The crypto space is changing at light speed. 2021 was a year filled with several milestones as NFT record prices started making headlines around the globe, which forced many investors to reconsider their investment strategies and principles. It was also a time when several Ethereum competitors, like Avalanche and Solana, grew exponentially on the market, allowing the Ethereum ecosystem to finally reach a point of scalability.
With the crypto market evolving tremendously, this is likely only the beginning. As we speak, the space is already sharing news of new and exciting developments on the horizon, which are expected to undoubtedly shape the future of cryptocurrency. So, much like bettors intending to keep themselves in the loop of things by consulting with NFL matchups this week, here’s an update on top trends currently setting the stage for cryptocurrency.
Your Top Trends
DeFi On Bitcoin
Smart contract blockchains have been the basis for the success of decentralized finance (DeFi) projects in recent years. It started on Ethereum but then developed onto other platforms like Solana, Binance Smart Chain, and others.
Ethereum was set to be the first blockchain to incorporate smart contract capabilities, meaning all DeFi projects were launching on Ethereum since there wasn’t any other alternative available for developers at the time.
Once the chain established itself as DeFi’s first smart contract platform, developer teams still in the process of establishing themselves became eager to begin deploying their projects on the blockchain as well. At this point, the network effect was operating in full force, leading to Ethereum becoming the leader of DeFi today.
While all this was taking place, Bitcoin watched from the sidelines. Even though Bitcoin is the largest and most popular cryptocurrency to this day, its network wasn’t included on DeFi developments because of its technical limitations.
But when Bitcoin implemented the Bitcoin SegWit upgrade, everything changed because it made it possible for the crypto to launch Bitcoin sidechains for the first time. Thanks to the upgrade and the help of enthusiastic developers, these Bitcoin sidechains have now incorporated smart contract capabilities that are pretty similar to those on Ethereum. However, these capabilities have inherited Bitcoin’s network effect, security, and settlement assurances.
Calls For Interoperability Are Getting Louder
Those using applications and services on various layers and blockchains have previously experienced several challenges along the way. Traders have found themselves needing to bridge funds and own several crypto wallets from one blockchain or layer to the other, meaning a lot of in-depth knowledge would be required to do the job.
Frictions like these lead to many unpleasant user experiences since traders have no choice but to spread their funds on different applications and wallets all over the crypto market. Some services will try to relieve the situation by offering wallet services that allow users to connect to various blockchains and layers while using the same wallet.
But despite this, bridging will still be necessary. Such efforts can be seen as little milestones toward finally having an interoperable crypto world, but this isn’t enough to address the struggles that a multi-chain world presents.
For this reason, several projects have begun to address this issue on a larger scale with the hope that there will be some form of meaningful change. Not only have crypto projects started recognizing the potential of blockchain interoperability, but established institutional firms are also supporting this movement and exploring new business models that can only exist through interoperable blockchains.
Therefore, as the call for interoperability increases, the demand for solutions gets louder, projects able to deliver workable solutions will have a chance at becoming highly successful now and in years to come.
NFTs, Metaverse and GameFi Are Becoming The Next Internet
Since Facebook went from Facebook to Meta, metaverse has become the new buzzword. With the metaverse, people can move in an augmented and virtual reality in a futuristic digital world. It’s something the internet is working towards, but it’s combined with a few current trends taking place in online infrastructures, like the creation of 3D worlds.
But as we focus on this current trend developing in other markets, it looks like the metaverse is also tightly connected to NFTs and the crypto space as a whole.