Wait and see 2022: Pantera Capital partners predict six hot spots next year
Author: Paul Veradittakit, Partner, Pantera Capital
Original compilation: Kxp, 0x137, Rhythm BlockBeats
This article is based on an article published by Pantera Capital partner Paul Veradittakitl on his personal website, which is compiled and translated by BlockBeats as follows:
overview
overview
2021 is an extraordinary year for Crypto: DeFi grows into a market capA $100+ Billion Industry; The price of Bitcoin reached$69,000 peak；ArbitrumSuch an L2 ecosystem andSolanaMassive growth of such alternative L1 public chains; NFT sales exceed$22 billion; and more mainstream and institutional attention than ever before.
Here are my six main predictions for how the crypto space will develop in 2022:
L2 and Rollup: Rollup scalable platforms built on Ethereum, such as Arbitrum and StarkEx, will continue to receive attention as medium- to long-term solutions to Ethereum network congestion.
Non-Ethereum/Bitcoin chains: Alternative dApp ecosystems in L1 smart contract public chains, such as Solana and Binance Smart Chain, will continue to grow as cross-chain bridges increase the need for cross-chain liquidity while developer platforms are easier Launch your own dApps on other chains.
Composability and Web 3.0: Projects will find new and powerful ways to integrate with each other to create a unified user experience across the online ecosystem. Digital ownership and data management mechanisms will also be expanded, allowing users to develop stronger and more useful digital identities.
Expansion of NFTs: As the digital art ecosystem grows, the popularity of NFTs will continue to soar. Beyond pure images, NFTs will power multiple use cases across verticals, including gaming, music, and creator/influencer communities.
DAOs: As people increasingly embrace the concept of digital, collective action, more DAOs will be launched around some unique and compelling use cases. As DAOs become more organizationally and functionally complex, we will see significant developments in the tools for managing and operating DAOs.
DeFi security protocols: After several large-scale DeFi attacks in 2021, the security of DeFi protocols will receive more attention than ever in 2022. Projects that emphasize runtime security and smart contract attack insurance will help protect dApps on various public chains, while enhancing mainstream users' confidence in DeFi as a robust financial ecosystem.
2021 "Encryption Fever"
2021 could be the most exciting and turbulent year for the crypto market. We've seen incredible growth and innovation, including Ethereum's highly anticipated London hard fork, the Solana ecosystem's explosive summer expansion, and Bitcoin's all-time high of $69,000 in November. At the same time, we have also seen some inefficiencies and vulnerabilities in the encryption field explode, from Ethereum's absurd gas fees toPolyNetwork$600 million attack on smart contracts.
It is indisputable that Crypto has captured the public eye like never before. Every day thousands of users register addresses on various blockchains, search NFT collections on OpenSea, invest more in DeFi and Web 3.0. As 2022 begins, I'm looking forward to seeing this mainstream trend guide the direction and speed of innovation in the crypto space-extending the boundaries of the crypto world, and helping crypto technology realize its true decentralized, user-first financial system. vision.
Wait and see 2022:
Here are six areas where I expect significant innovation and growth in 2022:
L2 and Rollup
The biggest criticism of Ethereum at present is its ridiculously high latency and Gas fees, which obviously inhibit the computing power of dApps and keep newcomers who do not have sufficient funds out of the door.L2The solution is to solve this problem by executing transactions off-chain (reducing slow, expensive on-chain computations), and then publishing batches of transaction data on-chain.
L2 has become very popular in the last year.Arbitrumwas launched in SeptemberOptimistic RollupThe solution has now reached$2.78 billionof the peak TVL, and accumulated the50+ dApps, including 1inch, Balancer and Coinbase wallets, etc. andZK RollupTVL increased from $43.5 million to $1.9 billion and has been used inScale the transaction throughput of dApps such as dYdX。
As Crypto’s mainstream adoption continues to grow, Ethereum’s network congestion will only get worse and exacerbate its latency and fee issues. Rollup is critical to maintaining Ethereum's growth by ensuring a highly scalable computing infrastructure, allowing ordinary users to have similar or better usability experiences and expectations than Web2.0 applications when interacting with dApps. Both OR and ZKR will gain more attention in the coming year. OR may dominate in the short term, but ZKR, which is more complex in technology, will achieve greater development as a long-term scalability solution.
Non-Ethereum/Bitcoin public chain
At the beginning of the year, 97% of the total TVL of DeFi belonged to Ethereum. Today, Ethereum only has63% of the TVL. The L1 public chain competing with Ethereum has shown explosive growth in the past year, mainly due to its considerable scalability advantages and different application scenarios from Ethereum. Solana has had a particularly stellar 2021, creatingtransaction throughputtransaction throughput, reached in November this yearandandPrice peak near $260andSocialFiandGameFiProviding a large amount of start-up capital also shows that the ecosystem will continue to grow significantly in the coming year.
