Some of these are thanks to the fallout of FTX. Others are due to advances in related fields such as Artificial Intelligence. But the following three areas are shaping up to be some of the key narratives in crypto this year:
DEXs
Interoperability
AI Coins
Decentralized Exchanges (DEXs)
2022 was quite the year in crypto. We thought it was bad when Terra collapsed and wiped out nearly $45billion from the market in a matter of days. But then in November FTX imploded. And any recovery the market had seen since Terra’s fall in May, was decimated.
Beyond that, every other centralized exchange was put under the interrogation spotlight. And to add salt to the wound, bad actors such as Sam Bankman-Fried and Do Kwon only embedded the negative stigma surrounding cryptocurrency. So perhaps it’s no surprise that first on our list is the rise of the Decentralized Exchange (DEX).
These peer-to-peer marketplaces epitomize decentralized finance (DeFi), providing a platform where transactions can occur directly between digital asset traders, without the need for an intermediary. UniSwap, SushiSwap and PancakeSwap are some of the best established and most popular DEXs, with the likes of GMX and dYdx hot on their tails this year.
Interoperability
Interoperability is nothing new in crypto. But 2023 is the year where interoperability becomes a defining trend and will make or break a project's chances of success.
The ability for blockchains to communicate with other chains and protocols makes it easier for less digitally-savvy crypto enthusiasts to engage with decentralized applications (dApps) and other forms of crypto technology. And the easier it is for the everyday user, the more likely crypto will see mass adoption.
CEO and founder of THORWallet, Marcel Harmann, said. “Interoperability between two or more blockchains refers to one or both chains being able to understand and process the history of the other chain, thus enabling, for example, the exchange of assets between different layer-1 networks.”
For DeFi to realize its full potential, it’s integral for users participating in numerous different blockchains to be connected through a single, simple protocol. This not only maximizes the reach and impact of layer-1 blockchains, but also improves the user experience and reduces friction because users can access various dApps without having to change networks.
AI Coins
Thanks to OpenAI’s ChatGPT exploding onto the scene late last year, Artificial Intelligence has been the talk of the town for the last couple of months. And of course, the conversation has permeated the crypto space.
Ocean, Fetch and The Graph have been leading the charge. Fetch has been amassing considerable support for creating an open, permissionless and decentralized machine learning network for the crypto economy that allows users to access and link secure datasets through its autonomous AI to execute tasks. Basically, it automates a range of business-centric functions including trading and data processing.
The Graph’s protocol crawls and searches data from different blockchains in a similar way to how Google crawls and searches data from different websites. Crawling and indexing blockchain data can be challenging, but The Graph simplifies the job by organizing data into smaller ‘subgraphs’, making them more accessible and easier to process.
So for all the traders and investors out there, AI coins are definitely ones to watch and research. Some of the aforementioned projects have already seen significant gains this year. But then, so have a lot of tokens thanks to the January rally…
As always, #DYOR #NFA
