The crypto industry is not standing still, and today we invite you to dive into five trends shaping the industry and the DeFi space in 2023 with expert opinions from Alex Filatov, CEO and co-founder of EverX.
Do NFTs have a chance for a second life? Is there potential for metaverses? Do DAOs have a future?
Alex explained the current state of acceptance and expectations in the global cryptocurrency world. Let's jump in!
More blockchain-based technologies – more regulation.
As the first trend, Alex noted increased intervention and regulation by governments, which has historically been a tendency in the industry. The recent collapse of FTX and Alameda, which still shakes the industry, further strengthens the desire for regulation in the decentralized space.
In addition, governments around the world have begun to discover the potential of blockchain technologies, namely the fact that blockchain can allow central banks to create digital currencies and use the technology in cases such as identity management and voting in order to provide greater transparency and control over the financial system, cost reduction, and other benefits.
Unlocking the potential of the Metaverse
According to Alex, the Metaverse is another emerging trend that is set to revolutionize the way we interact with the world around us. While the concept of the Metaverse has been around for a while, recent developments in blockchain technology have opened up new possibilities.
One significant advantage of using blockchain is the ability to establish ownership and transfer it securely. With blockchain, users can sell, trade, and exchange digital assets like never before, making the Metaverse more accessible and democratized.
Furthermore, decentralized finance or DeFi, which allows users to participate in financial activities without intermediaries, could be the key to unlocking the full potential of the Metaverse. However, the industry still needs to find ways to achieve sustainable economics and make it more inclusive.
As for the gaming industry, blockchain has already begun to change the landscape. Games like Axie Infinity and STEPN have already attracted millions of users to the space, introducing a new way to play games and earn money.
The integration of blockchain technology has allowed players to own in-game assets as NFTs and earn cryptocurrency for their efforts. As more games adopt this approach, the industry will continue to evolve, making the Metaverse more immersive and exciting. Nevertheless, sustainability remains a challenge that the industry needs to address for the long-term success of the Metaverse.
From hype to utility: a new NFT trend
As a fourth trend, Alex mentioned the importance of NFT utility. He pointed out that while NFTs were subject to a hype cycle earlier in 2021, their real value lies in their utility. NFTs can provide access to closed events, clubs, and more, and they bring a more robust ownership component to the table.
Additionally, they offer programmability, which is something that traditional tickets cannot provide. For example, NFT tickets can be programmed for resellability, royalties, and other rules. Famous artists can use modern marketplaces to hold concerts in the Metaverse, issuing and selling NFT tickets. There are no intermediaries, ticketing companies, or producers: it's just the artist and the user.
Moreover, corporations and brands are also starting to recognize the value of NFTs as a means to transcend intermediaries. NFTs provide corporations and brands with a chance to reach their fans more directly and offer unique experiences. Playboy, Starbucks, and soccer teams are just some of the big brands that have experimented with NFTs to varying degrees of success. As the industry develops, the utility of NFTs is expected to become more sophisticated.
A promising DAO and social token trend
Decentralized autonomous organizations (DAOs) and social tokens are emerging concepts in the blockchain space that are gaining momentum and more attention. The utility of DAOs is in their ability to move away from centralized decision-making and potential misbehavior to decentralized decision-making and consensus-driven decisions, resulting in more transparency, trust, and security.
Social tokens are also gaining traction, with big media platforms and social networks embracing them, and more experiments are taking place within DAOs and social tokens.
One example of innovation in DAOs is the idea of bound tokens, which can be used in decentralized media and are more based around DAOs. Take for instance a team working on a decentralized GitHub where you can manage and store repos code in a decentralized environment and have DAOs manage that code.
DAOs are becoming increasingly important in the blockchain space, especially in the context of the failures of centralized decision-making systems and the need for more transparent, trustworthy, and secure decision-making processes.
The rise of decentralized exchanges
The next trend for 2023 is decentralized exchanges (DEXs). Alex highlighted the rise of DEXs and how they are becoming more popular as people lose trust in centralized exchanges, especially after the collapse of FTX. However, the user interface (UI) and user experience (UX) of DEXs are still complicated compared to centralized exchanges, making them less user-friendly.
This is due to the fact that financial incentive for DEXs to improve UI/UX is limited, as they are decentralized by nature, which means they are not motivated by profit like centralized exchanges. Nevertheless, there are projects working on order book capabilities and more features to make DEXs feel more like centralized exchanges.
Alex also raised the issue of Know Your Customer (KYC) compliance, which is a big concern for centralized exchanges. Some DEXs may voluntarily introduce some sort of KYC verification to prevent money laundering and fraud. However, others may choose to remain anonymous and decentralized to avoid any jurisdictional restrictions.
Overall, the trend seems to be moving toward a more decentralized approach to trading, but there are still challenges to overcome, including UI/UX improvements, KYC compliance, and security concerns.
