Interview Transcript: What Will Crypto Tycoons Focus on in 2022?

Written by: Mario Gabriele, The Generalist

Translated by: Block unicorn

Original Title: “What to Watch for in Cryptocurrency in 2022?”

Here are the most exciting cryptocurrency trends that investors, operators, and founders should be aware of in 2022:

1) Sovereign data could change the internet. Projects like Ceramic allow users to carry their data across the internet. Two contributors emphasized this open-source protocol, describing how it changes the way we build and interact with on-chain applications.

2) Music NFTs are on the verge of a breakthrough. If 2021 saw a surge in profile picture NFTs, 2022 may elevate music NFTs. Musicians, fans, and vertical NFT markets like Catalog stand to benefit greatly.

3) DAOs can solve problems. DAOs can do more than just bid on the U.S. Constitution; they may be the way to develop the next life-saving drug. VitaDAO, dedicated to longevity research, may prove to be a pioneer of the nascent "DeSci" movement.

4) The infrastructure phase is accelerating. Existing infrastructure has struggled to keep up with the increasing adoption of cryptocurrency. Better tracks are needed to unlock the next phase of growth. In this regard, Pocket Network may prove essential. Multi-chain protocols facilitate decentralized cloud computing around the world.

5) Wallets are going beyond transactions. Existing crypto wallets (like MetaMask) have been built to handle and track transactions. However, wallets are increasingly becoming places to track digital goods and experiences—extensions of identity that could benefit newcomers like Genesis.

DeSci Explained: Making the entire process of decentralized or scientific innovation—from publishing to funding—more open, visible, and frictionless.

I believe it was February 2021 when I first heard the word "Solana," though I can’t quite recall the context—whether it was a conversation or a skimmed article. If I dig deeper, I might understand what Solana is, why it’s interesting, and what the actual cost of a token is. I might have discovered it was a new layer 1 protocol designed for massive speed, supported by some of the smartest builders and investors, with a price around $6.50.

The next time I heard about Solana was in late May when David Rosenthal from Acquired shared what he had learned and why it was so compelling while we were walking in San Francisco. That was enough to pique my interest, but unfortunately not enough to make me bet on it. At that time, Solana was trading at around $27.

In August, I published a trilogy on the cryptocurrency exchange FTX. As part of it, I spoke with some early adopters of Solana, including Sam Bankman-Fried and Kyle Samani, and Sol’s price had reached $33.

Two weeks later, my friend Packy McCormick published his article about the protocol. I finally bought my first Solana token at $70 and made regular purchases.

The reason I share this anecdote is not to indicate that I’m an idiot. (Though, in this case, I might be.) More importantly, it illustrates how many times we can discuss a topic before it truly begins to take off. Even when it comes from people you admire and respect, it can take a long time to break through the noise.

Today’s article attempts to shorten that process for all of us. I didn’t wait for the most exciting crypto projects and trends of the year to happen; instead, I asked some of the most thoughtful people I know to share what they are watching. Additionally, I asked them to explain what makes them excited about their choices to help us move beyond mere recognition.

While this is not investment advice—if you want to prove the volatility of this industry, just look back at the pullbacks of the past few days—by the end of today’s article, I hope you’ll understand what’s worth watching this year.

Matt Shapiro, Partner at Multcoin Capital

Building Infrastructure with Crypto Incentives

Cryptocurrency is beginning to touch the real world in interesting ways. The technological foundation of cryptocurrency is advanced enough that entrepreneurs outside of crypto with deep domain knowledge and expertise are realizing they can leverage it to disrupt existing businesses or fundamentally change or break the rules of traditional industries. The best example to date is Helium, which is facilitating the construction of real-world infrastructure using crypto-economic incentives, thereby disrupting wireless networks.

Render Network is another exciting example that represents the fusion of digital rendering and crypto. 3D objects and realistic graphics in film and video are computationally intensive. With the emergence of the metaverse, there’s a need to create and render these virtual environments, along with millions of avatars and NFT accessories to fill digital spaces. It will require countless hours of dedicated GPU time to make the metaverse possible.

Crypto-economic incentives are well-suited to attract potential assets without marginal costs, enabling mass production through new markets. Render Network is doing just that, leveraging the global potential of GPUs. Additionally, as Ethereum transitions to a proof-of-stake consensus mechanism, we expect a complete GPU market to be available for rendering images and videos.

