2021 was THAT year for cryptocurrencies. A breakthrough year for the crypto landscape with Bitcoin hitting multiple all-time high prices —even though they were followed by big pullbacks. These impressive prices of Bitcoin and other cryptocurrencies like Ethereum created great PR for the industry and this drew in institutional investments from major companies.
2022 has however not reached the heights of 2021. Since the turn of the year, the entire crypto ecosystem has been in a bear market. Top cryptocurrencies like Bitcoin and Ethereum have crashed by more than 50% from their all-time highs in 2021 and some experts have predicted that the prices of the crypto market could fall even further before there can be any kind of sustained recovery.
Quite a lot has happened in the first half of 2022. The different exploitations and rug-pulls are one of these happenings that have stood out most. Following the failure of TerraUSD and its sister token Luna in May, Celsius, which was once one of the industry's top lending companies, declared bankruptcy. Users complained of not being able to withdraw their funds from the platform before Celsius eventually froze all the accounts on their platform.
As investigations were carried out, it was brought to light that Celsius operated much like a Ponzi scheme, as they paid investors with the funds of previous investors. In their bankruptcy filings, it was made known that the crypto lender owes its investors around $4.7 billion.
Now to a more traditional form of stealing funds, hacking, $325 million was stolen in February from the Wormhole crypto bridge. Via the Wormhole bridge, the attacker minted 120,000 "wrapped" Ethereum on the Solana blockchain. (When crypto is wrapped, it means that the amount of the crypto is pegged to its current value.)
The bridge was temporarily shut down to stop the exploit and a $10 million bounty was offered to the hacker if they returned the stolen funds. That bounty wasn't accepted.
While the Wormhole hack was unique, the $325 million stolen pales in comparison to the $615 million taken in March from play-to-earn crypto game Axie Infinity. To make matters worse, Sky Mavis, the company behind Axie Infinity didn't notice they had been hacked until users tried to withdraw their earnings and found out that they were inaccessible.
Seth Green's stolen Bored Ape, Day of Defeat 10,000,000x crypto scam, users "looting" Nomad bridge of $186 million thanks to an exploit. These are just some other instances of how the hackers have managed to steal around $2 billion so far in 2022.
It hasn't been all doom and gloom though. There have been some positives and in the spirit of positivity, I strongly advise that we take that and run with it for the rest of the year.
NFTs So Far
“NFTs saw explosive growth in 2021, but this growth hasn’t been consistent and has levelled off so far in 2022,” is what Chainalysis wrote in their recent report. The report stated that at the start of the year, almost a million accounts were buying or selling NFTs actively, but that number has declined to about 491,000. The continuous decline in the prices of cryptocurrencies, Russia's war in Ukraine, in addition to the high inflation rate across the world, have led some experts to predict that the NFT market will continue to suffer.
This prediction, while popular for most NFT projects so far, hasn't affected a handful of others. DCB World, a curated NFT collection that incorporates a passion for art and gaming while giving an unmatched level of utility is one such project.
Apart from NFT art projects and tokens, developers have found a way to bring NFT technology and video games together. This convergence of technology has led to blockchain-based play-to-earn games that are changing how gaming is viewed today —and for the future. Genopets, a free-to-play, move-to-earn NFT mobile game built on the Solana blockchain is one such blockchain-based gaming platform.
DeFi So Far
If you've been in/around the crypto space, you'll probably have come across the term "DeFi" which is short for Decentralized Finance. If you haven't, DeFi is an online world where users can access alternative financial services that are powered by blockchain technology.
Because this sector of the crypto industry is still in its infancy stage, there have been a few bumps and bruises faced already (as can be seen with the security challenges so far). Like in the early days of the internet, DeFi is currently the “wild west” of banking and investment in many ways. There may be no way to recover your assets if you lose them to hackers.
According to blockchain expert and Professor of Fintech at Rutgers Business School, Dr. Merav Ozair, “The next step is figuring out how to make good code and kick everything up a notch.” This is what protocols like Maximum, Menthol and Source are fixing.
Maximum Protocol is a new-generation portfolio optimization tool that serves as an all-in-one destination for users looking to build portfolios and track them with AI-powered analytics.
Automated in a decentralized manner for sustainability, Menthol Protocol is a no-loss protocol that powers dApp transactions and offsets carbon emissions with the use of renowned renewable energy. The platform is built to become the go-to multi-chain sustainability protocol for the DeFi and NFT scene.
Not every decentralized application (dApp) is perfect, so you might want to develop one for yourself (if you're feeling adventurous). A comprehensive blockchain technology suite that can help you develop decentralized applications yourself is Source Protocol.
Conclusion
If there's anything this year has shown us is that the crypto industry is here to stay. Yes, there are incidents and exploitations and market conditions are currently not great but these would be corrected as developers figure out more ways to secure the assets and funds of people in the space. 2022 is a learning curve and the space would be better for it.
