Web3 and Cryptocurrency Predictions in 2022. How much this volatile market will change this year?
Many people believe that Web3 and Cryptocurrencies, in general, will grow by leaps and bounds in 2022. Here are some predictions for ourtumultuous crypto market, according to Surojit Chatterjee, Chief Product Officer of Coinbase.
ETH scalability will improve, but newer L1 chains will see substantial growth
As we welcome the next hundred million users to crypto and Web3, scalability challenges for ETH are likely to grow. He is optimistic about improvements in ETH scalability with the emergence of ETH2 and many L2 rollups. Traction of Solana, Avalanche and other L1 chains shows that we’ll live in a multi-chain world in the future. We’re also going to see newer L1 chains emerge that focus on specific use cases such as gaming or social media.
There will be significant usability improvements in L1-L2 bridges
As more L1 networks gain traction and L2s become more significant, our industry will desperately seek improvements in the speed and usability of cross-L1 and L1-L2 bridges. We’re likely to see interesting developments in the usability of bridges in the coming year.
Zero-knowledge proof technology will get increased traction
2021 saw protocols like ZkSync and Starknet beginning to get traction. As L1 chains get clogged with increased usage, ZK-rollup technology will attract investor and user attention. We’ll see new privacy-centric use cases emerge, including privacy-safe applications and gaming models that have privacy built into the core. This may also bring more regulatory attention to crypto, as KYC/AML could be a real challenge in privacy-centric networks.
Regulated Defi and emergence of on-chain KYC attestation
Many Defi protocols will embrace regulation and will create separate KYC user pools. Decentralized identity and on-chain KYC attestation services will play key roles in connecting users’ real identity with Defi wallet endpoints. We’ll see more acceptance of ENS type addresses, and new systems from cross-chain name resolution will emerge.
Institutions will play a much bigger role in Defi participation
Institutions are increasingly interested in participating in Defi. For starters, institutions are attracted to higher than average interest-based returns compared to traditional financial products. Also, cost reduction in providing financial services using Defi opens up interesting opportunities for institutions. However, they are still hesitant to participate in Defi. Institutions want to confirm that they only transact with known counterparties that have completed a KYC process. The growth of regulated Defi and on-chain KYC attestation will help institutions gain confidence in Defi.
Defi insurance will emergeÂ
As Defi proliferates, it also becomes the target of security hacks. According to London-based firm Elliptic, the total value lost by Defi exploits in 2021 totalled over $10B. To protect users from hacks, viable insurance protocols guaranteeing users’ funds against security breaches will emerge in 2022.
NFT Based Communities will give material competition to Web 2.0 social networks
NFTs will continue to expand in how they are perceived. We’ll see creator tokens or fan tokens take more of a first-class seat. NFTs will become the evolution of users’ digital identity and passport to the metaverse. Users will come together in small and diverse communities based on the types of NFTs they own. User-created metaverses will be the future of social networks and will start threatening the advertising-driven centralized versions of social networks of today.
Brands will start actively participating in the metaverse and NFTs
Many brands realize that NFTs are great vehicles for brand marketing and establishing brand loyalty. Coca-Cola, Campbell’s, Dolce & Gabbana and Charmin released NFT collectibles in 2021. Adidas recently launched a new metaverse project with Bored Ape Yacht Club. We’re likely to see more interesting brand marketing initiatives using NFTs. NFTs and the metaverse will become the new Instagram for brands. And just like on Instagram, many brands may start as NFT natives. We’ll also see many more celebrities jumping on the bandwagon and using NFTs to enhance their brand.
Web2 companies will wake up and will try to get into Web3
We’re already seeing this with Facebook trying to recast itself as a Web3 company. We’re likely to see other big Web2 companies dipping their toes into Web3 and metaverse in 2022. However, many of them are likely to create centralized and closed network versions of the metaverse.
Time for DAO 2.0
We’ll see DAOs become more mature and mainstream. More people will join DAOs, prompting a change in the definition of employment — never receiving a formal offer letter, accepting tokens instead of or along with fixed salaries, and working in multiple DAO projects simultaneously. DAOs will also confront new challenges in terms of figuring out how to do M&A, run payroll and benefits, and coordinate activities in larger and larger organizations. We’ll see many tools emerge to help DAOs execute with efficiency. Many DAOs will also figure out how to interact with traditional Web2 companies. We’re likely to see regulators taking more interest in DAOs and making an attempt to educate themselves on how DAOs work.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
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Web3 and Cryptocurrency Predictions in 2022. How much this volatile market will change this year?
