「MIRAISE PREVIEW 2024」Full Version


Table of Contents

  1. ERC-4337

  2. AI Agent

  3. Marketing Without Third-Party Cookies

  4. The evolution of CMS never stops

  5. ESG comes to coding - Green Coding

1. ERC-4337

Ethereum's new ERC-4337 triggers mass adoption of web3

ERC-4337 (Account Abstraction via Entry Point Contract specification) is an innovative & newly proposed standard for Ethereum,and adopted by the Ethereum community as an EIP with the aim of addressing a key challenge faced by web3: its complexity and difficulty for users to understand. As a result, the user experience of web3 is expected to be dramatically improved.

Even Metamask, the most popular web3 wallet, has only 30 million MAUs worldwide (as of March 2022). Facebook has 3.03 billion MAUs, FYI. Without more web3 users (users with web3 wallets), nobody can invest significant amounts of money in blockchain games, Dapps, etc, because the number of web3 wallets means their addressable market size.

There are three main issues*1 with web3 wallets today:

  1. EOA*2 approval is required for all transactions.

  2. Users do not intuitively recognize the important role of the "private key" in a web3 wallet.

  3. If the "private key" is lost, access to the EOA is lost, and users cannot recover crypto assets.

Well, how will ERC-4337 improve? The most significant improvement will be thatweb3 wallets will become programmable. Consequently, it will address the following issues for web3 wallets. You will be able to:

1. Recover a lost private key based on an email or phone number.

2. Create wallets that multiple people can manage.

3. Pay for gas fees in fiat.

ERC-4337 was proposed to the Ethereum community two years ago. Many developers, following the Ethereum trend, viewed this proposal as a business opportunity and actively engaged in product development. ERC-4337 was implemented in Ethereum in March 2023. Now that it is available on the mainnet, we can expect numerous products utilizing ERC-4337 in 2024.

Actually investments in startups who deal with smart contract wallets*3 using ERC-4337 are active worldwide. Soul Wallet raised $3 million in seed funding in March 2023, and Argent raised $40 million in Series B funding in April 2023. The Ethereum Foundation has also announced funding for 18 projects utilizing ERC-4337.

According to Gartner's Hype Cycle, Blockchain Wallets have been beyond the disillusionment period as of 2022. With ERC-4337 now available on the mainnet, more developers are expected to develop blockchain apps in anticipation of a growing user base with web3 wallets. The number of blockchain app developers is expected to increase as ERC-4337 becomes available on the mainnet, attracting more users.

(Source: Metaverse, Web3 and Crypto: Separating Blockchain Hype from Reality Hype Cycle Diagram for Blockchain and Web 3 Sectors)

Many people might perceive the web3 market as stagnant due to the collapse of FTX and the significant impact of AI. On the other hand, we believe that implementing the new Ethereum standard will trigger mass adoption of web3. It's important to distinguish between crypto assets and web3, utilizing decentralized technologies, to resolve issues that were not possible before

We will continue to focus on technological progress of web3 and related startups, and actively invest in them.

*1 Numerous articles on ”Blockchain/Web3 Wallet Technology Trends and “Technology Is Blocking Mass Adoption of Web3” describe the challenges faced by web3 wallets.

*2 An EOA (Externally-Owned Account) is an account managed with a private key, such as Metamask. In contrast, there is a CA (Contract Account) that is compared to EOA. A CA is a smart contract deployed on networks like DApps and controlled by code.

*3 A smart contract wallet is a web3 wallet in which a program is written.

2. AI Agent

AI as manager rather than assistant

What kind of image do you have of AI? With the introduction of ChatGPT, many people may envision AI as an excellent assistant capable of tasks like translation, writing, and research, etc. In 2024, we will witness an evolution that drastically changes the current image of AI.

In 2023, AI topics were widely covered in various media. OpenAI announced GPT-4 in March 2023 and GPT-4 Turbo in November 2023, showing the rapid evolution of the GPT series. OpenAI's competitor, Anthropic, raised $450 million in February from companies like Google, followed by another $300 million in March, bringing its valuation to $410 billion.

According to a Crunchbase survey, 26% of the investment in US startups from January to August 2023 was in AI companies..

