IOBC: 10 Predictions for the Crypto Industry in 2023
The entire year of 2022 saw the crypto industry largely in the process of deflating bubbles, with the collapse of Terra, the bankruptcy of 3AC, and the FTX scandal... The chill of the bear market swept through almost the entire year.Author: IOBC Capital
The crypto industry was largely in a bubble-bursting process throughout 2022, with the collapse of Terra, the downfall of 3AC, and the FTX crisis… The chill of the bear market swept through almost the entire year. At the beginning of 2023, the IOBC team made the following 10 predictions for the year:
1. The Layer2 scaling sector will explode in the secondary market with the launch of major ZK Rollups on the mainnet
zkSync, StarkNet, and Scroll will focus on launching their mainnets in Q1 and Q2 of 2023. The main storyline in the crypto secondary market this year may revolve around Layer2 and related infrastructure.
2. Modular blockchain projects focusing on data availability layers in the Ethereum ecosystem will emerge
After ETH2.0, BeaconChain became the consensus and settlement layer for Ethereum, while the original Ethereum mainnet and Rollups became the execution layer. Blob will replace Calldata to take on part of the data availability for Layer2, leading to the emergence of top projects focusing on data availability layers in the Ethereum ecosystem.
3. MEV will become an important source of profit for Ethereum validators beyond block rewards after the PoW to PoS transition
During the Ethereum 1.0 era, the PoW model meant miners had costs related to mining machines and electricity, making mining a business model that aligned well with traditional industries. In the Ethereum 2.0 era, PoW transitioned to PoS, allowing mining through staking ETH. As the Ethereum ecosystem flourishes and on-chain transactions become more active, MEV will become an important source of profit for validators beyond block rewards.
Throughout 2023, the value of MEV captured through order flow acquisition at the wallet and application level will exceed 10 million USD. With increased application layer traffic and transaction volume, along with the emergence of exclusive trading pool features for smart contract wallets, MEV searchers and some MEV projects will collaborate with C-end applications to access user order books, enter private trading pools, capture potential MEV value, and return a portion of the MEV value to project parties and applications.
4. Appchain/RollApps will see the emergence of unicorn-level "fat applications"
If dYdX successfully migrates to Cosmos as an Appchain, it could spark a trend of Appchain/RollApps in the application layer.
5. The DAO sector will see new financing demonstrations similar to ICOs and yield farming
The ICO model of 2007, the liquidity mining model of DeFi in 2020, and the GameFi gold mining model of 2021 have all brought waves of financing. The Investing DAO based on Syndicate is gaining momentum, and many project parties are beginning to seek financing from Syndicate's Investing DAO, potentially leading to the emergence of new financing models in the blockchain industry within the DAO sector.
6. A "wallet war" will emerge
In 2023, the first smart contract wallet with daily active users exceeding 500,000 or wallet addresses exceeding 2 million will appear; or an MPC wallet processing over 6-8 million signatures daily. Meanwhile, throughout 2023, the losses from hacked assets in MPC and smart contract wallets will exceed 10 million USD.
As trust crises continue to arise in centralized exchanges and CeFi, and as dapps attract web2 users to crypto narratives, smart contract wallets with social login/social recovery, EVM multi-chain gas payment, and built-in DeFi yield/dex functions, or MPC wallets with a significant number of B-end users, will become the next focal points for users and traffic.
With the rise of numerous wallet projects, code security and team operational security will become major issues, leading to more than one new wallet project experiencing asset theft.
7. The first crypto game with daily active users exceeding 500,000 will emerge
In 2023, the first crypto game with daily active users exceeding 500,000, which maintains a game lifecycle of 8-12 months without a significant drop (greater than 90%) after issuing tokens, will appear.
In the realm of hardcore casual games (tower defense, card games, roguelike, SLG, etc.) combined with crypto, multiple high-quality games are expected to undergo public testing in the second and third quarters of this year, with some likely to balance game economics, token models, and game quality.
8. Vertical data analytics + AI applications or components will emerge
With the explosion of application layer gamefi, socialfi, and other xfi, the data on-chain will become richer and more vertical, leading to the emergence of specialized data analysis platforms, components, or tools. These industry data analyses at the application layer will help industry practitioners portray user profiles and analyze user behavior from a more professional perspective, extending to the entire crypto market.
9. X to earn will iterate and transform into new models
In 2022, X to earn was considered a new death spiral model, but the to earn model has cultivated user habits and stickiness to some extent, potentially replicating the transformation model of the internet based on user traffic. This type of model transformation is worth looking forward to in 2023, with new models from StepN and Axie, as well as new derivative models, being noteworthy.
10. The DeFi derivatives track will welcome a "Davis Double" moment
Wallets have credit, and credit has value. As on-chain application data becomes more abundant, analyzing user data and behavior becomes increasingly feasible. In 2023, new credit models may emerge, forming standards within a certain scope, thereby permeating the entire DeFi derivatives and other crypto applications, stimulating the DeFi derivatives track to welcome a "Davis Double" moment.