But the market is a two-way street. Simply organizing the supply side won’t work without demand. Render Network has a unique advantage due to its relationship with Otoy. The company has been at the forefront of rendering software for over a decade. Today, their flagship software solution, Octane Render, is widely regarded as a top-tier GPU rendering solution. It is used by major film studios, including Disney, and tens of thousands of digital artists, including Beeple. Otoy provides Render Network with an embedded user base that is currently engaged in rendering work elsewhere, including Amazon and Nvidia.

RNDR is a forgotten 2017 token that is undergoing significant updates. The token design is being revamped to include staking and governance features. Render Network is migrating to Solana to improve speed and execution and is integrating with Metaplex. Other major rendering software solutions, such as Redshift, have also joined the Render Network.

For these reasons, Render Network is positioned as a core part of the infrastructure connecting web3 and the metaverse.

Structured Products

As DeFi evolves, I have been keeping an eye on structured products. With new capital entering the space to offset borrower demand, DeFi yields have broadly declined. But the influx of new capital has not slowed down. With traditional asset management firms joining, they are increasing their presence, hoping to capitalize on inefficiencies and arbitrage opportunities.

As more capital continuously flows into the search for yield and derivatives protocols, structured products are in an interesting position. For example, covered call strategies are well-established in traditional finance but are often too complex for most retail investors to understand and execute quickly. The programmability of crypto eliminates this complexity, making it very simple for long-term holders to generate asset yield by writing covered calls (one-click).

This part of the market is rapidly evolving and gaining impressive traction. This includes structured product protocols like Ribbon and StakeDAO on Ethereum, as well as Katana and Exotic on Solana. The demand for these products also benefits underlying options protocols, such as Opyn and Hegic on Ethereum, and Zeta and PsyOptions on Solana. It’s still in the early stages, but this is a space worth watching in DeFi.

Li Jin, Co-founder of Variant

Universal Basic Capital for DAOs

Crypto will become a testing ground for ambitious economic and social experiments that can create a more equitable internet than what exists in the web2 world.

In recent decades, income inequality has been exacerbated in most developed countries. The concept of Universal Basic Capital (UBC) or Universal Basic Wealth addresses structural inequality by granting people ownership of appreciating assets. Examples include Alaska's Permanent Fund, which pays dividends from the state's oil revenue, and Singapore's Central Provident Fund. The advantage of UBC over simple income redistribution is that basic capital can serve as a safety net, enhance bargaining power, empower individuals to take entrepreneurial risks, and alleviate financial anxiety.

As economists, executives, and political leaders debate how to implement UBC on a larger scale, DAOs are ready to experiment here. According to statistics from DeepDAO, as of December 2021, the total assets under management (AUM) of DAOs listed on the platform amounted to $16 billion, up from $400 million in January. A portion of these treasury funds could be designated for the DAO's member base and invested over time to earn returns. Members could then use these accounts for retirement, education, healthcare, or startup capital. The responses here include examples of DAOs attempting to create a form of basic income or basic capital, including Worldcoin, $UBI, Impact Market, and smaller experiments like FWB's artist residency grants or SuperHi's creative basic income.

Cryptocurrency provides us with a toolkit to build new economies and societies. With that comes the opportunity to ask how we want these economies to operate and what kind of society we can create. I’m excited to see DAOs considering token design and financial strategies not only from the perspective of short-term user acquisition or engagement but also as a foundation for a new, fairer world.

Aaron Wright, Co-founder of Tribute Labs and LAO

The Great Convergence

In 2021, we saw the emergence of web3, thanks to three overlapping core trends: DeFi, NFTs, and social tokens— all stitched together with the soft tissue of DAOs.

In 2022, things will start to get weird. These three categories will continue to grow and intermingle. DeFi will enter NFTs in terms of lending and collateral. NFTs will flirt with DeFi mechanisms. NFTs will bend into membership cards and social communities, with social tokens serving as incentives within those communities.

DAOs and DAO networks will continue to thrive, supporting artists, creators, and novel financial products. They will enable more open-source tools, IP collections, and an increasing number of public goods. Tools (especially DAO tools, bridges, zk-tech, messaging, privacy, and storage) will improve and begin to mature, unlocking more ways for people to collaborate in emerging multiplayer game modes.

