Here are 9 trends for Web3 in 2023

9 Hidden Web3 Trends To Watch In 2023

Original article by Max Yampolsky

Deep Tide Tech  Flow

Crypto and   DeFi  Deep in a bear market in 2022, but the Web3 side of demand is just beginning to gain traction. Over the past 12 months, Web3-related searches have remained at 30% compared to their peak in late 2021. Within, the next uptrend may be coming.

Below, I've listed 9 Web3 trends that are currently gaining momentum and will be part of industry growth in 2023.

1. Social DeFi

Cryptocurrency is, by its nature, anonymous, but that doesn't mean it should be antisocial. Since the early days of the Internet, people have been using nicknames to identify themselves online. Similarly, in Web3, 0  x... Addresses are used to identify cryptocurrency wallets.

But addresses are often long, complex strings of letters and numbers that humans struggle to remember and associate with a particular person or company.

This primitive 0 % nbsp; x... The lack of a social connection between an address and a person's identity on the Internet has led to decentralized finance. (DeFi) the development of a new branch called "Social DeFi".

Social DeFi refers to a range of apps and platforms designed to make it easier for people to connect and interact using cryptocurrencies.

Some of the key features of Social DeFi include:

Personalized 0  x addresses: like DeBank and   ENS  Such an application allows users to send their 0  x address personalization, into more easily read things, such as user names. This makes it easier for people to identify and remember each other's wallets.

Messaging Wallet Owner + Wallet Follow: Apps like DeBank allow users to message wallet owners, or follow specific wallets, and get notified about their activities. In my opinion, this is a killer feature that could open up a whole new world of social transactions.

Dapp Notifications: In addition, B2B solutions have emerged, such as Notifi, which allows cryptocurrency projects to enable notifications for users of their DApps.

Social streams and communities: Platforms like DeBank provide social feedback and communities related to a particular wallet or item. These platforms allow users to keep up to date with DeFi space developments and connect with like-minded people.

DAO  Aggregators: Apps like Zapper make it easier for users to discover and participate in decentralized autonomous organizations (DAOs), decentralized, blockchain-based organizations that allow users to come together and make collective decisions about allocating funds or resources.

User name =NFT?

Telegram  Recently launched Fragment, a marketplace for buying and selling Telegram usernames and virtual phone numbers.

This creates a whole new market for all social media account owners. Instead of being a relatively meaningless thing you set up and forget, your username becomes a valuable asset, unique, just like the NFT. While it's still relatively illiquid, platforms like Fragment make it easy to cash in.

At present, the fragments provide Telegram user name only, but looking to the future, you can already see all sorts of things where transactions: from the main social networking sites such as Twitter/sets/Snapchat to world of warcraft server nicknames, the role of and perhaps even license plates.

Elon Musk recently announced that Twitter plans to delete 1.5 billion inactive accounts in order to free up usernames. This "cleaning up" will free up a large number of valuable "NFT" on the platform and create an opportunity to snatch up some attractive usernames in the hope of reselling them later for a handsome profit.

Other Web2 social applications that adopt Web3

Twitter was one of the first major social media platforms to incorporate NFT-focused Web3 features. In early 2022, they added NFT to the profile picture of all Twitter Blue paying subscribers. In the last update, in October 2022, the developers added the ability for users to trade NFT directly from tweets.

Twitter launched an in-house Web3 development department back in November 2021, and with Binance's recent offer to Twitter  Investment   $500 million in anticipation of more Web3 functionality being integrated into the application.

Instagram is expected to follow suit, as the platform is owned by Meta, a company that has recently turned to building products for the meta-universe. Instagram already allows users to cast and sell NFT directly through the app, with more features coming in 2023.

2023   SocialDeFi Globalization?

Overall, social DeFi has the potential to bring people together in a way that has never been done before and create new opportunities for collaboration and innovation in the cryptocurrency space.

The number of unique active wallets interacting with social dApps increased by more than 1,250 percent in 2022, and it is expected to continue to increase in 2023 as the demand for Web3 identities increases.

2. DeFi/ cryptocurrency risk insurance

Investing in DeFi and cryptocurrencies can generate excess returns, but it also comes with inherent risks such as hacks, vulnerabilities, Rugs, and scams. Many investors are turning to insurance to mitigate these risks and protect their assets, especially LUNA and   in 2022; FTX  After the event.

With platforms such as Insurace.io, Nexusmutual.io, or Neptunemutual, you can insure your wallet against any protocol-specific hacks in DeFi, stablecoin decoupling, or centralised trading platform failures, for around 0.2-0.9%. / month, depending on the product type.

Key Facts:

DeFi and cryptocurrency risk insurance provide protection against DEFI-related risks, such as protocol-specific hacks, stablecoin decoupling, and CEX bankruptcies.

Premiums for these insurance products range from 0.2 to 0.9% per month, depending on the type of product.

These insurance products are currently covered for between 10 and 90 days.

Protection is currently limited and most products are sold out.

From the above points we can see that the cryptocurrency insurance segment is still in its infancy and has a lot to improve: liquidity, capital efficiency, product availability and cost, all of which are expected to see more progress in 2023.

