Blockchain 2023 trends and beyond
2022 was a difficult year for blockchain and Web 3.0 as it was tormented by black swan events like the Terra-LUNA crash, the collapse of cryptocurrency exchange FTX and the subsequent fall from grace of its founder Sam-Bankman Fried, who was among the most lauded industry figures just a few months ago.
Traditional companies adopting Web3 could end crypto winter.
- In 2022, BLOOCK noticed a pattern in the way Web2 companies accept crypto payments and add blockchain innovations like NFTs (non-fungible tokens) to their services… This is a trend that will continue to grow as more people become aware of blockchain technology.
- The key to the next ‘crypto summer’ will be the mass adoption of Web3 elements by traditional Web2 companies. As this transition accelerates, more attention will be spent on designing interfaces and experiences that are more intuitive for the average user.
- Adoption starts with three main components: simplicity, security, and applicability. We see a trend in this direction, as well as some ‘best practice’ inheritance from Web2 services. The ability to combine what people used to do with something new is what will define future blockchain trends.
NFTs will gain more ground
- Expect more advanced revenue models for creators beyond forced royalties on secondary market transactions – especially for non-art digital assets – [and] the rise of a wider array of digital asset classes, tokenized exclusively as NFTs rather than their fungible counterparts.
- We should expect some big names from multiple industries to join this movement in the next couple of years. For example, mainstream social media platforms and AAA game studios are already experimenting with the use of NFTs.
- Natively digital economies are starting to emerge, and digital goods like NFTs will continue to evolve. Just like the internet went from flat websites to interactive cloud software, tokens will evolve from being flat digital goods to much more interactive, customized, and intelligent digital on-chain agents. We have not seen generative AI interact with Web3 meaningfully, but I suspect the technologies will find promising overlaps.
Technology innovations in the crypto market will continue to expand
It will not mean the end of the sector. Crypto markets such as DeFi and NFT (Non-Fungible Tokens) may revive when new and more stringent regulations will have been implemented. Both the Defi and NFT markets are expected to further develop with the help of innovative developments, including tackling the main security issues.
The DeFi market will further innovate
We will see more technological innovations in the DeFi market, leading to more complex and interesting applications. These may include the creation of new digital assets and online payment systems, including utility tokens, digital shares, natural asset tokens, stablecoins, etc.
Next year will also likely bring more traction for use cases like self-custody wallets, synthetic assets, and prediction markets. And Improvements in the decentralized finance (DeFi) sector like the protocol Compound’s version (v)3 and the arrival of the zero-knowledge (ZK) ecosystem continued regardless. New infrastructural developments will continue such as the arrival of decentralized perpetual exchanges and regulatory-compliant platforms that connect traditional finance (TradFi) to DeFi.
The NFT market is expected to develop further technologically and creatively.
NFTs, also known as non-fungible tokens, gained great popularity since 2021. In the past few years, there has been a lot of talk about crypto games and crypto collectibles with the advent of NFTs. With this new asset class, there has been a shift in the way these assets can be used.
Though the recent crypto turmoil will cause minor interest – for the time being – this market is expected to develop further technologically and creatively. We will see industry disruption and ideas for utility NFTs such as in-game NFTs, identity tokens, and token-gated communities. Another trend is that the NFT market – previously only on the Ethereum platform – will increasingly be conducted in different chains. There will arrive a growing number of blockchain-based platforms that allow players to trade their crypto assets on secondary markets.
With the growth of interesting applications of tokenized assets.
A new model around blockchain technology that will further emerge in 2023 and beyond is so-called asset tokenization. Tokenization thereby uses blockchain technology to turn digital or physical assets such as stocks, treasuries, or corporate bonds into digital tokens. They are becoming increasingly popular, as smart contracts automate token transactions while helping to reduce and increase transparency.
We may see the growth of interesting applications of tokenized assets such as flash loans and real estate, while we will also see a surge of start-ups focused on bringing TradFi institutions into crypto in a regulatory-compliant way. Unlike cryptocurrencies, tokening makes assets easier for other people – both retail and business users, to own that asset. It may open the present markets where trillions of dollars/euros are locked up in assets that cannot be deployed or to which there is extraordinarily limited access. Via asset tokenization, anyone can invest in assets. People no longer need to go solely to the stock or cryptocurrency market.
More blockchain innovations will enter the market.
As blockchain technology further develops we will see more innovations entering the market, including dApps, smart contracts, and new consensus mechanisms.
Firm uptake of dApps.
In 2023 we are going to witness a more massive adoption of Decentralized Applications or dApps. These are applications that run on a decentralized network and use blockchain technology to store and share data. As companies seek ways to increase efficiency and reduce costs, DApps are gaining popularity. Blockchain networks offer endless possibilities for dApps with peer-to-peer nodes and smart contracts. With dApps one can diminish censorship from centralized authorities and ensure privacy or dApps development flexibility. dApps do not experience downtime since they leverage decentralized computing and utilize open-source licenses to lease or use. dApps are also crucial to accelerating WEB 3.0 integration.
The increasing popularity of smart contracts.
Another trend we are going to see is the increasing popularity of smart contracts in a growing number of sectors. These are digital ones that are automatically executed after meeting several conditions. When certain conditions are met, agreements are instantly implemented by a blockchain allowing for proxy-free contracting without the need for intermediaries.
They are becoming increasingly popular, as smart contracts help reduce paperwork and manual processing, as well as eliminate the need for intermediaries. Due to smart contract mechanisms blockchain services are now available to companies that do not have the resources for several years of research and development of their blockchain system, allowing them to make their own self-executing contracts, protecting against unforeseen circumstances.
New consensus mechanisms entered the market.
New methods of cryptography to verify transactions are entering the blockchain space such as Proof of Stake (POS), Proof of Authority (PoA), and Zero Knowledge.
The business world needs to pay attention to these trends
Blockchain technology continues to advance, and applications of blockchain are being presented every day. Blockchain is a rapidly developing technology with new standards and delivery models and with a wide range of opportunities. For businesses, it is important to stay up to date with the latest developments in the blockchain and crypto fields. There are a number of these blockchain trends to which a business needs to pay attention to gain the maximum out of it.
These trends described in this blog will help aid companies and organizations use the technology to its full potential to improve and streamline their operations, reduce costs, increase efficiency, and boost security.
BLOOCK wishes you all a happy 2023!