In addition to specific public chains, many technological developments this year indicate that 2022 is destined to be an important year for the "multi-chain universe". such asRainbow Bridge by NEARCross-chain bridges such as the Ethereum blockchain will help accelerate the development of non-Ethereum ecosystems by expanding cross-chain liquidity and enhancing the composability of cross-chain assets. On the other hand, some EVM platforms such as NEAR onAurora, and also make it easier than ever for Ethereum-based dApps to launch on other chains, further enhancing cross-chain participation in DeFi. Overall, these advances in cross-chain infrastructure will accelerate the development of alternative L1 public chain network effects and promote the development of a truly powerful and diverse multi-chain encryption ecosystem.
Composability and Web 3.0
"Web3.0" can be said to be one of the keywords of the year in 2021. It covers a wide range of fields, so it is difficult for us to determine what it specifically includes. But generally, we use it to refer to technologies that prioritize ownership of user data or assets, and interoperability between different applications.
2021 is a big year for digital ownership, in which the industry size of NFT reaches$7 billion, and as more and more artists and art buyers begin to explore verifiable ownership in the digital field in the future, the entire NFT industry will achieve further growth. In addition to NFT, digital ownership will also be realized through decentralized crowdfunding (WillWilldecentralizedFinishdecentralized)andDecentralized Identity Projectdevelopment and growth. In these projects, users can fully and precisely control their personal data and reputation, so as to realize DeFi unsecured loans, KYC, etc. Next year, more projects will emerge one after another to further expand the scope of ownership on the chain, allowing users to manage their digital identities and assets more comprehensively and functionally.
In terms of interoperability, the cross-chain bridge will greatly enhance the composability in DeFi, so that users can not only conduct cross-chain asset transactions, but also use DeFi protocols on different blockchains. In addition to DeFi, likelogin.xyzThis providesEthereum login serviceThe project also showed us that the blockchain can further enhance the composability between applications, so that users can access all services with only one login method. Overall, there will be tighter integration between applications and services, and there will be more projects that can improve the fragmented nature of the network.
Development of the NFT industry
andNBA Top ShotandBored Ape Yacht ClubSuch a project has allowed NFT to enter the field of pop culture again, and it has also become this year'sone.one.
Looking ahead, we need to note that the market value of physical artworks is still as high as$1.7 trillion, which means that the development of the NFT market has just started. However, with the increasing popularity of digital artworks, coupled with the gradual tokenization of physical art, and the improvement of verifiability and market liquidity, the NFT market will continue to flourish in 2022.
andDecentralandandAxie InfinityandAudiusandRoyalProjects such as , are establishing mechanisms that allow fans to directly support the work of their favorite artists and receive a portion of the artist's royalties. I believe that in 2022, NFT will extend to more fields, reshape the way we interact with digital media, and let us have a deeper thinking about digital media ownership.
DAO
andFWBandpleasrDAOandBitDAOandConstitutionDAO), and there are even DAOs that focus on social causes (such as the DAO dedicated to improving climate changeKlimaDAO). Given their outstanding achievements in their respective fields, I predict that in the future, DAOs will become mainstream tools for online organization and collective action, allowing people all over the world to actively participate in the causes they care about.
While the number of DAOs continues to grow, people are also constantly optimizing DAO tools, operations, and introductory tutorials. for example,SyndicateSimplifies the process of creating a DAO, making it easier for people to collaborate and invest;StationIt provides users with a DAO getting started guide, allowing people to spend less time than before to build and run a functional DAO. Since the operations of DAOs are becoming increasingly complex, I expect that in 2022 we will see more projects dedicated to building DAO tools and infrastructure.
DeFi Security Protocol
Compared with the past, people have more doubts about the safety of DeFi in 2021. In total, more than $610 million in funds have been stolen this year due to DeFi vulnerabilities (an increase of 8 times from $77 million in 2020), and another $704 million in funds was stolen, but all were later returned by white hat hackers , like that timeThe $600 million PolyNetworkSame as theft. These unexpected events have always been inevitable, but they have brought disaster to DeFi. However, these incidents also just show that DeFi has several major loopholes in the underlying technology, which may eventually limit the development of DeFi to more fields.
In order to make everyone willing to continue using DeFi, we need to develop more protocols and tools to ensure the safety of users when using encrypted financial products. Some projects, such as dApp monitoring security during operationForta, as well as providing smart contract vulnerability insurance for dApp usersNexus MutualAnd so on, have made significant progress in protecting the security of the encrypted financial ecosystem. Despite this, there are still many vulnerabilities in DeFi's smart contracts, and most of them are not yet known to us. I hope that in 2022, various DeFi projects will put security first, and hope to see more related projects in the fields of smart contract audit, precise operation monitoring and consumer protection.
final thoughts
All in all, in 2021, the Crypto field will not only achieve large-scale growth, but also an astonishing number of new products will emerge, including blockchain infrastructure, DeFi, NFT, and more. Although the traditional network is still highly exploitative, monopolistic and fragmented, this does not prevent encryption from becoming one of the most powerful technologies of our time. It protects privacy, builds trust, perfects composability and decentralization. Has an unparalleled status.
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