Coinbase Product Director Surojit Chatterjee released 10 predictions for Web3 and cryptoeconomics in 2022.
His predictions include ETH’s scalability, which he says will increase; the availability of L1-L2 cross-chain bridges, which he points out will be significantly improved; among others.
As Chatterjee recalled, 2021 was the year the price of BTC increased by nearly 89%. Furthermore, the value locked in DeFi has exploded by $150 billion and the NFTs have taken over the world with the metaverse.
Check out what Chatterjee hopes for next year:
ETH scalability will increase
According to the executive, when the number of Web 3.0 users reaches 1 billion, ETH’s scalability challenges are expected to increase exponentially.
“With the emergence of ETH 2.0 and many L2s, I’m optimistic about ETH’s scalability improvements,” he said.
Furthermore, he stated that development of L1 public chains such as Solana and Avalanche indicates that we will live in a world of multiple chains in the future and there will be new L1 public chains that will emerge, focusing on specific use cases like games or social media .
The usability of the L1-L2 cross-chain bridge
Then, the executive pointed out that with the development of more L1 and L2 networks, the cryptoindustry will strive to seek improvements in the speed and usability of L1-L2 cross-chain bridges:
“We are likely to see interesting developments in the usability of cross-chain bridges in the next year.”
ZkSync and Starknet
Chatterjee also pointed out that, in 2021, protocols like ZkSync and Starknet started to receive attention. So it became clear that these can be great solutions for public blockchains.
“When the L1 chain is congested due to increased usage, the ZK-rollup technology will attract the attention of investors and users. We will see the emergence of new privacy-centric use cases. This includes privacy and security applications,” he said.
He also pointed out that this could draw more attention from regulators to the crypto industry. In that sense, KYC/AML could be the real challenges facing privacy-centric networks.
Chatterjee also highlighted that the DeFi protocols will receive attention from regulators for the creation of KYC/AML processes.
“Decentralized identity and on-chain KYC authentication services will play a key role in connecting users’ real identities to DeFi wallets,” he said.
According to him, more people will accept addresses of the ENS type. At the same time, there will be new cross-chain solution systems.
About DeFi, he even said:
“Institutions are increasingly interested in participating in DeFi. First, compared to traditional financial products, institutions will be attracted by above-average interest rates. In addition, the cost of using DeFi to provide financial services was reduced, providing interesting opportunities for institutions”, he revealed.
Thus, in order to jump right into this universe, institutions need to confirm that they only deal with known counterparties, who have completed the KYC process.
In doing so, he believes the growth of regulated DeFi and on-chain KYC certification will help institutions gain confidence in the industry.
DeFi insurance will appear
Another prediction regarding DeFi is that the industry will increasingly become a target for hackers.
According to data from Elliptic, the total value of losses from DeFi vulnerabilities in 2021 exceeds $10 billion.
So, to protect users’ funds from hackers, a viable insurance contract will appear in 2022.
Meanwhile, on NFTs, Chatterjee said digital collectibles will continue to expand their use cases.
“NFT will become a passport to users’ digital and metaverse identities. Users will gather in different small communities based on the type of NFT they have,” he said.
Also according to the executive, the metaverse created by users will become the future of social networks and will threaten the current centralized networks.
Particularly about metaverse, Chatterjee stated:
“Many brands realize that NFT is an important tool for marketing and building loyalty. Coca-Cola, Campbell’s, Dolce & Gabbana and Charmin all launched NFT collections in 2021. Adidas recently launched a new Metaverse project with the Bored Ape Yacht Club. We are likely to see more interesting NFT brand marketing plans,” he said.
NFTs and metaverse, he said, will become the new Instagram brands and will attract more celebrities.
Web2 will wake up and try to enter Web3
Regarding web3, he said:
“We saw Facebook trying to reinvent itself as a Web3 company. We’re likely to see other big Web2 companies getting involved with Web3 and the metaverse in 2022. However, many companies can create a closed, centralized web version of the metaverse,” he said.
THE DAO 2.0 era is coming
Finally, as a last forecast, the executive highlights that DAOs will become more mature and popular. Consequently, this will result in changes in the employment relationship.
But decentralized autonomous organizations will also face new challenges in conducting mergers and acquisitions, compensation and benefits management, and coordination activities in larger and larger organizations.
“We will see a large number of tools emerge to help DAO function efficiently. Many DAOs need to figure out how to interact with traditional Web2 companies. It is likely that regulators are more interested in the DAO and try to understand how they work”, he concludes.