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Permissionless 2024 - 5 Key Insights into the Current State of the Crypto Markets

Yuri Alter Szaniecki
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TL;DR

 

  • Permissionless 2024 in Salt Lake City reflected a cautious yet optimistic crypto market, contrasting the bull-run hype of the 2022 Palm Beach edition. Attendance and sponsorships were lower, but the quality of discussions stood out. Major themes included blockchain interoperability, smart contract infrastructure debates, and the potential for gaming as a "killer app" to drive mass adoption.

  • Regulatory uncertainty in the US remains a key issue, with upcoming elections likely shaping crypto’s future. Industry leaders emphasized the need for stablecoin legislation and clearer rules to boost institutional adoption.

  • Spot bitcoin ETFs saw $21 billion in inflows, mainly from retail investors, though the broader crypto market hasn’t seen significant price changes due to the use of on-chain hardware wallets. Bitcoin ETFs have become a safer entry point for traditional investors.

  • The debate between modular and monolithic blockchain architectures continues, with modularity gaining traction for its scalability and specialization benefits

  • Solana’s infrastructure was praised for enabling NFTs and collectibles at scale, and Web3 gaming projects like Illuvium show promise for mass adoption, though the ecosystem must improve user experience and deliver impactful applications.

 

Last week, the Hashdex Research team attended Permissionless, one of the largest crypto conferences in the US, held in Salt Lake City, Utah. The event provided valuable insights into ecosystem developments and the crypto landscape.

In this article, we highlight the main topics discussed at Permissionless 2024, which offered a comprehensive view of the current crypto landscape. Key discussions revolved around overarching trends in the market, macroeconomic and regulatory challenges, the evolving role of bitcoin and its impact through spot ETFs, debates on smart contract platforms and blockchain infrastructure, and the potential of consumer applications, particularly in gaming, to drive the next wave of user adoption.

 

Overarching trends

 

The scale difference between the 2022 Palm Beach and the 2024 Salt Lake City edition was notable. While Palm Beach reflected the euphoria of a bull run, Salt Lake City felt like the cautious start of a new upswing. This more reserved sentiment led to a smaller turnout, particularly from traditional financial institutions that had attended in greater numbers in 2022. Additionally, there were fewer sponsors, mainly smaller projects seeking visibility.

However, the 2024 edition stood out for the quality of discussions. Panels featured deep debates with prominent speakers like Kyle Samani (managing partner at Multicoin Capital - a prominent venture capital investor in the space), Stani Kulechov (Co-founder and CEO of Aave - one of the most relevant DeFi protocols), and Chris Dixon (partner at a16z crypto - one of the largest crypto investment funds of the world). Unlike the overly optimistic "we're all gonna make it"1 narrative of Palm Beach, conversations in Salt Lake City addressed industry challenges and offered practical solutions. The optimism of crypto builders remained strong, which is a positive sign for the future of the space.

The three main themes at the conference, aside from discussions on the US elections, were advances in blockchain interoperability (improving user experience), trade-offs between vertical and modular architectures for smart contract platforms, and the potential of gaming as a "killer app" to drive mass adoption.

 

Macro, Politics & Regulation

 

The US political landscape has grown increasingly hostile toward crypto, which has significantly affected the industry. Chris Dixon pointed out that regulatory actions have targeted established companies like Coinbase and Uniswap, while smaller, riskier entities like FTX have faced less scrutiny. Kristin Smith (Blockchain Association) and Republican Congressman Tom Emmer stressed that crypto should not be a partisan issue, as innovation benefits society regardless of politics. 

Both emphasized that the upcoming US elections will be crucial for providing regulatory clarity, impacting token regulation and broader industry adoption. Samara Cohen (Chief Investment Officer of ETF and Index Investments) echoed these concerns, noting that banks remain hesitant to invest in crypto due to regulatory uncertainties. Stablecoin legislation is expected to be a priority in 2024, with over $600 billion in monthly stablecoin transactions modernizing the US dollar’s reach. 

On the macroeconomic front, Dan Tapiero (CIO at 1RoundTable Partners/Zenrock Labs), Jan van Eck (CEO of Van Eck), and Dan Morehead (CEO of Pantera Capital) shared their insights on how interest rates and global policies affect crypto adoption. Tapiero predicted US rates would drop to 3%, while Van Eck remained skeptical of significant cuts, pointing to the influence of mobile tech driving crypto growth. Morehead criticized the Fed's intervention in the mortgage market but remained bullish on crypto, especially with the recent influx of $20 billion into bitcoin ETFs.

