Cryptocurrencies experienced a major boom by the end of 2021, with market capitalization reaching a whopping $3 trillion. Suffice to mention that as at the start of the year, it was barely $800 billion. Today, DeFi has a TVL of about $100 billion on only Ethereum.
The growth in this domain has been massive and the NFTs market is currently booming. A few years ago, no one could have envisaged this unprecedented growth.
Despite the difficulty associated with predicting the future of crypto and NFTs, the trend in the past year gives a good idea of what 2022 holds. On this note, we present four predictions for crypto and NFTs for 2022.
Blockchain-based Games and NFTs will Become a Primary Source of Income
The game metaverse is a virtual universe where people trade and economically collaborate. Interestingly, these platforms are nothing without blockchain-based infrastructures and NFTs. With the launch of Axie Infinity and the Ronin, GameFi experienced a huge turning point with an influx of players.
By August 2021, over one million active gamers have signed up with the Axie Infinity metaverse. Today, Axie Infinity has become a major source of income for many players, especially in the Philippines. It is interesting to mention that Facebook and Microsoft recently announced their intention to establish new approaches to the digital world.
All these are interesting trends that will have a significant economic impact on the multi-chain universe. Ease of value transfers across crypto universes is likely to drive a new wave of crypto adoption as well as the blockchain-based gaming and NFT economy.
DAOs will Open New Opportunities for Economic and Social Coordination
DAOs (Decentralized Autonomous Organizations) are blockchain-based. They are owned and managed collectively by members based on existing rules through voting with tokens. DAOs offer exciting use cases, which include social clubs, collective investment projects, human resources, and crowdfunding.
According to the reports from Consensys, about $14 billion is in the treasuries of the leading 20 DAOs in the world. Some of these DAOs are MakerDAO, ConstitutionDAO, Syndicate, and ClimateDAO. It is predicted that 2022 will witness the emergence of new DAOs. With access to DAO builder tools, it becomes easy for anyone to build a DAO for different purposes.
Ethereum will Remain the Dominant Platform for Smart Contracts
Ethereum will complete its transition to the proof-of-stake consensus system. Also, there is a high chance that financial institutions in the TradFi field will diversify into the staking business. That means staking rewards may become a prime rate of the crypto-asset market since it is difficult to invest in the market except through ETH staking.
Of course, there is the option of establishing a staking infrastructure or choosing one of the staking services like Blockdaemon or Coinbase. However, ETH will continue to hold exceptional potential like other Alt-L1 tokens as far as price development is concerned.
Even though the share of tokens and protocols mapped to ETH-based NFT and DeFi is reducing, ETH still maintains the biggest transaction volume so far.
Crypto and NFTs Investments will Become More Sustainable
Mining companies, financial institutions, crypto exchanges, and ETPs Issuers want to offer green services and products to customers. However, many prospective crypto investors are skeptical about putting money on Bitcoins because of the high carbon footprint in mining.
Additionally, interested institutions are required to follow stringent ESG regulations. Currently, there are models used in calculating the necessary climate compensation for Bitcoin products for crypto investments providers. Previously, it was required to pay $18 to offset the CO2 emission but now, the allowance has been increased to $100 for holding a Bitcoin for a year.
With this trend, likely, the CO2 emission prices will significantly increase in 2022. With this, the energy mix for blockchain network operations will become greener. This will ultimately lead to the sustainability of crypto and NFT investments.
These are four predictions for Crypto and NFTs in 2022. If all these predictions come to pass, crypto NFTs will become more attractive and lucrative. It should be noted that the forecasts mentioned in the post are based on available data at the time of writing.
The content of this post should not be construed as investment or financial advice. We recommend that you do your research before investing anywhere.