buterin and other industry leaders. The winning projects reflected key trends in the crypto space, focusing on gaming, DAO tools, AI agents, and infrastructure solutions. Highlights include the game launchpad Metaloot; Industry.ai, which visualizes AI agents completing tasks in a video game environment; and ETHPark-QR, which settles Thai parking tickets in crypto.

Lido Co-Founders Said to Plot Competitor to Sam Altman's World Network

The co-founders of Lido are developing “Y,” a blockchain-based digital identity platform that will compete with Sam Altman's World Network by using social and blockchain activity for authentication instead of controversial biometric scans. Y hopes to address privacy and fraud concerns, positioning itself as a more secure and decentralized alternative while leveraging its creators' influence in the crypto space to challenge World's established user base and connections to OpenAI.

Avalanche Blockchain's Largest-Ever Upgrade Goes Live on Testnet

Avalanche has launched Avalanche9000, its largest upgrade, making it easier to build apps and custom blockchains ("subnets") on the platform. Avalanche900 was launched on the testnet to reduce transaction and validator costs. Its key features include cheaper permissionless validators and lower fees. Avalanche has launched a $40 million grants program to incentivize developers to experiment and create.

💻 Crypto and AI 💻

Exploring the Future of AI Agents in Crypto

This report explores how autonomous AI agents are emerging as influential players in crypto, spotlighting innovative projects like Terminal of Truths and $GOAT and platforms like Virtuals Protocol and Daos.fun. While challenges remain, such as AI accuracy and blockchain integration, the rapid development hints at AI agents' transformative potential in the crypto economy.

Web4: We Are AGI

The rise of Web4, a fusion of decentralized systems, artificial intelligence, and autonomous agency, is transforming the internet from a reactive tool to an intelligent, proactive participant in daily life. This new era, powered by blockchain and AI, is possible due to the rapid evolution of agents capable of decision-making, creativity, and economic impact. It heralds a future where machines play pivotal roles in governance, finance, and creativity.

🦄 Ethereum Ecosystem 🦄

AI-powered Ethereum: from rules-based to AI-powered smart contracts

Eternal AI has introduced a framework for AI-powered Ethereum smart contracts that replaces traditional rule-based programming with dynamic LLM-driven decision-making through an AI Kernel architecture. The system operates across four layers (User, Kernel, Model, and Hardware spaces) using a novel Proof-of-Compute consensus mechanism. Eternal allows for autonomous agents, intelligent wallets, and AI-powered oracles. Developers can now integrate open-source AI models like Llama and FLUX directly into smart contracts for adaptive learning and real-time decision-making capabilities for apps.

Ethereum now and then: A 10-year look back

This article reflects on the development of Ethereum and the broader blockchain ecosystem over the past decade.

• Proliferation of Blockchains: Despite expectations of consolidation (as seen in social networks and stock markets), blockchain networks and cryptocurrencies have multiplied, with over 2.5 million cryptocurrencies by 2024. While many may be inactive, more than 50 have billion-dollar market caps.
• Resilience of Projects: Unlike traditional markets, blockchain projects tend to persist, even if no longer actively developed. Some projects, like Dogecoin, have seen comebacks after quiet periods.
• "Markets for Everything" Theory: Initially, there was speculation about blockchain enabling "uncensorable" markets, such as assassination markets or micro-insurance markets. While some markets like election prediction have grown, many concepts have not yet gained traction.
• Institutional Adoption: Institutions have been slow to adopt blockchain for business processes, instead focusing on new asset classes like NFTs. Startups like Tether have had more success bringing traditional assets on-chain than legacy institutions.

The author finds the trajectory of blockchain surprising, with some disappointments but also unexpected successes, drawing a parallel to Jeff Bezos’s early reflections on the slow initial growth of the web.

💰 Decentralized Finance 💰

Tether announces asset tokenization platform Hadron

Tether has launched Hadron, a platform to simplify asset tokenization. This will allow users to tokenize a wide range of assets, from stocks and bonds to loyalty points, with robust compliance, security, and control features. The platform is designed for institutions, governments, and private companies. Hadron plans to improve transparency, accessibility, and regulatory compliance in digital finance, using Tether's technology to make tokenization scalable and user-friendly.

On Solver Economics: How Value Flows in DeFi

ERC-7683 standardizes intent-based transactions, leading to a commoditization of solver services and a redistribution of value to the ecosystem. As solver fees have declined from 15 to 4 basis points over the past year, value is increasingly flowing to order originators like UniswapX and settlement networks like Across, which provide critical infrastructure including flexible repayment systems and intent backstopping. The standard is expected to capture 20-30% of L2 DEX volume and 25-40% of the bridging market.

💡 Enlightenment and Insights 💡

Exploring Base's Role in the Growing Onchain Economy

The onchain economy has experienced explosive growth in 2024, with weekly transactions up 60% 531 million and TVL increasing 110% to $88 billion. Base has stood out as the leading onchain ecosystem with daily transactions up 1,900% to 7.7M and stablecoin volume growing over 8,800% to $55B weekly. Base's rapid adoption has been caused by sub-cent transaction fees and a diverse set of applications, positioning the network as a key infrastructure layer for the expanding onchain economy.

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