2021 has been an extraordinary year for crypto. We saw decentralized finance (DeFi) swell to a $100 billion+ industry, bitcoin (BTC) reach a price peak of $69,000, massive ecosystem growth for companion blockchain networks (layer 2) such as Arbitrum and alternative chains like Solana, over $22 billion in sales for non-fungible tokens (NFT) and more mainstream and institutional interest than ever before.
Here are six of my top predictions for how the sector will fare in 2022:
- L2s and Rollups: Rollup scalability platforms built on Ethereum, such as Arbitrum and StarkEx, will continue to gather traction as an immediate and long-term solution for Ethereum’s increasing network congestion.
- Non-Ethereum/Bitcoin Chains: Decentralized application (dapp) ecosystems in alternative smart contract blockchains, such as Solana and Binance Smart Chain, will continue to grow as bridges increase cross-chain access to liquidity and developer platforms make it easier to launch dapps on other chains.
- Composability and Web 3: Projects will find new, powerful ways to integrate with one another to create a unified user experience across the online ecosystem. Mechanisms for digital ownership and data management will also expand, allowing for the development of a more robust, high-utility digital identity.
- Expansion of NFTs: NFTs will continue to soar in popularity as the digital art ecosystem grows. NFTs will also power several use cases in verticals besides pure images, including gaming, music and creator/influencer fanbases.
- DAOs: More decentralized autonomous organizations will launch around unique, fascinating use cases as people increasingly buy into the concept of digital collective action. Along with the growth of DAOs, we’ll see significant development in tooling for DAO management and operations as DAOs grow more complex in organization and function.
- DeFi Security: On the heels of several large DeFi exploits in 2021, security will be a bigger priority than ever for DeFi protocols in 2022. Projects emphasizing runtime security and insurance against smart contract attacks will help secure dapps on various blockchains, increasing mainstream users’ confidence and trust in DeFi as a financial ecosystem.