2023 DeFi/ Cryptocurrency Insurance forecast

In 2023, we can expect more liquidity to flow into DeFi and cryptocurrency risk insurance products as traditional investors seek additional protection for their assets.

Web3 insurance can provide protection against the risks inherent in investing in decentralized finance (DeFi) and cryptocurrencies. Demand for risk insurance products is expected to increase as traditional investors continue to embrace DeFi and cryptocurrencies.

3.NFT liquidity facility

NFT liquidity is a perennial problem in the Web3 world. These assets are notoriously illiquid, making it difficult for owners to convert them into cash.

However, some protocols, such as Sudoswap, attempt to solve this problem by creating pools where NFT can be bought and sold instantly. This will allow users to easily swap their NFT for something more liquid if they want to.

OpenSea  And   Uniswap  Acquired NFT aggregator services gem.xyz and Genie, respectively, which plan to leverage Sudoswap's liquidity to facilitate NFT transactions. Efforts to "make it easier to buy and sell NFT's" could increase liquidity in the NFT market and make it more attractive to investors and collectors. Overall, developing mobility solutions for NFTs is an important opportunity in Web3.

What's next for NFT liquidity Facility in 2023?

The liquidity facility will stabilize the NFT market in 2023 and ultimately create a better Web3 infrastructure for users and investors. Markets will become more liquid and NFT prices more predictable.

4.DEX  Advanced trading tools

One of the major barriers to widespread adoption of decentralized trading platforms (DEXs) is the need for advanced trading tools, such as stop-loss capabilities. Several protocols are working to address this problem. Is an example.

In addition to the lack of stop-loss functionality, liquidity and slip/lead trading have also been issues for traders on DEXs.

To address these challenges, platforms like Hashflow are innovating the DEX liquidity model by incorporating market makers and allowing them to generate liquidity. The aim of these efforts is to minimise slippage so that it is close to zero, or at least comparable to a centralized trading platform (CEX).

In general, developing advanced DEX trading tools is an important trend in the Web3 world, as it will help make DEX more user friendly and competitive with CEX.

The upcoming DEX upgrade in 2023

After the collapse of the centralized FTX, other centralized trading platforms saw significant outflows in favor of decentralized trading platforms. Since one of the ongoing Web3 trends is the growing wave of new DeFi users, it is of utmost importance for DEX to keep improving their UI/UX and their various advanced trading tools.

5.  The rise of M2E applications

Move-to-earn, a trend of rewarding users for fitness with cryptocurrencies, non-fungible tokens or points, is expected to continue until 2023.

This innovative form of exercise caught the eye of Olympic athlete Usain Bolt, who teamed up with the recently launched Step App, which allows users to earn NFT and cryptocurrency through physical activity. Sports money-making apps are on the rise in popularity, offering people a new and attractive way to earn rewards while staying active.

Other applications with similar mechanisms

More fitness Web3 apps use similar mechanisms, combining NFT, cryptocurrency, GPS and   GameFi  Technology. For example:

Dance money programs like Rapty.app and Dansa.

MetaGym and other exercise-track-money-making apps.

Bike money making programs like BikeN and BikeRush.

... Any other sport you can think of probably has a Web3 application for it.

Forecast for 2023

The inflow of new users may be in the leading M  2  E has slowed down on applications. But expect to see faster growth again as spring comes and activity picks up.

6. NFT from mainstream brands

As a new type of digital asset, NFT, or irreplaceable token, has gained wide attention in recent years. They are unique, one-of-a-kind items that cannot be traded with other items of equal value. While NFT first became popular in the arts, it has since gained traction in industries as diverse as sports, music and games.

An exciting development in the world of NFT is the emergence of the brand NFT. These NFTs are created by, or associated with, well-known brands, companies, or celebrities. Brand NFTs offer fans and collectors the opportunity to own their favorite brand or celebrity, which can be used to promote and engage fans in new and innovative ways.

Sports NFT

Since 2022 is FIFA World Cup year, we have seen many soccer players and teams launch their NFT series. For now, the most popular option for having a licensed digital card in the form of an NFT is Sorare.

Sports cards have long been beloved collectibles, with fans collecting physical cards of their favorite players and teams. More recently, digital sports cards in games, such as FIFA's Ultimate Team, have also exploded in popularity. Now the collectibles industry is turning to NFTs as a new medium for sports card representation and trading.

Commercial brand NFT

Top brands also use NFTs to build awareness. Coca-Cola, for example, used NFT as a marketing tool in July 2021, selling it for $575 in an online auction. Selling a collection for $883.61.

A new wave of mainstream brands NFTs is expected to increase its share of the overall NFT market in 2023, which is currently dominated by PFP type NFT.

Forecast for 2023

Due to the overall growth of Web3, brand and sports NFT are expected to continue their upward trend until 2023. The increasing adoption of blockchain technology and the desire for unique DeFi products as revenue streams and unique trademarks could drive this trend.

7. Transparency

Many cryptocurrency projects have historically been vague about their operations, inner workings, finances, teams and partnerships. However, recent events, such as those involving FTX, have led to increased focus on transparency in the cryptocurrency industry.

