2021 was quite the breakout year for crypto, with DeFi reaching nearly $240 billion USD in total value locked (TVL), $30 billion USD in crypto funding for new projects, and 200 million global users.

As we start year 2022, it’s worth looking forward to better understand and try to foresee the macro trends which will heavily impact the crypto space. In other words, I’m going to put myself out there and predict the coming year, and hopefully not embarrass myself with a poor review of my powers of prediction on January 1, 2023.

Let’s do this.

Admittedly, this is a safe prediction. As we lean into 2022, we’re welcoming the next batch of Web 3.0 users from 200 million adopters to more than 300 million. That means scalability will increasingly be a focus for the crypto sector. I’m expecting an even faster rate of adoption in alt chains, with Solana and Avalanche in particular experiencing exponential growth. Bonus prediction: we’ll have at least one Layer 1 chain explode in usage which isn’t on anyone’s radar currently. In particular, watch for two trends in 2022: easier onramps to alt chains, and easier and more accessible bridging.

Also a relatively high probability prediction. If you’ve tried to send or convert ETH in the last few weeks, you’ve probably been shocked by gas fees. While I am expecting improvements in ETH scalability, and the emergence of ETH2, I expect an explosion of Layer 2 activity.

According to Elliptic, total lost wealth due to DeFi exploits in 2021 exceeded $10 billion USD. There’s a clear need for expanded insurance services.

To be clear, DeFi insurance policies can insure various forms of risk. One example is losses caused by technical glitches, which would make this a must have for both projects as well as smart contract auditor agents. Another obvious application is exchange hacks, which result in lost principle balances. The premium paid by individuals or projects for a policy widely varies depending coverage terms, but to provide a simple example, you’d pay 0.0259 ETH to cover 1 ETH for one year against a hack on Binance on Nexus Mutual (at the time of writing).

Currently, NFTs typically provide either ownership of an in-game cosmetic benefit, a digital asset, or more likely (and logically), a fractionalized art piece ownership with an image of the original in your NFT wallet. I’m expecting NFTs which not only provide a badge, but rather an unlock for additional content.

For instance, we may see access to events governed by NFT tickets. Memberships for event based communities are already a thing, so brand-sponsored communities providing access to exclusive events is a logical next step. Another application is HR-related capabilities, where formal offer letters, are substituted with blockchain based memberships, and income for employment is governed by smart contracts. DAOs in particular seem well suited for such an application. We’ll begin to see some activity in this direction in 2022, but the NFTification/DAOification of work will likely take many years to come to fruition.

I’m on the fence about this one for sure, but I’m seeing an increase in writings around DAOs replacing VC. Clickbait or trend? I’m not sure.

If it’s not totally obvious, I’m incredibly excited for Web 3 this coming year. I also wanted to take a moment to thank our community, our team, and our partners for an amazing coming out year in 2021. The best is yet to come.

Wagmi.

— eric