原文：《Top 10 Trends in 2023: An Overview by Hashed》by Simon Seojoon Kim
Compiled by: Qianwen, ChainCatcher
As the cryptocurrency industry continues to gain mainstream adoption and its infrastructure continues to improve, user experience and security are becoming increasingly important to end users. In this regard, wallet providers play a vital role in facilitating access to decentralized applications and will build bridges for thousands of new users. Of course, challenges remain, especially for ordinary users, private key management and signing protocols are still very complex.
Solutions that solve complex problems such as wallet key management and signature authentication for ordinary users are gaining attention. One of the solutions is Web3Auth, which uses multi-party computing (MPC) technology to provide a non-custodial login experience and eliminate the need for mnemonics. Platform Magic provides developers with wallet and SDK options that allow login to dApps via email and SMS, without the need for mnemonics. In addition, Ramper, through its mobile SDK, focuses on providing seamless social login and single sign-on (SSO) for users who are not familiar with cryptocurrency to access blockchain applications.
As the usage of mobile devices grows exponentially, wallet companies should prioritize mobile services to attract a wider audience. Coin98, a fast-growing platform with 6 million users, aims to become a leading mobile super app by emphasizing the security of mobile transactions and the improvement of user experience. Meanwhile, Robinhood is launching a standalone wallet app that allows users to manage their assets effortlessly while seamlessly integrating with various DApps to solve long-standing problems such as heavy design and excessive fees.
Smart contract wallets are also a solution. They can be programmed, have functions such as consumption limit and automatic transaction, and enhance security through multiple signatures. These wallets meet users with different needs and understanding levels. For example, Argent provides social recovery and limited single functions. Safe is a non -hosting wallet that allows users to store and manage their digital assets safely through multiple signature functions.
In addition, there is room for smart contract wallets in the Ethereum ecosystem. For example, Account Abstraction (AA) aims to unify the two types of Ethereum accounts, Externally Owned Accounts (EOA) and Contract Accounts (CA). AA will eliminate the need for private keys for EOAs, allowing accounts to operate like smart contracts, unlocking potential use cases for improved key management and multi-signature capabilities. Visa recently demonstrated the potential of AA by building an automated payment solution on StarkNet. As attention to AA increases, we foresee that the NEAR protocol will gain attention from builders whose account model already enables the use of multiple key pairs as keys.
MetaMask is a recognized leader in the cryptocurrency wallet space and entered the competition using MetaMaskFlask. Flask enables developers to customize their own version of the MetaMask wallet. MetaMaskSnaps is the first feature of Flask that allows anyone to extend the functionality of MetaMask and leverage it with different blockchain protocols. Most of their sales now come from spot trading, which is a monotonous source of income. This revenue model has generated more than $450 million in revenue in more than 2 years since its launch, but it is highly susceptible to market fluctuations. But if they succeed in building a dApp ecosystem on their product, they will easily stand out as a profitable ecological platform.
Two: Add web3 elements to the digital identity to move towards the decentralized society
There are several areas where the current digital identity system needs improvement. A major issue is fragmentation, where individuals have multiple identities on different platforms, resulting in a lack of accuracy and continuity in personal identification. Privacy and security are also issues of concern, as individuals often need to provide sensitive information to establish a digital identity on different platforms, which can lead to identity fraud and financial crime if this information is used or shared without consent. In addition, the centralized control of digital identities by platform service providers has also caused concern. Digital identities are often controlled by a few companies or organizations, which may lead to users lacking control over their own identities.
Blockchain technology can provide a differentiated solution to these problems through the use of private wallets, allowing individuals to verify their digital identity by proving ownership of a specific token or NFT. Storing assets and information on the blockchain can improve the accuracy and reliability of digital identities. Blockchain-based identities enable individuals to consolidate multiple online identities into a unified, self-sovereign entity, giving them control and autonomy over their digital identity. CyberConnect is a company building a decentralized social graph protocol that uses Web3 State Tokens (W3ST) and network connection profiles (ccProfiles) to provide users with composable, self-sovereign identities.