Millions (if not more) will join cryptocurrency through NFTs, opening up new categories of collectors. NFTs will no longer be limited to PFPs, game items, virtual worlds, and digital art. They will begin to engulf other forms of media (without obvious headwinds), such as fashion and music.

Who knows what will happen to prices, but if the web3 ecosystem can attract more capital, the wealth generated will increasingly be used to tackle harder problems, such as decentralized science and climate change.

Annika Lewis, Gitcoin Grants Project Lead

Ceramic

Data is everything. It is a valuable asset in itself, evidenced by the rise of companies like Facebook and Google. Both companies have become some of the most profitable in the world due to the data they obtain from billions of users.

A macro shift in data ownership and value capture is underway. Web3 brings what I call "data de-platforming"—that is, the decoupling of the application layer from the data layer. These parts are often fused under the ownership of a single entity. Data de-platforming will enable user-controlled data storage: a paradigm shift for users and developers.

No one is better positioned than Ceramic to embrace this radical shift. Ceramic is an open-source protocol for decentralized applications that is building the data rails of web3. For developers, it allows them to build applications without the long-required underlying trusted centralized database servers. Ceramic breaks down data silos for end-users, enabling them to transfer data across platforms. In doing so, it hands data control back to users.

Ceramic is rapidly gaining adoption, with notable projects already built on the protocol. With an incredible team and a vast problem space blank canvas, Ceramic is one to watch in 2022.

Ken Deeter, Partner at Electric Capital

Multi-chain and 2.0

Last year, the multi-chain narrative underwent a significant shift. Ethereum's virtual machine (EVM) compatibility on the Ethereum mainnet and high transaction costs allowed competing chains to attract applications and users. However, most of the activity I observed was copy-paste activity—forks and imitations of successful Ethereum projects, along with aggressive liquidity incentives.

In the long run, successful competing chains will attract new types of applications that are priced out of Ethereum and leverage the unique architectural advantages of different chains. We are beginning to see examples of games and NFT markets developed natively outside of the Ethereum mainnet, but this space is just getting started.

Revival of DeFi Token Economics

Liquidity owned by protocols, voting locks, bonds, curve wars— the DeFi ecosystem has seen rapid innovation around the economic design of governance tokens. A best practices set for these protocols is quickly evolving. With these more favorable designs and incentives, new protocols can rapidly gain market share. Early DeFi projects are reassessing and reconstructing their core economics based on recent innovations. Communities are being disrupted and reconfigured. Over the next year, I expect to see a clear distinction between protocols that can adapt and integrate these new mechanisms and those that remain stuck in old ways.

Gaby Goldberg, Investor at TCG Crypto

Wallets as Identity

Wallets in 2022 will not be crypto wallets. They will be native web3 wallets—built for identity, navigation, personalization, and media.

So far, all wallets have been built and designed around transactions. Many wallets have been in use for over three years, created for buying, trading, and holding tokens. Since then, as the ecosystem has continued to expand, the use cases for wallets have evolved. As we enter web3—a more social, open, and interoperable internet—we see an increasing demand for wallets as places to store NFTs (see Rainbow or Coinbase Wallet) and multimedia experiences (see Glass, Sound, and Altered State Machine). In short, wallets are becoming places where people want to spend their time. Existing wallets will not (and frankly cannot) adapt to this new behavioral preference.

When we consider how this ecosystem-wide shift might occur, we can look at the factors that drove user adoption of wallets that previously achieved scale. As a case study, MetaMask had 545,000 monthly active users (MAU) in July 2020. By August 2021, that metric surged to over 10 million, driven by the excitement around "DeFi Summer," where yield farming acted as a consumer draw. At that time, using MetaMask to access DeFi yields was an obvious choice, as MetaMask was more accessible than its competitors (widely supported).

We can draw parallels between this example and today’s web3 ecosystem. The supply of NFT projects, new yield farming opportunities, and social web3 platforms are at historical highs and continue to grow. Traditional wallets will initially consume this new demand. But as the variety of applications, use cases, and behaviors expands, users (and developers) will need more integrated wallets that support leveraging on-chain sources and transferring your digital identity across applications and chains. For these reasons, I am excited about wallets like Genesis, Bitski, and Sudo.

