2021 in review
When we started the year 2021, the word Metaverse was not really a household name, neither was 'NFT'. As the year progressed, we all witnessed how Metaverse and NFT became the buzz words of the year. In my humble opinion, these two concepts defined the crypto space for the year 2021. Recall that it was in 2021 when Cyber punks sold for record millions of dollars. It was in 2021 when the NFT artist Beeple sold his artwork for a record 69 million dollars. It was in 2021 when Tweets were being sold for millions to the highest bidder. It was in 2021 when NFTs could be made on non Ethereum leading blockchains such as Solana and Tezos. Indeed 2021 was the year of the NFTs.
Earlier in December 2021, this crypto punk sold for 10 million dollars!
The ability to tokenize virtual assets on the block chain such as in-game items or virtual plots of land gave rise to the popularity of Metaverse/NFT projects like Axie-Infinity, Decentraland, Gala games, Sandbox, Theta and Enjin.
The 2021 hype of NFTs was a brainchild of the hype of Crypto Kitties started in the second half of 2020. Crypto kitties is a blockchain game on the Ethereum network where you can breed virtual cats. These cats are valuable depending on the different attributes. Based on the popularity of Crypto Kitties, more projects tried to jump on the NFT train this year.
What trends to expect in 2022
Going by the activities of 2021, we can try to predict what 2022 might hold for us in the crypto world. The following 4 trends are mostly likely to be where the most success will come from:
We are just getting started to scratch the surface of what we can do with ownership of virtual items. Block chain games and NFTs are a match made in heaven. Play-to-earn games have made it possible for players to monetize the time time they spend playing games. This has been made possible by the fact that players can own in-game items and trade them in the marketplace. The year 2022 comes with the promise of discovering more use cases for NFTs beyond games. There are already some use cases of NFTs beyond games (Audius (AUDIO), for example). Such other use cases for NFTs could go mainstream in 2022.
While we are still at the topic of games and NFTs, it would not be so surprising in 2022 if one of the big tech corporations like EA builds a play-to-earn on block chain or partners with one of the existing block chain games.
The Metaverse was already a buzz word in the crypto space (or at least on Crypto Twitter (CT) where I spent an unbeliavably huge amount of time during the year). Facebook's name change to Meta to reflect its new direction towards building for the Metaverse reignited the interest in Metaverse projects in the crypto space. AXS, MANA, ILV and SAND are some of the projects that had a good run after Meta's announcement. I anticipate that Meta's plans to build a centralized Metaverse will be met by equally ambitious plans to build a decentralized Metaverse in the crypto space. Therefore, 2022 will likely give rise to Metaverse projects in crypto as we build a virtual world that connects to the real world.
The Metaverse will be a big part of our lives
3. Web3 (and its monetization)
The internet has evolved from an era of simple static pages to a generation where pages are more dynamic and interactive. Additionally, content on the internet is user-generated. However, ownership of content has been in the hands of corporations who make billions off that content. Going forward, web3 promises a decentralized web that is not owned or controlled by any single entity, and data belongs to the creator/publisher. Web3 also promises an era of the internet where users will not have to give up their personal data to advertisers. A lot of projects in crypto are already building decentralized apps in web3, and it can be expected that some of these projects will start to go mainstream in 2022.
4. Layer 2's and smart contract alternatives to Ethereum
The popularity of Ethereum as a smart contracts platform has continued to outpace most cryptocurrencies. However, Ethereum have scalability issues of its own. As more users get on the network, transactions become very expensive to the extent that it creates a barrier to entry that hinders adoption. Consequently, this has created a demand for cheaper and faster smart contract solutions.
Going into 2022, it should be anticipated that Ethereum will grow bigger, as evidenced by institutional interest already (Budweiser, Adidas, Nike). As the network grows faster than the scaling solutions, transaction fees will skyrocket to the extent that a lot of users will avoid making transactions on the ethereum network altogether. Only people with money to burn will transact on ethereum.
Layer 2's and smart contract platforms like Polygon (MATIC), Boba network (BOBA), Loopring (LRC), Solana (SOL), Avalanche (AVAX) are expected to have a good run as we wait for ETH 2.0
Layer 2's like Boba network will flourish while we wait for ETH 2.0
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