Digital identities can also be created and managed without the use of tokens or NFTs. For example, several Ethereum-based projects such as Disco and Orange Protocol use DID (decentralized identifier) and VC (verification credential) as a complement to Soul Bound Tokens (SBT). Of course, a single solution may not be enough to meet all privacy needs. To achieve optimal security and privacy, it may be necessary to combine on-chain solutions such as SBT and off-chain solutions such as VC. In addition, progress should also be made in developing better data storage solutions that provide privacy and partial decentralization and seamlessly integrate between different identity layers.
With the web3 status, users will be able to easily find, connect, and even establish a threshold community with other people with similar interests, such as using the same DEFI protocol, having NFT, or playing blockchain games.
Decentralized social networks have been a growing trend throughout the year’s hackathons, with 40% of the winning projects falling into this category. Lens Protocol has over 60 projects that were spun out of the hackathon entirely, experimenting with various approaches around social graphs. Farcaster and DeSo have each raised significant funding amidst this huge interest. This year, we can expect to see the initial development of blockchain-based social applications that leverage network effects by using shared social graphs.
3: Optimize the use of ZKP to achieve the privacy of an account -based smart contract platform
Currently, the application of zero-knowledge proof (ZKP) in the field of encryption is mainly focused on improving scalability through verifiable off-chain computation. As scalability solutions continue to advance, privacy has also received more attention, because ordinary user experiences, such as voting, governance, and payments, can greatly benefit from the implementation of privacy.
Achieving privacy in account-based smart contract platforms such as Ethereum is challenging because of the complexities of both encrypting the ledger state and maintaining its verification. Several notable teams are working to address this problem. A common approach among these protocols is to incorporate “notes” from the UTXO model into an account-based system, making ownership and its transfer more explicit.
AztecConnectSDK allows Ethereum protocols to integrate with Aztec's private rollup, which leverages an encrypted UTXO architecture for privacy. Based on AztecConnect, ZK.Money provides a private DeFi yield aggregator that integrates with major projects such as AAVE and Uniswap. In addition, PolygonMiden is introducing a "hybrid UTXO and account-based state model" for EVM-compatible ZKrollup to support private transactions, which consist of local execution of off-chain data.
To promote experimentation and innovation in privacy-enhancing technologies, it is necessary to reduce developer friction on these infrastructures. Web3 development has brought a series of unfamiliar difficulties, such as fragmented indexes, additional security issues, etc., so the complexity of increasing privacy should be abstracted as much as possible. There is no doubt that this effort will mature further in 2023, cultivating a more mature testing ground for exciting applications.
Four: The programmable NFT technology represented by dynamic NFT will continue to develop
The NFT landscape has evolved dramatically over the past few years, especially those in the form of profile pictures (PFPs). However, in the second half of 2022, image-based NFT transactions have significantly decreased as users have begun to desire more functionality. As a result, the NFT ecosystem is undergoing a transformation to meet this changing demand. Ethereum Improvement Proposals have become a measure of the direction of the Ethereum community, and most recent proposals have focused on NFT standards, indicating that the community wants to have NFTs with additional utility. We believe that 2023 will be a critical year, and various NFTs, including dynamic NFTs, will address these issues by providing new functionality.
Dynamic NFTs are a unique type of NFT that can adapt and evolve based on certain triggers in its smart contract. These triggers can be the result of on-chain or off-chain events, or even events that occur in the real world. Changes to the characteristics of a dynamic NFT are usually achieved by modifying its metadata.
In addition to dynamic NFTs, there is increasing discussion in the community about other programmable NFTs that have advanced features such as executable NFTs, NFTs with separated permissions and shared ownership. This opens up a variety of possibilities for interaction and participation for creators, collectors, and gamers. Programmable NFTs are expected to gain huge popularity in the blockchain ecosystem because they can create advanced use cases that go beyond the traditional way of representing digital ownership through images or records. These NFTs offer a multitude of possibilities, such as creating interactive experiences, representing unique and complex digital assets, and developing new financial instruments.