My talented friend and investing partner Jay Drain put it best: "Right now, crypto wallets look a lot like inventory… in the future, they will represent our digital identities more clearly by making them composable on the web." I recommend checking out his full work here.

John O'Connell, Investor at True Ventures

Stader Labs

One project I’m excited about is Stader Labs. Stader is building the "Amazon of Staking"—allowing users to easily stake their cryptocurrencies and earn passive income through various strategies based on user preferences.

Stader launched on Terra, allowing users to automatically compound their LUNA staking rewards to maximize returns while distributing their assets across various validators to encourage further decentralization of the entire Terra blockchain. Stader also launched LunaX, a liquid staking derivative of LUNA that allows users to interact with other DeFi applications within the Terra ecosystem.

Today, Stader manages approximately 6.1 million LUNA across different strategies (worth about $490 million at the time of writing). In the future, Stader plans to launch similar products on other blockchains, including Solana and Ethereum. They will also introduce advanced strategies to further enhance their platform's role for their evolving community (disclosure: True Ventures is an investor in Stader).

Altered State Machine

Another project that excites me is Altered State Machine (ASM), which is building a protocol to add enhanced AI capabilities to NFT projects. ASM recently launched a project called "Brains." NFTs are unique AIs that can be trained and used in different ways.

For example, ASM launched the Artificial Intelligence Football Association (AIFA). Holders can use their brains to participate in AIFA's monetized video games with special "All-Star" characters. As the brains are used in games like this, the skills and abilities they develop make them more useful in the future. Users can also passively train them using ASM's simulation modeling technology.

In the future, Brains will be usable in other DeFi, gaming, and crypto environments. Holders will even be able to combine Brains to mint NFTs, bringing newcomers into the ecosystem (disclosure: True Ventures is an investor in ASM).

Andy Weissman, GP at USV

Digital Fashion

I’m very curious about what will happen in the evolving world of digital fashion. Digital identity is clearly important—4.5 billion social media consumers are already using digital identities and avatars. As Dani Loftus, founder of the digital studio Draup, writes:

The roles that make up your identity foundation are not curated from your physical life but are created entirely digitally, giving you the opportunity to express yourself in new ways.

What new forms of self-expression will emerge? What new tools and platforms will be invented for emerging designers? What new ways of wearing, sharing, selling, and distributing will arise? What happens when you mix these concepts with the core principles of web3—composability and transferability?

I’m looking at some names: Dani Loftus, UNXD, DressX, The Fabricant, Artisans, Charli Cohen, RED DAO, and XXXXTH (note: some of these notable individuals are my friends!).

Jackson Dahl, Resident Entrepreneur at Paradigm

The Rise of Pseudonyms

I’m excited to see more people exploring and building pseudonymous tools, especially in the context of web3. While the internet has been dominated by real-name identities for the past decade, I believe we are entering a new phase where pseudonyms will become prevalent across many media, if not dominant. Notably, while pseudonyms exist for privacy and security reasons (which Balaji Srinivasan has discussed extensively), there are also significant implications for social dynamics, identity expression, culture, celebrity, and more. Perhaps most importantly, pseudonyms allow identity to be contextual rather than fixed. In this regard, unlike anonymity, pseudonyms represent a range and broad design space.

Last year, there was an increase in anonymous influencers in the gaming and crypto space, from well-known creators (Dream, Corpse Husband, CodeMiko) to more niche but engaged thought leaders based on NFTs (Gmoney, Punk 6529, 4156). There are also examples in art and fashion. We will see more people joining this cadre; people will use multiple identities, just as some identities will be composed of multiple individuals. We have already seen large-scale pseudonymity on platforms like Reddit, Discord, Tumblr, and even parts of Twitter and Instagram.

This trend does not have a clear connection to web3. But NFT identities, on-chain reputation, decentralization, and composability are crucial to its development. As we spend more of our lives in digital spaces, I hope flexible identities become a significant factor in shaping an ideal future, just like digital currencies and property rights.