The advent of Generative AI has enabled humans to efficiently utilize AI as an assistant in tasks such as translation, writing, summarization, programming, and image generation. As predicted at MIRAISE PREVIEW 2023 that we forecasted “businesses dealing with the Large AI model becoming unicorns,” investments flowed into AI-related startups, creating significant excitement around AI.

However, the current challenge with AI is too much dependency on the knowledge and experience of the user. Those who are not familiar with utilizing AI may find it challenging to retrieve the information they need and might not be able to use AI's capabilities effectively.

The “AI Agent” doesn’t rely on or wait for human instruction but it instructs itself. What humans need to do is tell their issues to AI, rather than detailed instructions. Then, AI will take care of the rest , exploring, implementing,evaluating, and modifying the methods for solving the tasks. Therefore, AI Agent does not depend on human skills in utilizing AI, allowing more people to benefit from the advantages of AI.

AutoGPT” project that is recognized as the birth of the AI Agent, was released as open source in April 2023 and garnered over 140,000 stars on GitHub within just three months, and engineers discussed it.. As another example, GitHub introduced the AI Agent "Copilot Workspace" at its annual developer event, GitHub Universe 2023. “Copilot Workspace” does more than just complementing code. It allows humans to simply write issues (short sentences describing bugs or feature development), and the AI thinks about specifications, designs an implementation according to the specifications, and modifies or creates code.

(Source: GitHub - Significant-Gravitas/AutoGPT AutoGPT's star count chart on GitHub)

AI Agent is not only applied in software development but also has use-cases in the field of accounting. Black Ore Technologies developed "Tax Autopilot," an AI Agent for accountants and raised $60 million funding in November 2023.

AI Agent leverages text-generating AI and is actively being developed in various fields, including software and accountingI. And we believe it will be applied wider in the future as Generative AI for images and video develops further.

3. Marketing Without Third-Party Cookies

Exploring new targeting methods.

In the field of web advertising, Google is set to phase out Google Chrome's third-party cookies in 2024. The impact is significant, and we should be keen on a new generation of targeting methods that do not rely on cookies moving forward.

In the Western countries, cookies are considered as personal information and have become the subject of regulation from a privacy protection perspective. In response to this, in March 2020, Safari, Apple's standard browser, completely eliminated third-party cookies. In the result, the targeting accuracy of web ads were lowered, leading to a decrease in ads revenues for web companies. Meta experienced its first YoY decline in ads revenue in 2022 and saw an end to decade-long trend of growth in ads sales.

Globally, Safari holds approximately 20% of the browser market share, while Chrome dominates with around 60%. Google, the developer of Chrome browser, announced their plan to discontinue third-party cookies in Chrome in late 2024. Consequently, this movement makes it more critical than ever to improve the accuracy of web ads through methods not relying on third-party cookies.

Currently, startups both domestically and internationally are emerging to address the challenge of improving the accuracy of web ads using new methods. For example, Sushi Top Marketing has developed "Token Graph Marketer," a service that analyzes NFTs owned by consumers and distributes NFTs to targeted consumers without violating any privacy issues. Revenue Roll developed an advertising analysis tool utilizing Identity Graph* and completed a seed funding in 2023.

(Source: Diagram explaining Token Graph Marketing proposed by Sushi Top Marketing)

In the post-cookie era, we anticipate an increase in startups targeting users with unconventional approaches, such as NFT utilization, as described above. Rather than being dominated by tech giants like current platformers, we are watching with interest to see if a more user centric and ideal scenario will be realized through the use of decentralized technology and improvement in privacy literacy.

* Identity Graph is a database that provides information about visitors, including demographics that provide information about visitors, including demographics, browsing history, purchase history, and other data collected from a variety of sources. This allows e-commerce businesses to conduct more effective advertising campaigns.

4. The evolution of CMS never stops

10 years since the birth of Headless CMS, what’s the next evolution in CMS?

Over the past 10 years since the introduction of the "Headless CMS," the demand for content delivery on corporate websites has changed. Now, we can catch sight of a new evolution in CMS.

A CMS (Contents Management System) is a system that manages, creates, and updates website content. It allows anyone, even those who are not engineers, to manage website content relatively easily without the need to write HTML/CSS.

