Pantera comprehensively sorts out 2022 and focuses on the track

Pantera Capital

21-12-31 17:01

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Original author: Paul Veradittakit, partner of Pantera Capital

Original compilation: Kxp, 0x137, Rhythm BlockBeats

This article is based on an article published by Paul Veradittakitl, a partner of Pantera Capital, on his personal website. BlockBeats compiled and translated it as follows:

Every year, I will The crypto market for the next year makes predictions and reviews the previous year's predictions.

Overview

2021 is an extraordinary year for Crypto: DeFi growth For an industry $100 billion+ in market cap; Bitcoin hits $69000 peak; L2 ecosystem like Arbitrum and Solana; NFT sales exceed $22 billion; and more mainstream than ever and institutional attention.

Here are my six main predictions for how the crypto space will develop in 2022:

L2 and Rollup: Ethereum-based The Rollup scalable platforms built, such as Arbitrum and StarkEx, will continue to receive attention as medium- to long-term solutions to Ethereum's network congestion problem.
Non-Ethereum/Bitcoin chains: Alternative dApp ecosystems in L1 smart contract public chains, such as Solana and Binance Smart Chain, will continue to grow as cross-chain bridges increase the need for cross-chain liquidity while developer platforms It is also easier to launch your own dApps on other chains.
Composability and Web 3.0: Projects will find new and powerful ways to integrate with each other to create a unified user experience across the online ecosystem. Digital ownership and data management mechanisms will also be expanded, allowing users to develop stronger and more useful digital identities.
The expansion of NFT: As the digital art ecosystem develops, the popularity of NFT will continue to soar. Beyond pure images, NFTs will power multiple use cases across verticals, including gaming, music, and creator/influencer communities.
DAO: As people increasingly embrace the concept of digital, collective action, more DAOs will be launched around some unique and compelling use cases. As DAOs become more organizationally and functionally complex, we will see significant developments in the tools for managing and operating DAOs.
DeFi security protocols: After several large-scale DeFi attacks in 2021, the security of DeFi protocols will be more concerned than ever in 2022. Projects emphasizing runtime security and smart contract attack insurance will help protect dApps on various public chains, while enhancing mainstream users' confidence in DeFi as a robust financial ecosystem.

2021 "Crypto Fever"

2021 may be the most exciting and exciting year for the crypto market A tumultuous year. We’ve seen incredible growth and innovation, including Ethereum’s highly anticipated London hard fork, the explosive summer expansion of the Solana ecosystem, and Bitcoin’s all-time high of $69,000 in November. At the same time, we have also seen some inefficiencies and loopholes in the encryption field explode, from Ethereum’s absurd gas fees, to -influential-40-polynetwork-hacker/" target="_blank" rel="noopener noreferrer">PolyNetwork smart contract up to $600 million hack.

It is indisputable that Crypto has captured the public eye like never before. Every day thousands of users register addresses on various blockchains, search NFT collections on OpenSea, invest more in DeFi and Web 3.0. As 2022 begins, I'm looking forward to seeing this mainstream trend guide the direction and speed of innovation in the crypto space-extending the boundaries of the crypto world, and helping crypto technology realize its true decentralized, user-first financial system. vision.

Watch 2022:

Here are some of the things I expect to see significant innovation and growth in 2022 Six fields:

L2 and Rollup

The current biggest criticism of Ethereum is its high Absurd latency and Gas fees, which obviously inhibit the computing power of dApps and keep newcomers who do not have sufficient funds out. The L2 solution is through Execute transactions off-chain (reducing slow, expensive on-chain computations), and then publish batches of transaction data on-chain to solve this problem.

L2 has become very popular in the last year. Arbitrum was launched in September Optimistic Rollup solution, has reached $2.78 billion peak TVL and accumulated 50+ dApps, including 1inch, Balancer and Coinbase Wallet, etc. And ZK Rollup TVL increased from $43.5M to $1.9B and has been used for Scaling the transaction throughput of dApps like dYdX.

As Crypto’s mainstream adoption continues to grow, Ethereum’s network congestion will only get worse, exacerbating its latency and fee issues. Rollup is critical to maintaining Ethereum's growth by ensuring a highly scalable computing infrastructure, allowing ordinary users to have similar or better usability experiences and expectations than Web2.0 applications when interacting with dApps. Both OR and ZKR will gain more attention in the coming year. OR may dominate in the short term, but ZKR, which is more complex in technology, will achieve greater development as a long-term scalability solution.

Non-Ethereum/Bitcoin public chain

At the beginning of the year, 97% of the total TVL of DeFi belonged to Ethereum. Today, Ethereum only owns 63% of that TVL. The L1 public chain competing with Ethereum has shown explosive growth in the past year, mainly due to its considerable scalability advantages and different application scenarios from Ethereum. Solana has had a particularly strong year in 2021, creating a extremely large transaction throughput reached < a href="https://defillama.com/chain/Solana" target="_blank" rel="noopener noreferrer">$15 billion peak TVL and price peak near $260. Recent activity in the Solana community, including contributions to SocialFi and GameFi provides a large amount of start-up funds, which also shows that the ecosystem will continue to grow significantly in the coming year.

In addition to specific public chains, many technological developments this year indicate that 2022 is destined to be an important year for the "multi-chain universe". Cross-chain bridges such as NEAR’s Rainbow Bridge will expand cross-chain liquidity by , Enhance the composability of cross-chain assets to help accelerate the development of non-Ethereum ecosystems. On the other hand, some EVM platforms, such as Aurora on NEAR, also enable Ethereum-based dApps are easier than ever to launch on other chains, further enhancing cross-chain participation in DeFi. Overall, these advances in cross-chain infrastructure will accelerate the development of alternative L1 public chain network effects and promote the development of a truly robust and diverse multi-chain crypto ecosystem.