Richard Chen, GP at 1confirmation

Vertical NFT Markets

OpenSea is the biggest winner in our portfolio. While it will continue to be a generational company and the dominant secondary market for NFTs, I believe specific vertical markets will open up niche markets with better UI/UX, search, and discovery features. SuperRare is a successful example of high-end 1/1 crypto art, but there will be other examples in categories like photography (Sloika), the metaverse (Metahood), and music (Catalog).

I will particularly highlight music NFTs, which is surprising since music NFTs have not yet exploded like other categories such as fine art, collectibles, and gaming, but I feel collectors' tastes are rapidly changing. The leading music NFT market, Catalog, had a breakout month in October, with trading volume charts reminiscent of what I saw before the explosion of crypto art on SuperRare in early 2020. For music, it’s a question of when, not if.

Tina He, Co-founder of 0xStation

The Birth of New "Cities"

In 2022, we will re-examine the relationship between our identities, contributions, and connections on the internet. The most interesting assets are those that can create an environment that enhances our understanding of new selves.

For a while now, psychological undercurrents have been converging on this point. Both web2 and web3 startups are riding the waves from different directions and vehicles. Both believe that the democratization of tools enables mass consumers to participate in economic activities once controlled by a few institutions or companies.

Reality is becoming increasingly diverse and transcendent. The rhetoric of "everyone is an investor" has spawned two companies making big bets; Party Round and Syndicate are two expressions of the same belief. For some newcomers, the identity of being an "investor" must be achieved through "contribution"—whether rising through the ranks in mirror writing competitions to become thought leaders or discovering tactical niches of knowledge compounding. Those who invest together gather to discuss more investments, cultivating fertile ground for new social interactions around shared ownership of assets.

The rhetoric of "software is eating the world" continues to play out at scale in web2. For most web2 companies, coherent, smooth, and delightful user experiences abstract the legal pipelines and institutional adjustments completed by SLA, laborious data digitization, and standardization. For web3 companies, these institutions are being created as entirely new entities and rapidly gaining legitimacy. The former will vie for consumer attention, while the latter will strive to establish legitimacy barriers and invite a new working class to help them get there.

The most exciting trend in 2022 will be witnessing how this many-cities story unfolds—nurturing new workers, citizens, leaders, and layers of infrastructure.

Cooper Turley, Full-time DAO

Music NFTs

Ranging from independent artists like Daniel Allan and Haleek Maul to Nas and 3LAU. Artists are fully tagging audio files, providing fans with a way to collect their favorite songs or records. Here are some market leaders:

1) Catalog. As the premier 1/1 music NFT market, Catalog is the first major platform to tag audio files by building on Zora. It features various well-known artists, emerging performers, and Genesis records. To date, Catalog has sold over $2 million in records, becoming a cornerstone of the music NFT movement.

2) Sound. Hosting listening parties has never been so satisfying. Sound allows musicians to share new music by releasing a set of numbered NFTs, enabling listeners to support their favorite artists. Early versions are considered more valuable than later ones, incentivizing discovery. So far, Sound has hosted twenty-nine sold-out listening events, all ending within the first minute of going live. As the secondary market continues to develop, Sound is worth keeping an eye on.

3) Royal. Earlier this week, Royal launched its first product, allowing fans to collect NFTs by directly claiming royalties. By enabling credit card transactions, Royal seems to attract many non-crypto natives—40% of participants joined through this method. For newcomers to web3, Royal offers a promising solution.

In addition to music NFTs, the space also includes an increasing number of record labels, agencies, and collectives gathering to collect music. Whether you are a fan, degen, or artist, there is something for everyone.

Hanel Baveja, Investor at USV

The Emergence of DeSci

Reimagining the structures that make drug development opaque and misaligned today may require a completely orthogonal, non-obvious perspective: DeSci.

DeSci makes the entire process of decentralized or scientific innovation—from publishing to funding—more open, visible, and frictionless. It broadens the idea of how to become a new stakeholder in scientific intellectual property and aggregates resources—human and capital—in new ways through DAOs and other web3 structures, bringing more new intellectual property to the world. Perhaps the most radical vision of DeSci is to empower a new and larger group of stakeholders—patients, researchers, and enthusiasts—with positive market effects, thus providing cheaper and better products for everyone.

There are already several interesting projects in DeSci, including Molecule, VitaDAO, and others. For this emerging category, I have more questions than answers, which makes me even more excited about what’s to come.