At the same time, for dynamic NFTs to be widely adopted, the reliability of trigger events that cause NFTs to change needs to be resolved. To achieve this, it is necessary to implement more reliable oracles and establish clear NFT standards to verify the authenticity of trigger events, while also promoting transparency and fairness in the smart contract rules that govern dynamic NFTs.
As the blockchain ecosystem continues to attract more game developers, artists, and entrepreneurs, their creative skills continue to improve. The emergence of dynamic NFTs is expected to add a new level of excitement to the NFT ecosystem in 2023. The large number of talented creators in this field will open up endless possibilities for new and imaginative use cases.
Five: Explore the diverse NFT effectiveness, small and medium brands and creators will promote the new round of adoption
Despite the ongoing bear market and the attendant drop in sales, NFTs are becoming an increasingly popular way for companies to connect with their customers. Major companies such as Coca-Cola, Twitter, and Visa have already started using NFTs as a way to boost their brand image. Disney has already launched NFT-based digital collectibles with one of its subsidiaries, Marvel. To support this effort, they are actively looking to hire experts with knowledge and experience in this field.
Despite their foreseeable mainstream success, NFTs often lack sentimental value and sustainability for holders. In layman's terms, after acquiring an NFT, holders may not feel a strong connection to it over time, nor may they know what owning it brings. While many NFT projects or studios offer the interim benefits described in their roadmaps, they often fail to provide a sense of belonging and true ownership of the underlying IP and content, such as the sense of community and exclusivity provided by Yuga Labs' Bored Ape Yacht Club.
To address these obstacles, some teams are working to demonstrate how NFTs can provide real, lasting utility and a sense of belonging/ownership to a community of holders. For example, Modhaus is revolutionizing the K-pop entertainment industry by allowing fans to actively participate at a higher level, providing ownership through NFT-based governance and voting. TripleS is a unique K-Pop group that uses blockchain technology to give fans more influence in important decisions, such as being able to choose TripleS' sub-groups from the beginning and decide on the individual members of each sub-group.
In 2023, small and medium-sized brands and individual creators will accept NFTs as a means to increase and maintain customer loyalty, echoing the lead of large enterprises in using NFTs in the previous year. This includes incorporating NFTs into membership and loyalty programs in real-world communities, such as local restaurants and social events. The practical benefits of NFTs, such as providing exclusive offers at offline events, will promote the widespread adoption of NFTs.
For NFTs to gain wider adoption, barriers to entry need to be reduced through easy-to-use wallet services. For example, RedditVault enables users to easily claim collectible avatars. At the same time, it is equally important to enable users who do not understand cryptocurrency to effectively utilize Web3 stack tools. The growing demand for enhanced user experience in NFT communities by long-tail brands and businesses will drive demand for services such as RareCircles or CIETY, which can start communities without the need for coding or technical expertise.
Leading NFT marketplace OpenSea also recently launched “Drops,” a tool for creators to launch their NFT projects. It also launched a customizable landing page on the EVM chain, designed to improve the experience for small and medium-sized brands and creators.
Six: Chain Tour will adopt a strong IP to be more friendly to ordinary users
Although blockchain games have only been launched in the past two years, they have seen unprecedented growth in late 2021. In addition, with the emergence of novel concepts such as game guilds, the evolving gaming ecosystem in the Southeast Asian market has also made GameFi an area of high interest for cryptocurrency builders and traditional gaming groups.
Due to macroeconomic conditions and market turmoil, blockchain gaming development did not reach the assumed heights in 2021-22. Despite this, the blockchain gaming sector, including GameFi, has received more than US$5 billion in financing each year since the fourth quarter of 2021, and we expect more AAA games to be officially launched in this field in 2023.
In order to provide innovative experiences for gamers, we often see the adoption of well-known IPs, such as popular webtoons and movies, and even mature blockbuster game IPs combined with blockchain technology. Korean conglomerates such as Nexon and Netmarble, as well as global companies such as SEGA, BandaiNamco, and SquareEnix are also working to integrate their IPs into games. For example, user-generated content (UGC) platforms that use popular images and plots (such as Gundam Metaverse) are gaining attention. Nexon also announced a blueprint for a creator-driven ecosystem that will rely on the main IP MapleStory Universe to access the blockchain. In the future, more content companies will expand the IP of games by leveraging blockchain.
