DARMA Capital: 23 predictions for blockchain ecology in 2023

Odaily资深作者

2022-12-29 02:30

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Ethereum will remain the most widely adopted, most developed, and most capital-intensive Layer 1 blockchain through 2023.

Source: Andrew Keys, Venture Capitalist & Managing Partner, DARMA Capital

Compilation of the original text: Bitui BitpushNews Mary Liu

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1. Ethereum Momentum

Ethereum will remain the most widely adopted, most developed, and most capital-intensive Layer 1 blockchain through 2023.

Ethereum will remain the most widely adopted, most developed, and most capital-intensive Layer 1 blockchain through 2023.The merger is the biggest event in the industry since Satoshi Nakamoto's Bitcoin genesis block in 2009. In 2023 Ethereum will introduce more subtle but equally important developments, driving more adoption and capital in a flywheel effect, which will make Ethereum the frontrunner for the next bull market.

The next Ethereum upgrade after the merger is Shanghai (Shanghai), which is scheduled for the second quarter of 2023. Among the many upgrades, Shanghai will allow the withdrawal of ETH pledges, which have been locked in the deposit contract since it went live in December 2020. Unstaking could increase the amount of staked ETH as stakers who are uncomfortable with the idea of locking up their funds join.

Following the Shanghai upgrade, EIP-4844 is another innovation for Ethereum that will further position Ethereum as the most widely adopted layer 1. EIP-4844 will enable Proto-danksharding. Proto-danksharding is proposed as a step towards full sharding and will help layer 2 scale. Danksharding is a sharding design using "merged market fees", where each shard has different blocks but shares a single block proposer.

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2. Ethereum Staking

Following a smooth transition to proof-of-stake, Ethereum's utility as a platform for staking innovation will continue to expand, creating a new compounded crypto yield curve.

Following Ethereum's successful migration to Proof-of-Stake in September, ETH now has the largest staked capital base of any blockchain with more than $20 billion staked. Before Merge, we saw innovations in the staking space with projects like Lido, which supports liquid staking, and Obol, which provides distributed validator technology.

Through 2023, we will see continued innovation in ETH staking as capital seeks safer forms of yield, and future updates will support staking withdrawals. EigenLayer is a particularly innovative staking project. EigenLayer provides cryptoeconomic Security-as-a-Service for Rollups, Bridges, and Oracles. EigenLayer allows these projects to leverage Ethereum’s collateralized security to complement or complement the security provided by native tokens. In 2023, EigenLayer plans to launch its restaking protocol and the first middleware to use the restaking mechanism, called EigenDA (Data Availability).

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3. Fed Outlook

The Fed will turn dovish, setting the stage for the next crypto bull market in Q3 2023.

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4. US regulation

Washington, D.C. will become a crypto hotspot in 2023 as regulatory innovation proceeds at an unprecedented pace.

The centralized financial catastrophe of 2022 is the result of poor risk management, poor governance, imperfect audits, and potential fraud — all of which can happen in any industry. In 2023, consumer protection will be a top priority for policymakers. Most emerging policies will revolve around centralized exchanges and stablecoins. Exchanges like Coinbase could be forced to become G-SIFI regulated, which would increase their regulatory compliance costs. Washington, D.C. will be at the center of some of the most contentious and important crypto conversations in 2023.

In the midst of increased regulatory attention, it is absolutely unrealistic that the SEC will continue to declare that all tokens are unregistered securities. Just because this new database technology is capable of digitizing and tokenizing any asset doesn’t mean they are all securities. We'll see tokens for everything: electrons on microgrids, gold bars, carbon offset credits, software licenses, governance rights, concert tickets, doctor's prescriptions, memes that went viral in 2010, then fiat currencies and rewards Points - None of these should reasonably be classified as securities. This is not consumer protection, I would say, hey, SEC Chairman Gary Gensler, this is willful ignorance of new technologies.

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5. Chartered Banks

Banks chartered by the Federal Reserve will offer crypto services.

The Financial Stability Oversight Board aims to further refine regulations to protect consumers and enable greater technological innovation in an effort to build stronger and safer global platforms.

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6. More NFT practicability

As we move through the "jpeg" age together, NFT utilities will become more nuanced, personal, and commercial. Meanwhile, blue chip “jpeg” NFTs are set to become a multi-billion dollar asset class.

By 2023, the Web3 ecosystem will leapfrog the "jpeg" era that has dominated NFTs for the past two years, represented by 10,000 pfp items and zero-utility art. The term "NFT" will no longer automatically mean "digital art" as various use cases will emerge, all using NFTs as the underlying technology.

Commercial giants such as Starbucks are already exploring alternative use cases for NFTs. More business leaders are paying attention to how Starbucks will develop; if successful, we will see major brands shine and release NFT reward points. Web3-native projects like Mojito have started this evolution and are already supporting brands and creators who want to explore the more personal utility of NFTs. 2023 will also be the rise of the “phygital,” where teens who buy a physical pair of Nikes will also have a digital receipt for those sneakers to wear digitally on their virtual avatar in the metaverse.

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7. Invest in DAOs

Investing in DAOs will gain prominence as a decentralized, secure and transparent alternative to investing through GP/LP venture structures.