Composability and Web3.0

“Web3.0” can be said to be 2021 One of the key words of the year, it covers a wide range of fields, so it is difficult for us to determine what it specifically includes. But generally, we use it to refer to technologies that prioritize ownership of user data or assets, and interoperability between different applications.

2021 will be a big year for digital ownership as the NFT industry scales to $7 billion, and as more and more artists and art buyers begin to explore verifiable ownership in the digital space in the future, the entire The NFT industry will see further growth. In addition to NFTs, digital ownership will also be achieved through decentralized crowdfunding (As announced on Kickstarter will On Celo complete decentralized) and Grow with the development of decentralized identity projects. In these projects, users can fully and precisely control their personal data and reputation, so as to realize DeFi unsecured loans, KYC, etc. Next year, more projects will emerge one after another to further expand the scope of ownership on the chain, allowing users to manage their digital identities and assets more comprehensively and functionally.

In terms of interoperability, the cross-chain bridge will greatly enhance the composability in DeFi, so that users can not only conduct cross-chain asset transactions, but also DeFi protocols are used on different blockchains. In addition to DeFi, like login.xyz provides Ethereum Login Service project also It showed us that blockchain can further enhance the composability between applications, allowing users to use only one login method to access all services. Overall, there will be tighter integration between applications and services, and there will be more projects that can improve the fragmented nature of the network.

Development of the NFT industry

NFT is undoubtedly one of the hottest Crypto trends in 2021 one. In just three months, the trading volume of digital assets on the OpenSea platform has risen from US$1 billion to more than US$10 billion, which fully proves the popularity of NFT. NBA Top Shot and Bored Ape Yacht Club have brought NFT into the field of pop culture again, and have become the most popular One of Google's top searches.

Looking forward, we need to note that the market value of physical art is still as high as $1.7 trillion, which means the NFT market is just getting started. However, as the popularity of digital artwork continues to grow, coupled with the gradual Tokenization of physical art, along with improvements in verifiability and market liquidity, the NFT market will continue to thrive in 2022.

In addition to the traditional image form, NFTs of games and music have also appeared one after another, and they have all achieved good development. In gaming, Decentraland and Axie Infinity provides players with tradable NFT assets, allowing players to have complete, multifunctional ownership of their assets and states in the game . In the field of music, Audius and Royal are creating mechanisms that allow fans to directly support the work of an artist they love and receive a portion of that artist's royalties. I believe that in 2022, NFT will extend to more fields, reshape the way we interact with digital media, and let us have a deeper thinking about digital media ownership.

DAO

DAO is also one of the hot trends in the crypto space in 2021 because of its It has gained widespread attention for its achievements in building fair and decentralized collective organizations. This year, not only have DAOs focused on digital cultural identity (such as FWB and pleasrDAO), DAOs in crowdfunding and capital distribution (e.g. BitDAO and ConstitutionDAO), and there are even DAOs focusing on social causes (such as the KlimaDAO). Given their prominence in their respective fields, I predict that in the future DAOs will become mainstream tools for online organization and collective action, enabling people around the world to actively participate in causes they care about.

While the number of DAOs continues to grow, people are also constantly optimizing DAO tools, operations, and introductory tutorials. For example, Syndicate simplifies the process of creating a DAO, which makes it easier for people to collaborate and invest; Station provides users with DAO introductory guidance, allowing people to spend less time than before Build and run a functional DAO. Since the operation of DAOs is becoming more and more complex, I hope we will see more projects in 2022 dedicated to building DAO tools and infrastructure.

DeFi Security Protocol

Compared to the past, people are more concerned about the security of DeFi in 2021 Sex creates more doubts. In total, more than $610 million in funds have been stolen this year due to DeFi vulnerabilities (an increase of 8 times from $77 million in 2020), and another $704 million in funds was stolen, but all were later returned by white hat hackers , just like that $600 million PolyNetwork was stolen. These unexpected events have always been inevitable, but they have brought disaster to DeFi. However, these incidents also just show that DeFi has several major loopholes in the underlying technology, which may eventually limit the development of DeFi to more fields.

In order to make everyone willing to continue using DeFi, we need to develop more protocols and tools to ensure the safety of users when using encrypted financial products. Projects like Forta that allow dApps to monitor security during runtime, and provide intelligence to dApp users Nexus Mutual of contract loophole insurance, etc., have all made achievements in protecting the security of the encrypted financial ecosystem significant progress. Despite this, there are still many vulnerabilities in DeFi's smart contracts, and most of them are not yet known to us. I hope that in 2022, various DeFi projects will put security first, and hope to see more related projects in the fields of smart contract audit, precise operation monitoring and consumer protection.

Final Thoughts

In conclusion, 2021 will not only bring massive At the same time, a surprising number of new products have emerged, including blockchain infrastructure, DeFi, NFT, and so on. Although the traditional network is still highly exploitative, monopolistic and fragmented, this does not prevent encryption from becoming one of the most powerful technologies of our time. It protects privacy, builds trust, perfects composability and decentralization. Has an unparalleled status.

People have never paid more attention to the field of encryption than today, and as encryption technology becomes more and more mainstream, the speed of innovation will take a further leap next year. When people focus on encryption, I believe that encryption will also become mainstream in the entire financial and digital fields, and gradually build a stronger and safer platform, providing a strong foundation for our various network activities in 2022. power.