It’s been more than a month since we entered the new year. Meanwhile, the cryptocurrency market is already showing signs of sustainable recovery, and the resulting “creative destruction” could ultimately be a huge win, not only for the consumer, but also for regulatory protections and rapid innovation. Despite many ups and downs, the crypto space has become a serious player in the world economy. Investors are still transferring their portfolios to the asset class. According to OKX’s new report, five key trends that will define 2023 in crypto investment stand out.
The first trend in the cryptocurrency space: Ethereum developers
The development in the Ethereum ecosystem is constantly increasing. Completing the transition from Proof of Work to Proof of Stake resulted in a 99 percent reduction in energy consumption. On top of that, several Optimism Layer-2 networks are scaling. Sharding, on the other hand, will be another milestone for Ethereum, increasing the number of transactions per second to over 100,000 once the Shanghai upgrade approaches.
The design will basically pave the way for a much cheaper and faster implementation that will enable tier 2 networks to evolve. Coins that are particularly focused on scalability in the Ethereum ecosystem include coins such as Polygon (MATIC), Loopring (LRC), Skale (SKL), Optimism (OP) and ZKSwap (ZKS).
Wallet developers gain momentum
In recent years, the DeFi and Web3 space has been flooded by finance enthusiasts. The COVID pandemic has spurred tens of millions of gamers and traders into GameFi and P2E projects, and this trend seems to be intensifying. Then big players like Yuga Labs, Reddit, and Starbucks brought in traditional users with their NFT products. Several blockchain networks have also joined forces with big brands to attract new users.
Meanwhile, the storage and retrieval of both public and private keys has been a key ingredient in Web3 security. But wallet developers are now seeing huge investments in improving the experience and usability. The largest wallet projects and tokens include platforms such as Trust Wallet Token (TWT), Loopring (LRC), SafePal (SFP), SXP (SXP), and Coin98 (C98).
Is the DeFi space coming to life?
Some developments in the second half of 2022 led to the collapse of several leading crypto companies. The total value (TVL) locked to DeFi has been hit hard, dropping over 76 percent. Failures are expected to lay the groundwork for “greater innovations to come.” That’s why the industry wants to develop decentralized stablecoins that could have real-world benefits. Among the largest DeFi coins are coins such as Avalanche (AVAX), Dai (DAI), Uniswap (UNI), Chainlink (LINK).
The NFT market suffered a similar fate at the height of the crypto winter. But beyond profile photo NFTs, which have no utility beyond their social nature, the combination of this space with DeFi can bring value and equity. This is expected to trigger the NFT-Fi boom in the future. As we reported on Kriptokoin.com, there are major NFT coins such as Axie Infinity (AXS), ApeCoin (APE), Flow (FLOW), Decentraland (MANA) and The Sandbox (SAND).
Cryptocurrency industry focuses on infrastructure
According to the report, unauthorized and decentralized infrastructure projects may attract more attention this year. For example, validator adoption of mev-boost has reached 90 percent since 2021. With OFAC’s enforcement of Tornado Cash, Flashbots mev-boost roll-up validators are under control. On the bright side, the MEV landscape is poised for a big change. Layer-2, application chains and liquidity fragmentation brought by multiple chains can provide great opportunities for MEV. The introduction of Sharding is expected to change the way Flashbot typically mines on Ethereum.
In addition, centralized data tools such as Dune and Glassnode dominated the field of investment and on-chain data analysis. But decentralized data tools will become a central focus for developers in the coming months.
On-chain security is gaining in importance
The area has witnessed widespread scams where hackers are rampant and irreparable. Therefore, topics such as on-chain data, monitoring tools and asset recovery tools, Web3 security governance, on-chain activities monitoring, Web3 user behavior, tracking lost assets and anti-money laundering will be the main focus for 2023. Web3 coins include coins such as FIL, LINK, DOT, ICP and GRT.
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