Investing in Decentralized Autonomous Organizations (DAOs) will continue to grow in number and popularity as transparent, auditable, and collaborative tools for deploying and distributing capital. Investing in DAOs will force a mindset shift in financial decision-making; instead of relying on the opinions of a handful of experts, these DAOs will operate based on the consensus of members around the world by "curating the wisdom of the crowd". As nimble on-chain entities, these investment DAOs will be the earliest participants in high-potential investment opportunities, leveling the playing field for ordinary investors.

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8. The Future of Filecoin

Filecoin became a fully fledged Layer 1 protocol, paving the way for the world's largest decentralized data economy.

In 2020, I predict that IPFS and Filecoin will take the global spotlight as a viable decentralized data storage solution. Two years have passed, and the Filecoin network has indeed expanded at an extremely fast rate, accumulating a staggering amount of hardware for the network. It is now the largest decentralized storage network on the planet. More than 4,000 storage providers contributed approximately 16 EIB of storage capacity. Year-to-date, customer data stored on the network has increased 15-fold. That's enough to store the entire Internet Archive 275 times. That said, to compete with centralized clouds, Filecoin would need to grow by more than 10x — a long way to go, but a solid path.

Filecoin's vision has always been bigger than storage. The project's community is firmly committed to the ambitious goal of building the decentralized infrastructure needed to enable programmable storage (via smart contracts), retrieval, and computation of data at scale. In other words, Filecoin is enabling open services for data.

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9. Web3 Reputation

With the launch of numerous reputation projects, reputation will once again be a fundamental innovation of Web3.

Years of progress in decentralized identity and reputation will finally culminate in 2023. These systems will start to be a critical part of the infrastructure that underpins most of our interactions and transactions, especially in Web3. In no time you'll be able to apply the reputation you've built up on one app to another. Decentralized identity and reputation systems make this possible by taking a more holistic approach to identity through platform-agnostic, user-centric data aggregation.

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10. ZK Everything

Get ready for the rise of "ZK everything" as privacy technology evolves from an academic proof-of-concept to a usable, scalable technology.

Zero-knowledge proofs (ZK: zero-knowledge) have gained attention over the past year, with one use case, ZK-Rollups, gaining prominence as a major tool for scaling Ethereum. By 2023, a wider range of use cases will be unlocked through the adoption of software development kits (SDKs) that allow ZK smart contracts to be programmed into applications (“ZKApps”), executed off-chain, verified and settled back on-chain . Off-chain execution opens up a whole new world of data privacy and proof and efficiency. It will begin to bridge the gap between Web2 and Web3 and will enable new identity use cases, social networking, voting, gaming and zkML.

Key to ZK's success in 2023 is access to existing Web3 developers. O(1) Labs -- the company behind the first neat ZK-based layer-1 MINA -- has launched an SDK that will better support the development of in-browser ZKApps in the coming year. These developments from 2022 will mean that in 2023 ZK will move from the world of academia and testnets into everyday Web3 life. Additionally, teams such as Matter Labs will launch zkSync 2.0, a zero-knowledge Ethereum virtual machine that supports Solidity, Vyper, and account abstractions.

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11. Cosmos universe

The universe gets interesting as developers and users look for more customization. Appchains will also be live on Ethereum.

In 2023, the "Vision of the Universe" will finally achieve mass adoption. Cosmos is not a blockchain, but a "galaxy" of interconnected chains. Importantly, all chains employ the Inter-Blockchain Communication (IBC) standard, a technology designed to emulate earlier innovations at the TCP/IP layer in Web2. Bridges are the most lucrative attack vector for hackers, with attacks totaling $2.5 billion since 2020. It only makes sense to have a standard communication layer.

Also, as blockchains mature in adoption, developers will be forced to embrace and own more of the blockchain stack, customization will rise, how much security do you want or need for your blockchain? Is it open to all developers? What is the cost? Where do you want to connect? A multi-chain approach enables these customizations and potentially unlocks true product-market fit.

Appchains enable developers to customize the execution environment in ways that smart contract platforms cannot support. The challenge is that Lisk loses the shared security enjoyed by dapps. App-specific rollups (RollApps) are the best of both worlds and will be a big trend in 2023.

However, as Cosmos grows, we will see the rise of specific application chains built on top of Ethereum. As the largest project in the blockchain ecosystem, Ethereum can transplant the essence of open source to the Ethereum community.

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12. Bitcoin

Bitcoin will face headwinds, continue to lose market share, and will not lead the next bull run.

Bitcoin will continue to lag in the market as it succumbs to prevailing headwinds: primarily “pet rock” syndrome, environmental concerns and failure as “digital gold.”

As other tracks on Web3 start to demonstrate real-world use cases, Bitcoin's lack of day-to-day utility will start to work against it. It will succumb to the “pet rock” syndrome, where holding the asset seems unattractive compared to directing capital to a growing token and ecosystem for business and corporate use.

