Compilation of the original text: Deep Tide TechFlow
Compilation of the original text: Deep Tide TechFlow
2022 has been a journey for the crypto industry. In this report, we compile the top ten cryptocurrency events and trends for 2022, followed by our outlook for 2023.
2022 Year in Review
In 2022, the global economy struggles amid macro and geopolitical headwinds, including monetary tightening by central banks around the world to combat inflation, conflict in Europe, supply chain disruptions and the lingering impact of the COVID-19 pandemic. therefore,Global GDP growth is projected to be 3.2% in 2022, down sharply from ~6% in 2021. At the same time, the inflation rate continued to soar, reaching an annual average of 8.8%.
In addition to macro headwinds, the cryptocurrency market has also been negatively impacted by a number of events, notablyThe collapse of the Terra stablecoin (UST) in May and the bankruptcy of FTX in November.These two events and subsequent effects producedchain reaction, affecting other players in the ecosystem and dampening their confidence in the industry.At the time of this writing, it can be said that this is still"cryptocurrency winter". That being said, it is natural for market cycles to fluctuate between bear and bull markets, as the chart below shows.
Ethereum's merger on September 15, 2022 is widely regarded as one of the most anticipated cryptocurrency events of the year.One of the positive effects of the merger is that Ethereum’s energy consumption has dropped by 99.95%, since PoS does not require energy-intensive mining machines like PoW. In contrast, PoS blockchains rely on validators to validate transactions. It is estimated that the energy consumption of the PoS Ethereum blockchain is about 1% of that of PayPal, which is several orders of magnitude smaller than that of the PoW network.
After FTX goes bankrupt in late 2022, we see decentralized exchanges (DEXs) taking a higher share of total cryptocurrency spot trading volume.As of November 2022, DEXs accounted for 14% of spot trading volume, compared to 9% in October.
In 2022, new Layer 1 (L1) blockchains are in the spotlight:Notable examples are Aptos and Sui, both created by former developers on Meta's Diem team. Therefore, Sui and Aptos use similar technologies, including parallel engines and the Move programming language.
PoS pledge needs to lock tokens by default,this meansToken holders must choose between earning yield or preserving liquidity.Liquid Staking tries to solve the problem by allowing token holders to enjoy the best of both worlds - maintaining a certain level of liquidity while enjoying the benefits of PoS tokens.The flexibility liquid staking offers stakers is some of the reasons it will thrive in 2022.ETH is the most popular token choice based on the market capitalization of liquidity staking tokens. Lido Finance continues to lead the liquid staking market with approximately 78% market share.
In the first half of 2022, the NFT market is full of vitality and trading volume is strong.OpenSea’s daily trading volume hit a high of $544 million in May 2022, launched by Yuga Labs, the company behind the blue-chip Bored Ape Yacht Club (BAYC) NFT"Otherdeed for Otherside "promoted by the series. Despite weak transaction volumes in recent months, NFT collaborations and innovations continue.
Despite the market downturn, there will still be around 1 million blockchain gamers playing every day for most of 2022.The Wax blockchain is currently leading the way in terms of the number of daily gamers,315,000 as of this writing. Wax has some top blockchain games such as Splinterlands and Farmers World.
Blockchain-based social applications gain traction in 2022,This can be seen in the dramatic increase in the total number of unique wallets interacting with the smart contracts of social DApps.
Capital investment and project incubation in the blockchain space continue to grow.About $29 billion has been raised in the first half of 2022 alone, with infrastructure and Web3 startups, including NFTs, blockchain games, and metaverses, accounting for the vast majority of the pool. The total amount of capital raised in the first six months has surpassed the figures for 2021, which saw 1,313 rounds and $30.2 billion invested in all of 2021. In terms of industry,The distribution of investments in the blockchain services category was consistent throughout the year.It received the most funding with a total of 592 rounds, followed by the DeFi and GameFi sectors.
Security concerns are a focal point of any blockchain network.In 2022, we see a lot of hacks and vulnerabilities. At the time of writing, the total value of cryptocurrency hacks in 2022 is about $3.7 billion, a 63% drop compared to 2021. Among them, the stolen amount of the cross-chain bridge accounted for more than one-third of the total amount.
Outlook for 2023
Despite challenging macro conditions, cryptocurrency adoption growth remains strong in 2022.
As of November 2022, the number of cryptocurrency owners crossed the 400 million milestone, reaching 402 million. During the year, the average monthly adoption growth rate was 2.9%.
Depending on market conditions,We predict that the number of global cryptocurrency owners may reach 600-800 million in 2023.
In the field of blockchain games, weExpect to see some AAA titles in the next year or two,These games will provide players with a new gaming experience, combining high-performance gameplay with blockchain technology.
The growing use of Soul Bound Tokens (SBTs),This could be another potential market driver. SBTs are NFTs linked to individuals or entities and are non-transferable and non-tradable. They are intended to represent the holder's social identity by incorporating their commitments, credentials, and affiliations. It is similar to the concept of a resume or CV. Adoption of SBTs can lead us to a decentralized society (DeSoc) or a co-determined sociability where souls and communities convene in a bottom-up manner. DeSoc is based on non-transferable SBTs designed to represent"soul"Commitments, credentials, and affiliations in the real economy can encode a web of trust in the real economy to establish provenance and reputation.
In 2022, we see an interesting phenomenon,More and more Web2 developers are showing great interest in Web3.Since 2018, downloads of two popular Web3 development libraries, Ethers.js and Web3.js, have surged tenfold. The flock of developers to Web3 will spur the growth of companies offering Web3 development tools.
After some bankruptcies and hacks in the industry in 2022, we seeThere is a growing focus on security and user education. The key to building a successful business model is building trust with end users.Going into 2023, we expect this trend of greater focus on security and user education to continue. On the one hand, we may see more platforms investing in security audits and certifications. On the other hand, we also expect to see more educational initiatives launched in this area, continuing the trend from 2022.
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