Tuesday, December 6, 2022

10 Predictions For Web3 And The Crypto Economy For 2022

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According to Coinbase, this year could be when Web3 matures and becomes a vital industry tenet. The American exchange also predicted that Layer 1 chains such as Solana and Avalanche would become more prevalent in 2022. This also includes the bridges that allow Layer 1s and Layer 2s to communicate. Some of the crypto terms might be new to some, but they will be familiar by the end of the year.

1- Eth scalability will strengthen

However, growth in newer L1 chains will be significant. As the next hundred million people join crypto and Web3, Eth’s scaling issues may worsen. With the advent of Eth2 and other L2 rollups, I am enthusiastic about improvements in Eth scalability. The traction of Solana, Avalanche and other L1 chains indicates that we will soon live in a multi-chain world. Newer L1 chains will come up, focusing on specific use cases such as gaming or social networking.

2- L1-L2 bridge usability will improve significantly

This is as more L1 networks gain traction and L2s grow in size. Our industry will be frantic to improve the speed and usability of cross-L1 and L1-L2 bridges. In the coming year, we’re going to witness some exciting advancements in bridge usability.

3- Zero-knowledge proof technology will gain acceptance

 Protocols like as ZkSync and Starknet began to gain traction in 2021. As L1 chains get clogged due to increased usage, ZK-rollup technology will pique investor and user interest. New privacy-centric use cases will arise, such as privacy-safe applications and game models that include privacy as a primary feature. This may also draw the attention of regulators to crypto, as KYC/AML may pose a significant difficulty in privacy-centric networks.

4- Regulated Defi and on-chain KYC attestation

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 Many Defi protocols adopt regulation and distinct KYC user pools. Users’ real identities will be linked to Defi wallet endpoints using decentralized identification and on-chain KYC verification services. More ENS type addresses will be accepted, and new cross-chain name resolution mechanisms will develop.

5- Institutions will play a more significant role in Defi participation

 Institutions are becoming more interested in Defi involvement. For starters, as compared to typical financial products, institutions are drawn to higher-than-average interest-based returns. In addition, employing Defi to reduce the cost of delivering financial services brings up exciting prospects for institutions. They are, however, nonetheless unwilling to take part in Defi. Institutions want to make sure they only deal with counterparties with experience with the KYC procedure. Institutions will gain confidence in Defi as regulated Defi, and on-chain KYC attestation grow.

6- Defi insurance will emerge

As Defi gets more widespread, it becomes a target for security breaches. According to Elliptic, a London-based organization, the overall value lost by Defi exploits in 2021 was above $10 billion. In 2022, credible insurance mechanisms ensuring customers’ cash against security breaches will develop to safeguard consumers from hacks.

7- Web 2.0 social networks will face stiff competition from NFT-based communities

NFTs will continue to grow in popularity. Creator tokens and fan tokens will receive higher priority. NFTs will be the next step in evolving a user’s digital identity and metaverse passport. Users will form local, diversified communities based on the types of NFTs. User-created metaverses will be the future of social networks, posing a threat to today’s centralized advertising-driven social networks.

8- Brands will become more active in the metaverse and NFTs

Many brands find that NFTs are excellent vehicles for brand marketing and loyalty. NFT collectibles were released in 2021 by big brands such as Coca-Cola. Adidas and the Bored Ape Yacht Club just announced a new metaverse project. NFTs are likely to be used in more innovative brand marketing campaigns in the future. For brands, NFTs and the metaverse will be the new Instagram. Many brands, similar to Instagram, may begin as NFT natives. We’ll also see a slew of celebrities hop on board and use NFTs to boost their brands.

9- Web2 firms will wake up and want to break into Web3

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 Facebook is already attempting to rebrand itself as a Web3 company. In 2022, we’re likely to see more big Web2 corporations dabbling in Web3 and metaverse. On the other hand, many of them are likely to develop centralized and closed network metaverses.

10- It’s time for DAO 2.0

DAOs will mature and become more mainstream. As more people join DAOs, the definition of employment will shift to include never receiving a formal offer letter, accepting tokens instead of or in addition to a fixed salary, and working on many DAO projects simultaneously. DAOs will also face additional obstacles in making mergers and acquisitions, managing wages and benefits, and coordinating activities in larger and larger organizations. We’ll see a slew of technologies emerge to aid DAOs in their execution. Many DAOs will also learn how to work with traditional Web2 businesses. Regulators are likely to become increasingly interested in DAOs and strive to educate themselves on how they work.

Some of these terms and predictions may seem foreign, but if you follow closely, you will see their benefits.

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Kat Adiver
Kat Adiverhttps://www.blogprocess.com
is a Mom. Graduated from Telfer School of Management, Finance/Accounting with interest to Entrepreneurship and New Media.
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