The cryptocurrency industry in 2022 was hit by black swan events like the Terra-LUNA crash, the collapse of cryptocurrency exchange FTX and the subsequent fall from grace of its founder Sam-Bankman Fried, who was among the most lauded industry figures just a few months ago.
Forkast spoke to crypto industry experts to reflect on the potential of blockchain technology and discuss trends for 2023.
See related article: Crypto winter may last until end of 2023: Coinbase research
Traditional companies adopting Web3 could end crypto winter
- “In 2022, I saw many Web2 companies accept crypto payments and add blockchain innovations like NFTs (non-fungible tokens) to their services… This is a trend that will continue to grow as more people become aware of blockchain technology,” Alex Onufriychuk, head of growth at blockchain-based music crowdfunding platform Corite, said.
- “The key to the next ‘crypto summer’ will be mass adoption of Web3 elements by traditional Web2 companies. As this transition accelerates, more attention will be spent on designing interfaces and experiences that are more intuitive for the average user,” Onufriychuk said.
- “Adoption starts with three main components: simplicity, security, and applicability. We see a trend in this direction, as well as some ‘best practice’ inheritance from Web2 services. The ability to combine what people used to do with something new is what will define future blockchain trends,” Vlad Shavlidze, the founder and CEO of xDAO, a multichain decentralized autonomous organization (DAO) builder, said.
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- “[We expect to see] significant adoption of decentralized finance (DeFi) by institutions due to permissioned pools and decentralized compliance protocols such as PureFi,” Slava Demchuk, chief executive officer of AMLBot and compliance protocol PureFi, said.
- “Integration of permissioned DeFi protocols within the backend of traditional banking systems [is necessary] to provide their customers a more attractive and trustless alternative to current financial services,” Demchuk said.
See related article: Is DeFi at war with traditional finance, and should TradFi be scared?
Gaming will drive mass crypto adoption
- “Gaming will be a major driver [of mass adoption], and more generally, blockchain culture as represented by NFTs of various kinds.” Yat Siu, cofounder and executive chairman of Animoca Brands, said.
- “We’re going to see a big wave of high-quality games emerging in the market, which will basically bring on more mass adoption. That will come into full effect somewhere in 2023, maybe spilling over 2024. And so, we should expect a wave of potentially hundreds of millions of users entering the space for that reason,” Siu said.
- “Gaming [will grow], probably on Polygon, but could be anywhere besides Ethereum. So much investment has been made into gaming companies over the past year or two. The gamers will first come from Asia and then eventually from the more-hesitant North American audience,” Randy Wasinger, founder and CEO of NFT data aggregator CryptoSlam, said.
- “Gamers are already familiar with many online transactions using digital currencies which prepares them very well to participate in blockchain-based games and since the market is already so large – with over 2.5 billion video game players – the potential for growth in blockchain gaming is very promising,” Saro McKenna, cofounder and CEO of play-to-earn game Alien Worlds, said.
- “Both gaming and metaverse applications are following a rapid growth curve and consequently we expect that cryptocurrency user numbers will continue to rise during 2023, despite the ongoing crypto winter,” McKenna said.
- “Gaming will likely be one of the next areas that innovate things forward,” Lex Sokolin, head economist at Ethereum software firm ConsenSys, said.
See related article: Why play-to-earn gaming is losing steam and where GameFi must go next
DAOs could reach their full potential
- “DAOs will perhaps be the most important development trend of 2023… Participating in [Alien Worlds’] DAO-based elections to a planet’s council enables a player to be elected to the governing council, to play a role in decision-making, and to oversee the expenditure of treasury funds… This kind of new opportunity is already starting to intensify the activity levels in our worldwide community of users,” McKenna said.
- “In 2023, new models of governance and collective financial management will be the focus, as DAOs offer a way to address current issues of centralization and lack of transparency in the crypto industry. Companies will be drawn to DAOs for their improved accountability and transparency,” xDAO’s Shavlidze said.
- “In terms of applications, we are likely to see growth in tools that enable DAOs to produce useful economic goods. That includes financial tooling for payroll, governance management platforms, and other on-chain collaboration software,” Sokolin said.
See related article: ‘It raises really interesting questions’: How regulators are approaching DAOs
NFTs will gain more ground
- “[Next year, I expect] more advanced revenue models for creators beyond forced royalties on secondary market transactions – especially for non-art digital assets – [and] the rise of a wider array of digital asset classes, tokenized almost exclusively as NFTs rather than their fungible counterparts,” CryptoSlam’s Wasinger said.
- “We should expect some big names from multiple industries joining in this movement in the next couple of years. For example, mainstream social media platforms and AAA game studios are already experimenting with the use of NFTs,” Corite’s Onufriychuk said.
- “Different kinds of applications are going to be invented for NFTs. They’re not just pictures that you put money into and hope that it grows in value over time. It’s not going to be just a speculative asset, but rather, the Lego blocks that will become the next version of the decentralized internet,” Gary Liu, founder and CEO of Artifact Labs, a company that focuses on historical non-fungible tokens, said.
- “Natively digital economies are starting to emerge, and digital goods like NFTs will continue to evolve. Just like the internet went from flat websites to interactive cloud software, tokens will evolve from being flat digital goods to much more interactive, customized, and intelligent digital on-chain agents. We haven’t seen generative AI interact with Web3 meaningfully, but I suspect the technologies will find promising overlaps,” ConsenSys’ Sokolin said.