However, the pressing issue of blockchain games having a high barrier to entry for ordinary users remains unsolved. AxieInfinity is one of the most successful blockchain games, with over 2 million MAU in 2021, but it has faced challenges in attracting more users due to the difficulty in creating wallets and purchasing assets. In the future, it is expected that the barrier to entry will be lowered, and players will be able to play blockchain games without the need for a wallet, or wallet creation will be smoother.
In 2023, we expect streamlined onboarding tools to be gradually introduced to attract more players, while blockchain infrastructure provides convenient mobile SDKs to facilitate the launch of top games. Multi-chain wallet services specifically for the gaming sector, such as Sequence and FaceWallet, will work with a number of blockchain gaming companies to improve accessibility, and infrastructure companies will also make similar efforts, such as ImmutableX’s recent announcement of the launch of ImmutablePassport. These collaborations will help create a more seamless and user-friendly experience for all gamers.
Seven: Establish an elastic infrastructure for the next generation of DEFI, and NFT -based virtual products will rise
In the real world economy, production and finance are closely related. Production activities are based on natural resources and infrastructure, and the financial industry enhances the growth of these activities by providing loans and other financial instruments. For example, a farmer might build a ranch and raise cats (production), and banks and securities companies can take advantage of this by providing financing or listing on an exchange (finance) and help the farmer expand his business.
However, this balance is lacking in the crypto economy until 2022. Infrastructure-level projects such as cryptocurrency exchanges and currency markets crashed (finance), causing financial market instability and preventing projects that impact utility and communities from thriving (production). The foundation of the crypto economy, blockchain technology (infrastructure), is in place, but requires the development of more production-focused projects to support its growth.
The main DeFi tokens have interdependent value, and the value of a token depends on the use and value of other tokens in the DeFi ecosystem. This creates a fragile structure where a drop in the value of one token affects the entire DeFi market, which causes the DeFi market to drop sharply in value when there is regulatory uncertainty or skepticism about the entire industry.
The primary challenge for the blockchain industry is to build a solid infrastructure that makes it easier for the public to use and enables real added value in the commodity production market. Fortunately, the transaction volume of blockchain has been growing steadily. Currently, there are 5 leading L1 projects with a transaction volume of more than 1 million. They can provide scalable and private modular solutions that are user-friendly and easy to get started, and also provide digital identity solutions.
In addition, digital products are also slowly emerging, including non-fungible assets generated through L1 block space. Ethereum is the largest existing smart contract platform and is still generating a large number of NFT transactions after the last NFT summer, with a total transaction volume of more than $35 billion. Despite the decrease in activity in the NFT community and the decline in OpenSea's transaction volume, secondary NFT transactions are still strong, exceeding $780 million per month.
Ethereum is no longer the only ecosystem, and other communities have thrived on the scarcity of non-fungible goods. Polygon's adoption of large-scale enterprise NFT projects such as Starbucks' "Odyssey" and the popularity of Reddit Collectible Avatars have attracted millions of Web2 users. Despite a drop in TVL of more than 80% and accelerated DeFi user churn, Solana has maintained a secondary trading volume of nearly $150 million per month. In mid-2022, SolanaNFT, like Y00ts, successfully created a unique community different from the EthereumNFT community. During the bear market from August to October 2022, SolanaNFT's UAW number increased nearly 4 times.
New types of virtual goods will emerge, likely starting with blockchain games and metadata. These sectors accounted for the largest amount of funding in the first quarter of 2022. In addition, the use of programmable NFTs to represent real assets in virtual worlds will be discussed in more depth.
As infrastructure participants gradually accumulate valuable virtual items and the infrastructure stabilizes, the developed financial models will operate within the specific infrastructure. Exchange primitives like OpenSea and Blur, lending platforms like NFTFi and BendDAO, and various experimental models including derivatives platforms are all developing, although there is no clear winner yet.