Many people believe that Web3 and Cryptocurrencies, in general, will grow by leaps and bounds in 2022. Here are some predictions for ourtumultuous crypto market, according to Surojit Chatterjee, Chief Product Officer of Coinbase.
ETH scalability will improve, but newer L1 chains will see substantial growth
As we welcome the next hundred million users to crypto and Web3, scalability challenges for ETH are likely to grow. He is optimistic about improvements in ETH scalability with the emergence of ETH2 and many L2 rollups. Traction of Solana, Avalanche and other L1 chains shows that we’ll live in a multi-chain world in the future. We’re also going to see newer L1 chains emerge that focus on specific use cases such as gaming or social media.
There will be significant usability improvements in L1-L2 bridges
As more L1 networks gain traction and L2s become more significant, our industry will desperately seek improvements in the speed and usability of cross-L1 and L1-L2 bridges. We’re likely to see interesting developments in the usability of bridges in the coming year.
Zero-knowledge proof technology will get increased traction
2021 saw protocols like ZkSync and Starknet beginning to get traction. As L1 chains get clogged with increased usage, ZK-rollup technology will attract investor and user attention. We’ll see new privacy-centric use cases emerge, including privacy-safe applications and gaming models that have privacy built into the core. This may also bring more regulatory attention to crypto, as KYC/AML could be a real challenge in privacy-centric networks.
Regulated Defi and emergence of on-chain KYC attestation
Many Defi protocols will embrace regulation and will create separate KYC user pools. Decentralized identity and on-chain KYC attestation services will play key roles in connecting users’ real identity with Defi wallet endpoints. We’ll see more acceptance of ENS type addresses, and new systems from cross-chain name resolution will emerge.
Institutions will play a much bigger role in Defi participation
Institutions are increasingly interested in participating in Defi. For starters, institutions are attracted to higher than average interest-based returns compared to traditional financial products. Also, cost reduction in providing financial services using Defi opens up interesting opportunities for institutions. However, they are still hesitant to participate in Defi. Institutions want to confirm that they only transact with known counterparties that have completed a KYC process. The growth of regulated Defi and on-chain KYC attestation will help institutions gain confidence in Defi.
Defi insurance will emergeÂ
As Defi proliferates, it also becomes the target of security hacks. According to London-based firm Elliptic, the total value lost by Defi exploits in 2021 totalled over $10B. To protect users from hacks, viable insurance protocols guaranteeing users’ funds against security breaches will emerge in 2022.
NFT Based Communities will give material competition to Web 2.0 social networks
NFTs will continue to expand in how they are perceived. We’ll see creator tokens or fan tokens take more of a first-class seat. NFTs will become the evolution of users’ digital identity and passport to the metaverse. Users will come together in small and diverse communities based on the types of NFTs they own. User-created metaverses will be the future of social networks and will start threatening the advertising-driven centralized versions of social networks of today.
Brands will start actively participating in the metaverse and NFTs
Many brands realize that NFTs are great vehicles for brand marketing and establishing brand loyalty. Coca-Cola, Campbell’s, Dolce & Gabbana and Charmin released NFT collectibles in 2021. Adidas recently launched a new metaverse project with Bored Ape Yacht Club. We’re likely to see more interesting brand marketing initiatives using NFTs. NFTs and the metaverse will become the new Instagram for brands. And just like on Instagram, many brands may start as NFT natives. We’ll also see many more celebrities jumping on the bandwagon and using NFTs to enhance their brand.
Web2 companies will wake up and will try to get into Web3
We’re already seeing this with Facebook trying to recast itself as a Web3 company. We’re likely to see other big Web2 companies dipping their toes into Web3 and metaverse in 2022. However, many of them are likely to create centralized and closed network versions of the metaverse.
Time for DAO 2.0
We’ll see DAOs become more mature and mainstream. More people will join DAOs, prompting a change in the definition of employment — never receiving a formal offer letter, accepting tokens instead of or along with fixed salaries, and working in multiple DAO projects simultaneously. DAOs will also confront new challenges in terms of figuring out how to do M&A, run payroll and benefits, and coordinate activities in larger and larger organizations. We’ll see many tools emerge to help DAOs execute with efficiency. Many DAOs will also figure out how to interact with traditional Web2 companies. We’re likely to see regulators taking more interest in DAOs and making an attempt to educate themselves on how DAOs work.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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