CMS emerged around 1995 and has continuously evolved. In 2003, with the emergence of blogs and web media, “Wordpress” became explosively popular and is still used on 42.6% of websites on the Internet*1 today.

In the 2010s, "Headless CMS" came out. "Headless CMS" manages data in the backend and provides API2 to display which gives flexibility to the frontend. Alongside a new system configuration approach called JAMStack3, “Headless CMS" is now widely adapted in many product developments.

(Source: $30M to Power the Next Generation of Content Management | Hygraph Diagram explaining the Federated Contents Platform proposed by Hygraph)

10 years after the advent of the "Headless CMS", CMS was required to evolve again. Rather than relying on a single data which a single Headless CMS manages as backend as the data source, content is now managed across multiple services, each accessed through its own APIs. In other words, the data has become decentralized.

In response to this evolving need, CRM has been further developed. Hygraph, which raised $30 million in March 2023, defines its developed CMS as a "Federated Content Platform”. It connects with multiple services via APIs to centrally manage content. Payload developed an open-source CMS that is developer-friendly and raised $4.7 million from Google's AI-focused Gradient Ventures and MongoDB. AgilityCMS defines its developed CMS as a "Composable CMS," allowing easy assembly of CMS like building blocks for easy integration or content removal. It is characterized by being suitable for MACH architecture*4 in particular.

We believe that CMS is entering the next phase to address the needs of companies' content delivery.

*1 Usage Statistics and Market Share of WordPress, December 2023

*2 API (Application Programming Interface) refers to an interface, CMS is entering the next phase of evolution.

*3 JAMStack is one of the front-end web development methods. It allows construction of fast and secure websites with rapid page loading.

*4 MACH architecture is a modern system architecture utilizing microservices, API-first approach, cloud-native design, headless system, providing scalable and adaptable configuration with flexibility and resistance.

5. ESG comes to coding - Green Coding

Low energy consumption is required for software development.

In recent years, governments, investors, and financial institutions worldwide have declared their commitment to achieving net zero emissions by 2050. In response, many domestic and international companies have begun initiatives related to ESG, disclosing numerical targets and levels of achievement. In software development, there is also a growing focus on “Green Coding” practices, such as choosing programming languages with low energy consumption. And creating programs that run locally is getting preferred, rather than the cloud based approach in terms of lower energy consumption in data transfer.

You may think the environmental issues is not related to software engineers, but according to a report*1 from the ACM (Association for Computing Machinery), the impact of the ICT sector on the climate is on the same level as the aviation industry. Energy consumption in data centers, AI development, and blockchain mining is significantly high, and there is a possibility that the ICT sector could account for one-third of global CO2 emissions by 2025.

Major tech companies have already initiated efforts to reduce their CO2 emissions. Companies like Google, Apple, and Microsoft have announced that they plan to be carbon-free/negative by 2030, while Amazon aims for this by 2040.

"Green Coding" is directly related to ESG considerations for software engineers, particularly in areas outside of high-power consumption like data centers.

“Green Coding” refers to energy efficient software development practices that chooses programming languages with low energy consumption and developing programs that run locally without requirement of data transfer with minimal power consumption compared to the cloud. According to a research paper*2 from a university in Portugal, it has been found that there is an about 20 times difference in energy consumption among programming languages.

Projects related to green coding are springing up worldwide. For example, the French project “GreenFrame” develops software to calculate and monitor the CO2 emissions from software, supporting the decarbonization of software. The non-profit organization “GREEN WEB FOUNDATION” from the Netherlands works towards achieving an internet without the use of fossil fuels by 2030. They engage in activities such as developing the CO2.js JavaScript library to measure CO2 and publishing the world's largest dataset of websites powered with green energy practices.

(Source: GreenFrame - Measure the Carbon Footprint of your Website

GreenFrame provides a dashboard image illustrating the power consumption of websites)

As of the end of 2023, we couldn’t find any startups in this area that have raised major funding. However, with the growing awareness of environmental issues, we predict the emergence of startups related to green cording.

*1 Association for Computing Machinery, COMPUTING AND CLIMATE CHANGE, November 2021

*2 Energy Efficiency Across Programming Languages

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