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Top 10 Predictions for Cryptocurrencies and the Web3 in 2022 with Coinbase

  • Coinbase believes that in 2022 brands will see NFTs and Web3, and many Web2 companies like Facebook are already switching.
  • It also predicts an increase in the use of L1 chains on a scale similar to Avalanche and Solana as well as increased interoperability between L1 and L2 chains.

2022 is hours away and it seems to be the best year for cryptocurrencies and blockchain technology. According to Coinbase, it could be a year when we see Web3 coming of age and becoming the core of the industry. In predicting 2022, the US exchange also stated that we will see Tier 1 chains, such as Solana and Avalanche, become more common and that bridges that create interoperability between Tier 1 and Tier 2 will become mainstream.

In a blog post titled «10 Predictions for Web3 and the Crypto Economy for 2022,» Coinbase Chief Product Officer Surojit Chatterjee discussed the trends that will define the coming year.

Ethereum scaling, layer 1 and 2

The year 2022 will be defined by a rise. Blockchain networks are gaining a lot of traction and with it the number of users is increasing, be it DeFi, NFT, commerce and more. To serve these users, existing networks will need to scale quickly or risk being maintained by future networks.

Ethereum is the main character and has the largest ecosystem in the sector. You have already started your scaling route with Ethereum 2.0, and Coinbase believes this will continue. However, other Tier 1 chains like Avalanche and Solana, which are already much more scalable, will see significant growth.

Following this, Coinbase believes that tier 2 companies like Polygon will continue to grow aggressively. This will provide a great opportunity for bridges connecting L1 and L2.

And as scalability continues to advance, zero-shaped technology will gain more traction. This year, protocols like Starknet and ZkSync are very popular and this growth will only accelerate in the new year.

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As L1 chains move with increasing usage, ZK-rollup technology will attract the attention of both investors and users. We will see the emergence of new privacy-centric use cases, such as privacy-safe apps and gaming models that have privacy at their core.

DeFi goes mainstream

2022 is the year that DeFi will become mainstream, Coinbase notes. This year, we have seen DeFi ‘s massive growth in metrics such as user numbers and total value locked. The publicly traded stock market believes this will increase next year.

With this growth, DeFi protocols will adopt the regulations as they will be too big for authorities to ignore.

Decentralized identity services and KYC chain authentication services will play a crucial role in linking users’ actual identity to Defi wallet terminals.

DeFi currently controls retail investors as it is still considered to be quite risky. In 2022, more institutions will dive into DeFi waters and play a more important role. We have already seen that this started with Aave Arc, which attracted actors like the Swiss bank SEBA. The KYC on DeFi will also need to improve to attract these regulated entities.

This growth will also require insurance. In one year, DeFI platforms lost $ 10 billion to hacks and exploits. As the industry grows, consumers will need a layer of protection against these events.

NFT and Web3

Perhaps the most exciting prospect for 2022 is NFTs and Web3. This sector is already seeing billions of investments, both within the cryptocurrency community and in the broader tech industry such as Facebook. Coinbase believes this growth will continue into 2022.

NFT-based communities will compete materially with Web2 social networks, the exchange notes. Big brands are starting to dive into the world of Web3 and NFTs, and some like Adidas, Coca-Cola, Dolce & Gabbana and Charmin are already testing NFTs.

Web2 companies will try to emulate the Web3 pressure, according to Coinbase. We have seen Facebook (now Meta) announce that it will focus on this emerging sector. Microsoft is rapidly expanding its capabilities for both Web3 and metaverse, as do Google and Apple. Microsoft founder Bill Gates has already stated that he sees the metaverse hosting all of our meetings in three years.

But the entry of the Web2 giants into the world of Web3 comes with its caveat, Coinbase notes. Surojit says most of these companies will try to create centralized and closed versions of their meta-analysis in which they will continue to maintain full control.

Eventually, 2022 will be DAO 2.0 year.

More people will join DAOs, leading to a change in the definition of employment: they will never receive a formal offer letter, accept signs instead of or alongside fixed salaries, and work on multiple DAO projects at the same time same.

And with the growth of all these sectors, regulators will be forced to learn much more about their performance in order to monitor them.

Esdras Collins

Esdras Collins is an early investor in bitcoin and a veteran trader in the cryptocurrency and foreign exchange markets. He is fascinated by the complex possibilities of blockchain technology and is committed to making the subject accessible to all. His reports focus on the development of various cryptocurrency technologies.

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