Alexis Ohanian, Founder of 776

Bored Ape Yacht Club

As an early holder of apes, I am biased, and I have converted many people from my old co-founder Garry to my own wife (I bought her one as a gift), but I believe we will see more from BAYC in 2022 that resets our expectations of NFTs x Culture.

Maria Shen, Partner at Electric Capital

DAOs as New Sub-sectors

The internet has eliminated geographical boundaries, allowing communities to form around any interest, no matter how niche. Crypto unlocks the ability for anyone to create coordinated systems at scale.

DAOs leverage both internet and crypto technologies, enabling tribes of strangers to pool resources for a common purpose. With DAOs, people can now pool resources and decide how to handle those resources through governance processes. The creation of DAOs is growing exponentially—from a trickle of one or two new DAOs daily to a flood. The largest DAOs control treasuries worth billions of dollars, issuing grants and employing large teams. In contrast, the smallest DAOs can be a group of friends pooling resources to buy NFTs.

DAOs provide jobs, donate to charities, fund initiatives, contribute to political campaigns, and throw grand parties. In the future, we may have as many DAOs as subreddits—except these organizations will be able to direct resources toward the ideals they care about.

David Phelps, Co-founder of Ecodao

Ceramic

If you were a scholar in the years before the printing press, you were likely also a sailor—spending most of your time neither reading nor lecturing, but traveling between libraries to learn and copy books. You moved, but the books did not. Of course, the printing press changed all that: books could move, so you didn’t have to, and centuries of revolutions followed. But for all the technological advances, in today’s internet, we are mostly pre-printing presses. We cannot transfer the people we care about, the types of media we enjoy, the reputations we build, and our audiences—our data—from platform to platform. Like scholars, we spend time moving between platforms; the media on those platforms does not.

What if our data were transferable? We should at least see four significant social consequences:

1. People could track the impact of creative works shared, used, and monetized across the farthest reaches of the internet.

2. People would share more data with platforms to improve performance and recommendations, as it could enhance their experience across the network.

3. People would be incentivized to contribute to public datasets, which would generate better analytics and social graphs for platforms to innovate upon. AI could leverage this information to automate many of our daily online tasks.

4. Platforms would compete to allow users to transfer their data and audiences from one place to another.

In other words, data portability represents a massive social shift of power from platforms to users. Or more precisely, data portability shifts power from platforms to protocols, as users can only manage and transfer their data on standardized, verified, and streamed universal rails. Platforms must build on universal data rails to leverage each other's content and audiences. Nevertheless, as Joel Monegro suggested a few years ago, as users transfer their tokens, NFTs, content, followers, and reputations from one to another, they also lose their moats. Meanwhile, the moats of data protocols become thicker as they allow users to port their data first.

This behavior is what Ceramic achieves in developing a data streaming blockchain, allowing us to own our data. This means we can monetize our data, set automatic commissions when anyone uses it, and earn rewards from competing for our platform. In this regard, we can also track and prove the impact of creative work: imagine writing a song and not only getting paid when others play it at events but also allowing others to remix it without permission, with revenue streams flowing back to you while collecting data on its usage that you can use to seek career opportunities and connect with others who have similar tastes. In web3, our ability to manage data will enable us to manage our entire lives online. NFTs are just the front end of how we are viewed as data in the metaverse.

If the 2010s were the decade of distributed ledger technology (DLT) enabling sovereign finance, the 2020s will be the decade of providing all types of sovereign data. We can return to our ancient scholars, wandering between libraries, futilely pursuing sharing and translating each other's texts so that libraries might eventually resemble one another. In the less poetically rich web3 data stack, Arweave is akin to a library, hosting books, while protocols like The Graph and Kyve act as librarians, helping index and query the books we need.

But Ceramic is unique, not only because it provides universal rails for platforms but also because it first enables us to write books in libraries. Providing tools to own and manage our data motivates us to collect and create even new types of data that we may not have imagined. That’s the immense potential. Not only can we own our data online as individuals, but we can also be rewarded for sharing and collectivizing it in new public social structures we have yet to fully conceive.

Chase Chapman, Co-founder of Decentology

Token-weighted Voting

As DAOs become one of the de facto structures in web3, with significant funds and millions of members, the risks of getting things right are much higher. All of this makes organizational design failures in DAOs a considerable risk.