DeFi smart contracts can be quickly applied to other blockchains, however, products such as NFTs and the communities built around them can never be copied and pasted. In 2023, the development of the blockchain ecosystem will focus on creating the smallest production scale to support these financial primitives, rather than infrastructure limited to DeFi. Mainstream blockchains will focus on building a strong ecosystem around NFT-based products that are difficult to replicate, such as NFT communities and blockchain games.
8: Artificial intelligence will play an important role in the development of blockchain games and other aspects
It has made significant progress since its birth.
With the success of Large Language Models (LLM), there is a growing expectation that AI will be widely used in 2023, with ChatGPT being a prime example. The blockchain gaming industry will benefit greatly from advances in AI, especially in streamlining traditional game development processes and increasing gaming experiences – all made possible by generative AI.
Generative AI is a field that has been developing for more than a decade, but only recently has it advanced enough to mimic or even surpass human capabilities in image, language, and speech recognition. The market is valued at $8 billion in 2021 and is expected to reach more than $63 billion by 2028.
Currently, AAA game developers spend a large portion of their budget on content creation, which is also the main bottleneck in today's gaming industry. Top game studios take at least 3 years to complete production, so developers must predict consumer trends years before the product is released. In cryptocurrency games, the development cycle becomes even more challenging because the preferences of crypto players can change rapidly and unpredictably.
Generative AI can be a powerful solution to this problem. By collecting user behavior data from a core group of community testers over multiple game iterations, developers can train models to create unique, generative content that is tailored to a specific group of people, such as levels, characters, and items. This content is procedurally generated and evolves based on real-time changes in user behavior. This not only provides players with a diverse, dynamic gaming experience, but also helps developers reduce the need to manually create content.
In addition to gaming, we are also excited to see the potential of AI in other cryptocurrency verticals. Predictive risk management is becoming increasingly popular among trading teams, who train generative AI models to generate synthetic financial data to simulate different market conditions - prices, CEX/DEX volumes, order book depth, AMM liquidity, etc. This helps traders understand how to identify and respond to potential risks under various market conditions.
Smart contract auditing driven by AI solutions is another area we are focusing on. The current auditing process is cumbersome, inefficient, and expensive. We hope that future auditing AI models can be trained with large datasets of existing smart contract code, as well as information about vulnerabilities, bugs, and attack patterns. After sufficient data processing and cleaning, the model should be able to automatically analyze and audit new smart contract code inputs.
The most effective AI solutions are those that perfect the data collection process - both in terms of quantity and quality of information. The future we envision is an incentivized data marketplace. Decentralized computing protocols such as Filecoin and dFinity, and distributed GPU rendering protocols such as RenderNetwork, are leading examples. With the advent of distributed AI protocols, parts of the ecosystem can be tokenized while leveraging incentives in exchange for user participation and data sharing to further strengthen AI-based models. This symbiotic relationship between users, AI, and tokens holds tremendous potential to revolutionize the industry.
9. Institutional finance will enter the crypto market through blockchain infrastructure
Institutional funding is forecast to grow significantly in 2023, driven in part by growing adoption of tokenized real-world assets (RWAs: representing claims on underlying assets) and progress in enterprise-level staking and unsecured lending.
Currently, the most successful application of real-world assets (RWA) is stablecoins, with market leaders including USDT, USDC, and BUSD, the seven tokens with the highest market capitalization. Crypto-native organizations have shown clear initiative in RWA, such as MakerDAO, which has invested $500 million in U.S. Treasuries and corporate bonds and diversified into other types of RWA, such as real estate, invoices, and commercial loans. RWA now accounts for nearly 60% of Maker's total protocol revenue, showing the potential of this field.
Another major development in institutional finance is the growth of enterprise-grade liquidity staking, driven by the expansion of the LSD (liquidity staking derivatives) sector. Companies like Alluvial are building enterprise-grade liquidity staking standards to connect institutional capital to PoS blockchains. This allows token holders to stake their tokens and receive tokens that can be used as collateral, thereby improving capital efficiency. The effectiveness of the demand for liquidity staking has been proven by the expansion of this market, with the total token staking ratio progressing from 21% to nearly 40% in a year.