Environmental, social and governance (ESG) issues will only rise with the macropolitics and macroenvironmental movement. Businesses, individuals and governments will continue to be under pressure to curb unnecessary energy consumption while cryptocurrencies have come under scrutiny. Environmental concerns are just one of the reasons Web3 prefers Proof of Stake, but coincidentally, this will make PoS blockchains more resistant to ESG criticism and regulation. Any remaining PoW chains must demonstrate unambiguous utility to verify continued energy consumption. Bitcoin will not transition to PoS and its utility will remain limited, making it a prime recipient of such criticism.

Finally, Bitcoin had the opportunity to act as a digital gold-like safe-haven hedge, but failed to seize this opportunity for many years. Instead, it behaves more like an adventure tech beta.

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13. Web3 Gaming

Web3 games will move beyond their flawed early projects and finally start meeting gamers.

So far, Web3 gaming has largely failed to deliver on its vision. The most “successful” Web3 games — Axie Infinity and DeFi Kingdoms, for example — were billed as the future of gaming, but failed to impress the world's 3 billion gamers. In fact, Web3 games have always been infamous for being characterized as nothing more than money grabs or masked DeFi. This reputation has not improved as Web3 gaming projects are highly correlated with the crypto market.

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14. Second floor

As the Layer 1 protocol continues to develop core aspects of scalability and privacy, Layer 2 will enable the next wave of consumer-friendly applications.

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15. DeSci

Decentralized Science (DeSci) will take center stage for another major Web3 use case, open source collaboration and decentralized fundraising. The DAO will be at the forefront of this movement.

In 2023, DeSci will transform scientific research into a Web3 native asset class through IP-NFT (intellectual property NFT), ushering in a new era of scientific discovery, comparable to the huge breakthrough of open source software development in the early 2000s. Fields such as biotech will move from a monopoly innovation model to open-source, highly collaborative ecosystems where outcomes are fundamentally aligned with patients and researchers.

In 2022, organizations such as Molecule will bring the IP of the world's leading universities to the chain, and receive funding and support from new decentralized biotech organizations such as VitaDAO. VitaDAO is a BioDAO on Ethereum that builds a portfolio of long-lived assets and is committed to bringing these technologies to market in a community-driven manner, much like FlamingoDAO for biotech. BioDAO is the community funding and incubating IP-NFTs and has seen a market opportunity with four new projects participating in a new accelerator program bio.xyz.

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1 6. Zombie Blockchain

The remaining vaporware blockchains will eventually lose their status as "top" blockchains as even speculative money leaves these ecosystems.

For years, virtual software blockchains like EOS and Cardano have been among the “top” blockchains by market capitalization (Cardano top 10, EOS top 40). While the Web3 track is rapidly innovating, these projects have been under hype from the beginning, and have hardly experienced the development of the ecosystem.

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17. Decentralized Identity

The growth of reputation projects, social networks, and decentralized identities will enable AML/KYC solutions down to the wallet level.

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18. The aftermath of the crypto storm is not over yet

Be prepared for more consequences.

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19. Open source development

By 2023, there will be renewed focus on leading open source development projects to prevent a repeat of the same mistakes in the encryption space.

2022 will be a year of mass formation for open source, internet-native organizations. The breadth and scale of problems that the Web3 community has chosen to address with these new models has grown by an order of magnitude, and the impact these organizations can have on everyday life is starting to become a major theme.

As we've learned from cases like FTX, it's easy to fall back on old habits and accidentally reinvent the same broken systems that centralize power rather than push it to the fringes. By 2023, we'll see more projects concluding that we need to take our word for it and start taking meaningful steps toward building open-source, community-owned infrastructure; A world in which digital public goods can be provided to any local online community in a mutually beneficial manner that strengthens trust rather than diminishes it or abstracts it. Two projects in particular will go on to define the model of open source funding and development: Gitcoin and Tea.xyz.

Gitcoin — which has distributed more than $72 million in grants — is launching a “Grants Suite” that will enable any group to seamlessly empower their community members to coordinate funding for projects that meet their shared needs. The suite will include Passport, a zero-knowledge authentication tool, and two new protocols: the Funds Allocation Protocol and the Project Registry Protocol.

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20. No more "gods"

The media will give up chasing the gods and look for a voice of reason in cryptocurrency.

As major centralized finance (CeFi) and DeFi projects collapsed last year, so did their founders and CEOs. These individuals are heavily supported by the media, leading to misplaced trust among investors, companies, and regulators. The media will need to confront its obsession with crypto “godmen” and find prudent, rational voices in crypto. This will happen slowly but surely throughout 2023 as more of the true nature of "God" is revealed.

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21. Technical Encryption

"Crypto for technology" will become useful, replacing "crypto for money" and setting the stage for the next bull run.

In Bill Hughes' November column, he explains the difference between "technical encryption" and "currency encryption." Technical encryption is about "a peer-to-peer computer network in which participants transact by interacting with globally accessible software." Money crypto is about "buying, holding, lending and trading tokens as investable assets".

The past year has been dominated by cryptocurrency crypto in terms of popular adoption, regulatory concerns, and consumer knowledge. Centralized exchanges have always been the "heart" of cryptocurrencies, and regulators are now taking a look at CeFi's prospects. A review of currency encryption will lead to clarification of technical encryption as a related but separate field.

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