Crypto 2022: Glimpses of Hope and Light Amidst Some Stumbles
By The Cryptonews
As 2022 draws to a close, we are about to bid farewell to what has been an extremely difficult year for many crypto assets and blockchain participants.
The crypto industry enters its winter, but the seasonal changes in the exchange market did not hinder the development and popularity of blockchain technology.
There is no doubt that despite the harsh comments that talks about short-term instability, the market has still made a lot of progress since 2021.
1) Although there were extreme events, the market is generally going upwards
Before the ring to signify the end of 2021, the crypto market suddenly rose to a record high, and has been able to maintain this standard.
However, after a series of extreme events, it has shaken market confidence to a certain extent.
Although there are no new record highs being made this year, but in Chainanalysis’s “2022 Global Crypto Adoption Index”, they observed that “global adoption remains well above its pre-bull market 2019 levels”.
The total value locked (TVL) of DeFi fell from almost US$250 billion to US$42 billion. Just from the Terra incident alone, it has vaporised US$75 billion.
An important influencing factor is also the fall in crypto assets’ prices. However, once the market recovers, DeFi may see the light of day.
The trading activity of NFTs has also dropped, where trading volume has fallen below 2021’s statistics.
There was a wave of high in April and May, but the end of the year was bleak.
Many reporters have written articles about the stark contrast between these two periods.
Nonetheless, some still think that using such an analogy is too extreme and that there remains much more to be explored.
If such can be realised, the adoption of NFTs may continue to advance.
2) It has been an arduous year, but it has its highlights too
On the main public chains in the market, Ethereum has managed to switch from proof-of-work to proof-of-stake through upgrading of The Merge.
The entire upgrading progress was very successful and ushers in a new era of more environmentally friendly transactions and lower network fees.
Data has shown that since the switch to proof-of-stake in in mid-September, the growth of $ETH’s growth has fallen greatly from 3.58%/year to 0.005%/year.
In reality however, coupled with the burning mechanism, $ETH was in a deflationary state in November, and remains so.
BNB Chain: Their performance this year is considered remarkable.
Although compared to the beginning of the year, their market value has dropped by 45%, but compared to Ethereum’s -64% and Solana’s -90%, it still looks optimistic compared to other major public chains.
Activity on the BNB Chain is extremely high daily.
Both the BNB Liquid Staking and zkBNB are highlight-worthy projects.
The innovation and collaborations from the field of NFTs are also in full swing.
Open Sea has recently officially announced their support for the BNB Chain’s NFTs.
Polygon: As an extension of Layer 1s, Polygon has provided a lot of solutions for the market.
This year, Polygon’s has had a strong performance.
The recently popular ones such as Starbucks NFT, Reddit NFT and Instagram/Meta NFT all came from Polygon.
At the same time, many new Layer 1 projects have emerged, with the most well-known one being Aptos (mainnet released in the 4th quarter of the year) and Sui (expected to launch in early 2023).
Both projects have quite some innovation, including the Move programming language.
Considering the language’s background and potential, as well as potential to increase transaction speeds, real innovation is possible.
It is worth watching whether these two projects are able to utilise these new technologies to bring significant advancements in the crypto assets market.
Although NFTs trading activity has fallen as mentioned above, it is clear that the universality of NFTs are promoted and has seen the most significant impact in the networking field.
Twitter has allowed for users to upload NFTs as their profile pictures.
Facebook and Instagram now allows users to post and share NFTs. On Reddit, their NFT series has undoubtedly been the most popular series this year.
Millions of Reddit users have already registered their NFT wallets and minted their own NFT avatar.
In terms of regulations, the EU has approved the Markets in Crypto-Assets (MiCA) Regulation. This solidifies the EU’s cryptocurrency regulatory policies.
Although the regulation only comes into effect in 2024, it has provided centralised exchanges the relevant guidelines on hosting requirements, risk assessment, asset marketing, communication and more.
Such a regulatory system that protects the interests of investors will promote the healthy development of the industry.
India has begun their trial of a Central Bank Digital Currency (CBDC), which will benefit over 1 billion people, including many who do not have bank accounts.
So far, countries who have issued CBDCs stand at 11, and there are over 100 countries who are in the preparatory stage.
Most importantly, while there are varying dissenting opinions in the market, projects are still working hard towards building. In order to create better infrastructure for Web3, new Layer 1 protocols continue to emerge.
Promising new technologies such as proofs of knowledge have also made considerable progress.
This year, BNB Chain also launched their technology on zero-knowledge expansion, zkBNB Testnet, and another batch of projects are slated to release zk-EVM.
These will greatly improve cross-chain scalability and interoperability.
The greatest technological advances usually appear during lull periods.
Hence, it is not surprising that blockchain technology is constantly advancing during the market sentiment is bullish.
3) The future will continue to drive towards universality and adoption of the industry
Having gone through many bull and bear runs, CZ is very optimistic regarding this round of market adjustment, “With each market cycle, the industry grows in size.
In 2013-2014, Bitcoin is the only thing in the industry.
In 2017 came initial coin offerings (ICO), although there were many projects which did not succeed in their ICO. Now in 2022, we have the metaverse, GameFi, DeFi, crypto lending and NFTs.”
Market cycles promote the continuous development of the industry.
Although the advancement of blockchain technology was slow at the start and its application was relatively limited, but with the advent of smart contracts and similar technology, it has given application scenarios more leeway.
This has also allowed for even more rapid progress of technology and the industry, and the applications have also diversified.
Furthermore, more traditional institutions and businesses are entering this industry one by one, bringing in not just funds, but also much more talents.
After much turmoil in 2022, CZ shares the new trends that he foresees in the industry, “We can see that many are beginning to use their own wallets.
Compared to a centralised exchange like Binance.com, decentralised wallets like Trust Wallet growing rapidly. Institutional-level businesses and Binance’s hosting services are also experiencing a period of rapid growth.
The grwoth of these two areas are apparent.”
With regards to the universality and adoption of the industry in the future, CZ believes that “the more applications you create, the better”.
Looking back on the history of the internet’s development, it is essentially the history of different people using the internet to create different applications.
Today, we do not even talk about the internet.
Using various applications constitute our day-to-day life.
In the crypto asset field, DeFi, CeFi, wallets, faster blockchains, education, improving regulations and such follow the same logic.
All of them are conducive to the universalisation of crypto assets.
Conclusion
Looking back at 2022, the blockchain ecosystem has experienced important growth and development.
Although it has been fraught with difficulties, but the crypto asset communities persevered on, and will eventually become even stronger and more experienced.
Arguably, with every market cycle, it weeds out players who do not have a sustainable business model, and the crypto industry is no exception.
Therefore, despite the volatility in the cryptocurrency market, but with new crypto protocols constantly increasing, as well as the increasing mainstream adoption of existing protocols, it may be the reason for us to stay optimistic towards the future of this industry.
In any case, never forget the importance of lifelong learning. Learn about the world around you and the new technologies regardless of market conditions.
Learn about the rapidly growing blockchain and Web3 industry! We are eagerly looking forward to what the future holds, and cannot wait to begin a new chapter of this industry’s history.
Risk warning and disclaimer: The above content is for general information and education purposes only, and makes no representation or warranty of any sort.
It should not be considered as financial advice, nor is it intended to be a recommendation to purchase any particular product or service.
The prices of crypto assets may fluctuate and your investments may rise or fall.
You may also not be able to get your investment funds back.
You are solely responsible for your investment decisions. None of the above constitutes financial advice.