 

Bitcoin

 

Although bitcoin wasn’t the primary focus of the event, discussions around the launch of spot ETFs in the US dominated. James Seyffart (Bloomberg ETF Analyst) and Jim Bianco (CEO of Bianco Research) provided key insights. Seyffart highlighted the success of bitcoin ETFs, which saw $21 billion in net inflows within 10 months, while ethereum ETFs faced outflows. Financial advisors were major investors, signaling growing TradFi interest in bitcoin. 

Bianco noted that much of the capital in bitcoin ETFs came from on-chain hardware wallets, explaining why these inflows haven’t significantly impacted broader crypto prices. He also discussed the role of the basis trade2 in stabilizing bitcoin prices and pointed out the challenges of yield opportunities in ether and fees in bitcoin ETFs. Cohen (BlackRock) added that 80% of investments in US bitcoin ETFs come from retail investors, showing strong individual interest. According to panelists, institutional investors are still waiting on the sidelines, waiting for a clearer regulatory environment and favorable market conditions. 

 

Smart Contract Platforms/Infrastructure architecture

 

A major topic at Permissionless 2024 was blockchain infrastructure, particularly the debate between modular and monolithic structures. Anil Kumar (Rome Protocol) and David Hoffman (Bankless) explored how modular architectures allow for more specialized and scalable solutions. Projects like Celestia were highlighted as leaders in data availability, while Solana was described as pursuing a high-frequency trading hub vision.

Kyle Samani (Multicoin Capital) and others emphasized that the shift toward modularity fosters competition and benefits users by enabling a more diverse range of blockchain solutions. The growing focus on modularity and app-specific chains signals an important shift in how blockchains will evolve to meet user demands.

In wake of recent news regarding Uniswap launching their own chain, Rushi also noted that successful apps should consider transitioning to modular structures as their user base grows, leveraging app-specific chains (appchains) to better scale. This approach allows for tailored optimization, as specialized chains can address the needs of their specific applications, making it a natural path for scaling in the blockchain ecosystem. Ultimately, the discussions emphasized that while modularity brings complexity, it also opens up possibilities for innovation and user-centric solutions in the blockchain space.

 

Applications

 

In the Solana ecosystem, discussions revolved around the need for impactful dApps. Panelists critiqued the focus on reducing gas fees, arguing that it fragments liquidity. Vibhu Norby (Driphouse) highlighted the importance of Solana’s compression technology in making collectibles and NFTs viable at scale.

On the gaming front, Illuvium, a promising NFT-based game, continues to attract users with tournament rewards and scholarship models. Its partnership with Futureverse, aimed at creating an open, interoperable universe, was also highlighted. Other projects like Polemos, which offers NFT-lending capabilities, show potential for bringing millions of new users to Web3 gaming.

The conversations reveal a mix of optimism and pragmatism about building consumer applications on public/permissionless blockchains. While infrastructure and community support provide a strong base, the ecosystem must continue to refine user experience and deliver compelling applications that resonate with the broader market.

 

Conclusion

 

In conclusion, Permissionless 2024 was an insightful event marked by high-level discussions that reflected the evolving landscape of the crypto industry. Despite lower attendance compared to previous years, the quality of conversations underscored a strong sense of optimism among industry builders. Topics such as blockchain interoperability, smart contract architectures, and the potential of gaming to drive adoption highlighted a collective understanding that innovation persists, regardless of the political and regulatory challenges facing the sector. The Hashdex Research team left the conference feeling more confident about the state of the industry, encouraged by the insights shared and the resilience demonstrated by participants. Overall, the event served as a testament to the crypto community's commitment to navigating obstacles and advancing the ecosystem.

 

 1. "WAGMI" is a slang term that stands for "We're all gonna make it." It's commonly used on social media platforms to build optimism and confidence in the crypto markets, especially in response to positive news. 

 2. Basis trading is an arbitrage strategy where a trader buys and sells a financial instrument, like a derivative or a commodity, to profit from differences in pricing. It aims to take advantage of mispricing between related securities and is also known as a cash-and-carry trade.

 

 

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