As a result, many projects are now taking steps to increase transparency.

doxxed team has been added.

More projects have disclosed all of their project wallet/Treasury addresses.

Some companies work with community members to organize independent DAOs to manage decisions related to money management.

A public road map that allows community participation.

More projects disclose product updates and report on their progress.

The founding team openly shares their mistakes (if any) and lessons learned.

Project announcement links with relevant investors and all project related stakeholders.

The CEO/ founder is actively involved in the community, maintains the blog/Twitter, continues the podcast, does the AMA.

In addition, the number of publicly available monitoring tools is increasing:

Certificate of exchange of reserves (Coinmarketcap, DefiLlama).

All data related to the dApp and DeFi protocols is exposed on the chain and easily verified (DefiLlama, Dune Analytics), so it makes no sense to hide/lie some information.

This trend will accelerate as legitimate projects aim to gain more trust from the community/investors.

Shady projects get a lot of attention. Communities will start noticing the red flags early.

This trend toward transparency is accelerating as legitimate projects struggle to gain the trust of communities and investors. At the same time, less transparent projects will raise red flags and be seen as untrustworthy. It is vital that cryptocurrency projects remain transparent to build trust with communities and investors.

Will the transparency trend continue in 2023?

The FTX crash has had some positive outcomes, including increased awareness in the cryptocurrency industry. Government regulatory actions, a loss of customer trust, and capital outflows have prompted more transparency on centralized trading platforms and other crypto programs.

The first step towards transparency is the introduction of reserve proof data. Top analytics projects have also added tools to make it easier to track these metrics, making projects harder to hide.

8. Market integration (acquisition/partnership)

As the bear market dragged on, industry leaders snapped up smaller companies that were struggling to survive. This trend can be observed in the NFT space, with Uniswap acquiring liquidity aggregator Genie and OpenSea acquiring Gem.xyz.

In addition, partnerships are being established between existing projects to weather the cryptocurrency winter together.

During a bear market, financing can be tight and the hype surrounding the sector can dissipate. In such cases, smaller projects may turn to partnerships as a free marketing tool to increase their visibility and reach. On the other hand, when there is less hype and competition in the market, large projects may be more willing to partner with or acquire smaller projects.

An example of market consolidation in the cryptocurrency industry is Balancer  And   Aave  A partnership recently established between the two countries to exchange governance tokens and introduce a common pool. Both projects are well-established in the industry, but by joining forces, they can expand their reach and provide more value to users.

Will this trend continue in 2023?

Partnerships and acquisitions can provide access to new resources, technologies and user groups that can help projects survive and grow in the long term. If the market continues to consolidate, partnerships and acquisitions will likely continue.

9. Compliance

Regulatory compliance is increasingly key in cryptocurrencies as governments around the world seek greater oversight and transparency.

In America

The recent FTX cases highlight the need for cryptocurrency projects to be prepared for additional scrutiny from regulators. Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC), called on lawmakers to create a regulatory framework for digital assets in the wake of the collapse of cryptocurrency trading platforms.

Mr Behnam told the Senate committee that the CFTC had no authority to regulate the spot market and was "helpless" because it could not register a platform for trading in the spot market.

He also said the CFTC had no legal authority to examine any other FTX entity and had no knowledge of its operations. Behnam has previously called on lawmakers to give the CFTC more power to regulate digital assets.

In Europe

The MiCA (crypto asset Market) regulation will be introduced in 2023. On 10 October 2022, the European Parliament's Economic and Monetary Affairs Committee voted overwhelmingly in favour of the regulation, paving the way for a vote by the whole European Parliament before the end of the year.

If passed, the law will allow providers of digital wallets and other cryptocurrency services to sell their products across the European Union, provided they register with national authorities and meet minimum guarantees of investor protection and financial stability. The MiCA bill also requires cryptocurrency issuers to publish a white paper with information about their projects.

There are some concerns about the restrictions on stablecoins and whether the rules apply to uncounterfeitable tokens (NFT). In addition, the EU is considering the development of a digital financial strategy, the Digital Operations Resilience Act (DORA) and a pilot regime for DLT for wholesale use to strengthen regulatory compliance and ensure the stability and security of the cryptocurrency industry.

What will 2023 mean for cryptocurrency investors?

Web3's founders are likely to face greater regulatory scrutiny and may need to obtain more licenses to operate in 2023. The cryptocurrency event of 2022 has spurred regulators around the world into action, and the trend is expected to continue.

summarize

With the widespread adoption of blockchain technology, Web3 has become the forefront of innovation for entrepreneurs and builders.

The industry is still in its infancy and growing rapidly, with trends changing from month to month. Staying ahead of the curve and staying on top of recent market developments has become critical.

In 2023, we expect to see that. Significant advances in SocialFi, insurance protocols, and NFT liquidity instruments. Mainstream NFTs, M  2  E, as well as the DEX Advanced trading tool, are expected to achieve even faster speeds.

However, it is also important to keep an eye on new industry regulations and stay up-to-date on relevant market consolidation.

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