Decentralized lending has developed rapidly in the past two years, but most current lending models require overcollateralized debt positions, and on-chain borrowers lack access to universal credit. The DeFi space has become complex, with a high learning curve, and is fragmented across multiple dApps and infrastructures, making it difficult to manage positions and generate sustainable returns. The bear market revealed that yield farming cannot last, and the rise of unsecured P2P lending is seen as a more sustainable source of returns. On-chain unsecured lending provides transparency and enables guarantors to actively lend. Projects like Maple Finance and Goldfinch are actively working to provide capital to real-world institutional businesses in a decentralized manner.
However, the DeFi space is not without its challenges. The lack of clear regulations for cryptocurrencies is a major uncertainty for the industry. If the industry can drive iterative progress in on-chain tokenization and securitization, with clear guidelines, this will greatly benefit the industry and open up a wide range of possibilities for real, cash-generating activities.
Overall, we believe that institutional development is an inevitable progression for DeFi, while CeFi will continue to consolidate its position. Traditional financial institutions are expected to experiment more with established DeFi protocols such as MakerDAO, AAVE, and Centrifuge. In addition, a large number of startups are expected to focus on enabling traditional financial institutions to enter the cryptocurrency market in a regulatory compliant manner. This feature will have the potential to generate a larger financial layer, especially in emerging markets where millions of entrepreneurs are excluded from the financial system.
Ten: The rise of emerging markets led by India, challenging the dominant position of the United States in innovation and open source
The cryptocurrency space is witnessing a consistent inflow of new players, especially in emerging markets like India. According to the Global Cryptocurrency Adoption Index 2022 published by Chainalysis in September last year, India leads the field in terms of the amount of money transferred on both centralization and decentralization, showing significant cryptocurrency adoption among emerging economies. At the same time, from a supplier perspective, the United States has long been the center of global blockchain innovation, but it is now facing challenges from the rapid technological advancements taking place in emerging countries represented by India.
Over the past decade, India has emerged as a tech innovation hub and is considered one of the world’s leading sources of tech talent. More than 3,500 engineering colleges producing more than 1.5 million engineering graduates each year will propel India to become the world’s largest software developer base, surpassing the United States by 2024. Moreover, this talent base has moved beyond the executive level of multinational companies to innovative, high-value roles.
Additionally, India is witnessing the fastest growth in the world in terms of open source contributions, with a developer community of 9.7 million people on GitHub, second only to the United States. In 2022 alone, 2.5 million new users from India will join GitHub.
The biggest beneficiary of this technical talent pool is the Software as a Service industry. It is predicted that India's SaaS industry will grow 25 times to $50-70 billion in the next decade. Indian founders have delivered multiple globally recognized SaaS products and developer tools, including Freshworks, Zoho, Hasura, Postman, etc. With the support of the right ecosystem, India can also lead the next wave of innovation in the emerging world of blockchain. According to the 2022 Power Capital Developer Report, while the US Web3 developer market share continues to decline, India has steadily increased its market share to more than 5% in a relatively short period of time and has already ranked among the top 4 in the world in terms of the number of Web3 developers.
SaaS in India has seen exponential growth and activity, with over 500 former employees from Indian SaaS companies becoming entrepreneurs. This trend continues in blockchain infrastructure as several founders have spun out of Web3 companies to start startups. Early employees from leading Web3 projects in India, such as Polygon, have started building blockchain infrastructure projects.
The evolution of SaaS and infrastructure in the blockchain space will likely mirror the journey of the SaaS revolution in India, albeit at a much faster pace due to low costs, skilled, large English-speaking talent base, improvements in technology infrastructure, software-first and modular nature of cryptocurrencies, and digital GTM trends accelerated by COVID.
The above factors could make India the epicenter of the blockchain infrastructure movement, with founders building products in both horizontal and vertical areas. We will have to wait and see how these innovative Web3 projects in India perform in the short-term volatility and still show long-term growth.