Much has changed in the blockchain and crypto world in the past year. However, despite the shocks of 2022, developers continued to build useful decentralized projects, enabling the technology to unlock the next level.
The roadmap for 2023 success is solid as communities and projects have identified what is bound to thrive. In this article, we examine the top blockchain trends that will be prevalent in the months ahead and what they signify for the development of the industry.
Ethereum’s time to shine (again)
Ethereum will continue to be the most extensively used and developed layer 1 blockchain in 2023. Since Satoshi’s Bitcoin Genesis Block in 2009, The Merge has become the main event in the blockchain space. On Ethereum, other equally significant roadmap innovations will take shape, stimulating further adoption and investment that will place Ethereum as the industry leader in the future bull run.
Shanghai, scheduled for 2023, will be the next Ethereum update following the Merge. Among other improvements, Shanghai will make it possible to remove ETH stakes that have been locked in the deposit contract before. With the option to un-stake ETH, stakers who were concerned about locking their investment may choose to participate, which could result in a rise in the amount of ETH that is staked.
Moreover, Proto-DunkShading (EIP-4844) is also shipping next year. Dankrad Feist, an experienced Ethereum researcher, developed it to boost security and decentralization. Notably, it will create blob transactions, transporting information utilized by rollups. This new transaction type could lower the cost of block space for rollups and bring Ethereum closer to Danksharding.
Overall, the foundation of humanity’s social, economic, and political system is evolving in Ethereum, which we can observe today and will observe in the coming years.
More functionality for stablecoins
Market capitalization presently values the market for stablecoins at $140 billion. And even though various stablecoins operate differently, they share the same goal of stabilizing the volatility of the crypto space.
A notable DeFi development in 2022 was the proposal of a new generation of stablecoins by projects like Aave. This trend will also continue into 2023 — but why is this important?
The Aave team presented the GHO stablecoin concept in July 2022. It differs from others; while tied to the US dollar, it isn’t backed exactly by fiat money. Instead, GHO employs a multi-currency, over-collateralized minting model to work.
According to the co-founder of Aave, the GHO vision could enhance the functionality of current stablecoins through Aave’s integrations with new blockchains and layer-2s. As a result, it would become the first-ever opportunity to utilize stablecoins as internet money to address real-world payment issues while still using blockchain technology.
The future is ReFi
ReFi combines two different fields: decentralized finance, which seeks to eliminate opaque, centralized intermediaries to democratize both the access to financial services and the management of the financial system itself; and regenerative economics, which is focused on balanced, circulatory capital flows that integrate both positive and negative externalities while caring for individuals and the community.
As such, impact Investing is one industry primed for change in 2023. The goal of impact investing is to provide financial profits and positive social or environmental effects. ReFi would make it possible to launch “impact DAOs,” that participate in initiatives that benefit the world. For example, these DAOs can fund initiatives for affordable housing and green energy projects.
The next wave of Web3 gaming
Over 1,550 blockchain games are available as of June 2022, making 2022 a significant year for Web3 games. Decentralized gaming apps have a huge growth potential, considering the gaps in the Web2 and Web3 games. With a solid base from 2022, we think that more developers will begin researching the possibilities of Web3 games and that more investors will invest in such Web3 initiatives.
Today’s play-to-earn games are popular among users because they help generate a sizable income from their game rewards. P2E offers countless possibilities, as, by 2029, the esports market will be expected to hit $5.48 billion. Yet, the pragmatic nature of these games tends to limit their appeal.
That is why Web3 gaming has developed a poor image, being seen as little more than a money grab or DeFi with a mask. Unfortunately, due to Web3 gaming projects’ close ties to the crypto market, this reputation has not yet changed, but it’s about to.
2023 will see Web3 gaming break off the traditions of its early games and begin to produce projects that integrate Web3’s functionality with conventional gaming’s aesthetics. So, in a year, we will see a larger and more varied market for Web3 games, stimulating more development and resulting in higher-quality games.
Maturation of NFT utility
The “jpeg” era of NFTs that characterized the Web3 ecosystem over the last two years will come to an end in 2023. Since many use cases employing NFTs as the setup have launched, “NFT” would no longer automatically imply “digital art.” Next year, the world will progress past the “jpeg” age, and NFT usage will become more complex, individualized, and commercial.
In the coming months, more NFT platforms will give essential services that users can utilize to get something substantial, like points or community development, instead of only being based on the opportunity to make quick money from an NFT transaction.
For instance, Web3 brand Psychedelics Anonymous recently introduced a token-gated retail line where customers require an NFT from one of their collections to buy garments. Shoppers participate in a “Wear2Earn lifestyle app, “providing them with NFTs and special benefits. Based on post-sale analytics and real-world data, the brand can better understand consumer wishes and needs.
A huge transformation is now happening in the NFT space, making some artists uneasy. Nevertheless, many users are taking advantage of the inherent transparency and accessibility of NFT technology. This is a sign that NFTs will be a building brick for the foundation of a solid Web3 ecosystem.
Another promising thing for the niche is non-transferable tokens, a concept crafted by Vitalik Buterin. A non-transferable digital token symbolizing social identity in a decentralized society is also called a soulbound token. SBTs can, in the most basic sense, be “self-certified” in a similar way to how a resume-builder can include a person’s educational background or professional experience.
Decentralized IDs and verified credentials will serve as the foundation for Web3 apps. So, soulbound tokens could be utilized for decentralized identities alongside various possible uses, including those for gaming, health care, digital and physical reputation, insurance, tickets, ID cards, and more.
Investment DAOs to gain momentum
We believe 2023 will be the “Year of the DAO,” and investment DAOs will have a major role to play. Even today, we can see a massive increase in DAOs and the huge technical developments that have made it easier for anyone to start a DAO.
An investment DAO typically follows a set of rules, as it may be created to invest in particular market segments. Investment DAOs will gain popularity as decentralized, safe, and open-source replacements for investing via GP/LP venture models. The purpose of an investment DAO is to collect funds from its members and invest them in different initiatives.
Investment DAOs have the power to bring about a transformation in how individuals make financial decisions. Rather than depending on the judgment of a few specialists, these DAOs will make decisions using the consensus of their members worldwide.
Make a headstart on 2023 with INC4
If the past is any indication, downturn markets have proven to be the optimum moment to grow, innovate, and invest, and that’s what we saw in 2022. That’s why 2023 will be an exciting year to build new decentralized solutions.
If you want to take your business to the next level and make a headstart in the new year, be sure to get in touch with our INC4 specialists to discuss your project idea!