Without a doubt, 2022 has been a pretty bleak year for the cryptocurrency world. DeFi in general. Fraud, hacking, fraud, and other illegal activities have severely eroded trust in the industry. Market sentiment towards cryptocurrencies is significantly lower than it has been in the last two years.This also hindered progress made by blockchain and DeFi protocols.
As we head into the new year, it’s important to take a look at some of the key industry forecasts for 2023 to understand how the market will evolve or change in the new year.
Good points from 2022
2022 wasn’t all grim and negative. We have seen increasing adoption of blockchain across all industries.Specifically, the banking industry has ramped up blockchain Market share to 29.7% Last year it was 11%. Last month, one of the largest organizations in the banking and financial services industry, JP Morgan Implements First Blockchain Transactions using the Polygon network. Citigroup also increased its investment in blockchain this year.
of Adjusted TVL (total value locked) DeFi protocol revenue also increased from $60 billion to $142 billion this year. 2021, ethereum was the leading blockchain network for existing and emerging DeFi projects. Ethereum maintained its dominance in 2022, but other competing blockchains such as Solana and Polygon have also increased their market share this year.
DeFi and Crypto Top Predictions for 2023
regulation is inevitable
From Celcius to FTX exchanges, the current industry has been plagued with scams and hacks this year.recently FTX Collapse Alone, over $1 billion in user funds was lost. Major crypto investment platforms such as BlockFi have also filed for bankruptcy due to lack of funds to service user withdrawals.
The continued success of these events in 2023 inevitably raises concerns about increased regulation within the industry. binance CEO CZ has already provided a statement supporting the need for more regulatory oversight of centralized exchanges.U.S. President Joe Biden, along with the rest of his G20 nations, Regulatory framework For digital assets and transactions. These moves and the current market scenario suggest that more regulation will apply to cryptocurrency and DeFi marketing in 2023.
Decentralized Exchanges (DEXs) Gain Momentum
The continued failure of centralized exchanges this year shows that transparency and control are the most important aspects of this industry. Many users are acutely aware that depositing funds on centralized exchanges is not a good idea.
DEXs are often complex and require more due diligence for the average user, but such platforms offer complete transparency and control. Users do not have to hand over their funds to companies and have full visibility of how their assets are stored or invested within the platform. Therefore, 2023 could be a breakout year for DEXs, with even more innovative features coming to DEX applications and platforms.
Stablecoins come under scrutiny
After the Terra LUNA and its UST stablecoin debacle, the market has become very wary of stablecoins that do not have adequate audit mechanisms to validate assets and maintain a dollar peg. Several Tier 2 stablecoins have already failed in 2022 due to lack of user interaction and adoption. Such scrutiny could continue in 2023 as new stablecoin entry into the market is likely to remain low. The market may continue to be dominated by USDC and Tether.
Will Ethereum Surpass Bitcoin?
In terms of growth and scalability, ETH is on track to outperform BTC in 2023. Hungry Mining based Proof of Work (PoW) framework. Not only has this made the popular blockchain more sustainable, but it has also significantly reduced the supply of ETH tokens.
This will be positively reflected in ETH in 2023, where Ethereum may overtake Bitcoin due to the network’s wide adaptability.
Overall, 2023 will be an important year for DeFi, blockchain and cryptocurrencies. With market sentiment remaining low, the community expects to pick up heading into the new year.