Token-based governance is a well-documented organizational design failure. Not only can tokens be purchased and used to manipulate votes, but token-based voting systems do not account for areas of expertise. For example, individuals with marketing expertise should have more power in marketing decisions. This failure leads to the dilution of expert knowledge.

In 2022, I expect to see significant experiments in governance, slowly shifting from token-based voting to mechanisms that allocate governance power based on merit, context required for decision-making, and expertise. As the importance of tokens for governance diminishes, DAOs will be forced to ask themselves what the intrinsic value of their tokens is, which may be a compelling function to explore new mechanisms that grant tokens value beyond governance power.

Brian Flynn, Co-founder of Rabbit Hole

0xStation

If we are playing a great online game, the next level of the game is to exchange "social scores" for "contribution scores." I believe 0xStation will play a key role in this transition. The project is building infrastructure to connect talent with the right projects in web3, helping members of the new economy work and play. As these individuals grow and engage, their achievements will be displayed on the blockchain, creating a log of skills and abilities. Over time, I expect on-chain reputation to replace social status on sites like Twitter, better showcasing the value of specific individuals and the work they have completed, making 0xStation a place to watch.

Julia Lipton, Founder of Awesome People Ventures

Syndicate

I continue to be optimistic about DAOs; it’s still early, but it’s clear that DAOs will unlock new types of organizations, projects, and investments that were previously impossible.

A key player in this space is Syndicate. They make it incredibly easy to create investment groups. Communities form overnight to invest in NFTs, DeFi projects, or even startups. Want to buy a hundred crypto collectibles or run a DeFi investment fund? Interested in angel investing with your friends? Syndicate might be your best bet.

Building traditional investment funds is both expensive and labor-intensive, and legally complex. Syndicate allows projects, friends, and trustless communities to coordinate funding for investments almost instantly. We will continue to see new ways to coordinate labor and capital in 2022, and I’m excited to see what happens next.

Fiona O'Donnell-McCarthy, Investor at True Ventures

JellyFi

I’m excited to introduce two projects with incredible female co-founders, the first being JellyFi, which provides a simple source of liquidity for other DeFi projects. Unlike the typical over-collateralized loans we see today in DeFi, they offer under-collateralized loans.

Their clients are audited institutional borrowers (DAOs, dApps, and DeFi protocols) who use liquidity like revolving credit lines. This structure allows lenders to achieve higher returns than over-collateralized DeFi lending platforms.

This excites me because it provides a more accessible and efficient form of credit for the ecosystem. As high-potential DeFi projects experience growing pains or need to withstand temporary setbacks, this will become increasingly important.

JellyFi was founded by four ConsenSys alumni, including Charlotte Eli, who worked on decentralized derivatives trading platforms during her time at ConsenSys (disclosure: True Ventures is an investor in JellyFi).

Dematerialized

While cryptocurrency is currently male-dominated, many female-led projects are capturing our attention and imagination. Dematerialized is the Net-a-Porter of the Metaverse. They curate and launch digital and "phygital" fashion in collaboration with existing fashion brands and web3 artists. I purchased my first phygital garment (boots with a 3D NFT) from The Dematerialized in 2021. The boots are definitely cooler than I am.

In addition to the otherworldly merchandise, I love two key points about this project: its mission to address waste in the fashion industry by shifting consumption to digital platforms, and its commitment to attracting and guiding new users to use cryptocurrency through familiar user experiences.

DAOs Focused on Gender Diversity

The promise of blockchain technology is decentralization and dismantling traditional power structures, yet we still see significant gender disparities in the web3 world. HER DAO is a collective of developers made up of women, transgender, and non-binary individuals. Their mission is to increase representation in the field and ensure diverse perspectives are included when building revolutionary web3 products. One of HER DAO's many initiatives includes providing scholarships for self-identifying women to attend major conferences like ETH Denver.

Boys Club focuses on supporting women and non-binary individuals at any stage of their journey from crypto curiosity to full immersion, transitioning from clubs to DAOs. I’m impressed by their ability to draw people into the space and encourage senior web2 talent to consider careers in web3, and I highly recommend you join their Discord or follow them on social media (Instagram and TikTok).