As the year draws to a close, companies in the crypto space have shared with Cryptonews.com their 2022 predictions regarding major trends on Ethereum, DeFi and the impact on TradFi.
1. Consolidation of Ethereum’s position
Some scholars are optimistic about the future of the Ethereum (ETH) network, which has received its fair share of criticism this year due to prohibitive transaction fees.
“We believe that once Ethereum moves to Proof-of-Stake (PoS), lower Layer 1 transaction fees will consolidate Ethereum’s position as a preferred space for use. DeFi applications, “said Yenwen Feng, co-founder of the decentralized derivatives trading platform Perpetual Protocol.
Layer 1 refers to the Ethereum network itself, while Layer 2 refers to any chain built on top of the base chain, usually to make transactions faster and cheaper.
Will harborne, CEO and co-founder of the decentralized finance platform (DeFi) DeversiFi, also believes that Ethereum’s position as a base layer will consolidate. According to him, 2022 will be the year when Layer 2 chains built on Ethereum achieve “critical mass adoption” – and overtake the base layer in terms of total blocked value (TVL) and volume.
2. Continuous growth for “play-to-earn” type games
A trend that has already taken off this year, and which, according to several companies, should continue next year, is the rise of crypto “play-to-earn” games. Sometimes referred to as GameFi, this sector of the crypto space sits at the intersection of DeFi with games and the metaverse.
“Play2Earn or GameFi is the sector where I see the greatest growth potential: indeed, it is the easiest way for more than a million people to join the ecosystem within 1 to 2 years”, said Jori armbruster, CEO of the social loan platform EthicHub. “The entire gaming industry will pivot to be built on top of public blockchains, bringing millions of users to these networks.”
Likewise, George harrap, co-founder of the DeFi protocol Step Finance based on Solana (SOL), is also bullish on the crypto gaming industry, but has stated that these will not rely on Ethereum Layer 1, but rather on various second layer solutions and alternative blockchains like Solana.
“For example, Axis Infinity [AXS] had to build its entire new blockchain on [la sidechain Ethereum] Ronin, because Ethereum was slow and expensive. You can’t build a gaming platform on Ethereum’s L1s, ”said Harrap.
3. Ethereum will face competition
While some are optimistic about Ethereum’s position next year, others believe the market’s second-largest cryptocurrency will face increasing competition from both Layer 1 blockchains and Layer 2 solutions. , especially when it comes to crypto-gaming.
“The Ethereum issues are not going to be resolved next year, far from it, so we’re going to see a proliferation of layers 2 and layers 1,” said George Harrap of Step Finance.
4. Regulatory clarity and convergence of the crypto and TradFi sector
Several companies have also indicated that 2022 will be a year when regulations become clearer around the world. According to some, this could further blur the lines between crypto and traditional finance (TradFi).
“2022 will certainly see a clarification of national regulatory frameworks, for better or for worse,” said Johannes schweifer, CEO of blockchain infrastructure provider CoreLedger. He added that crypto “can no longer be ignored”, and that governments will be forced to “support or suppress the technology.”
According to Sidney powell, co-founder of the institutional capital market place Maple Finance, a growth of regulatory-compliant DeFi services will also lead to “a great boom in institutional credit flows in the digital economy.”
“[…] the forces of DeFi and TradFi will converge, “and institutional sentiment will turn in favor of crypto, argued Powell.
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