Here’s how to broaden your crypto horizons in 2022
As the hockey great Wayne Gretzky famously said: “I skate to where the puck is going to be, not where it has been.”
For 2022, that means recognizing the vast potential of how beyond Bitcoin, cryptocurrencies are transforming finance, markets, technology, and the way people live and play. While the mainstream news media tends to follow every high and low of the world’s first digital currency, crypto enthusiasts are looking for more opportunity that lie beyond BTC:
Decentralized finance (DeFi) is fueling the blockchain competition
No doubt, despite its high gas prices and congestion, the Ethereum network continues to dominate in the world of DeFi. But in the greater scheme of things, it – and competitors – have only scratched the tip of the iceberg when it comes to the potential.
“Ethereum processes over 1.3 million transactions each day in 2021, encompassing remittance, trading, lending, borrowing and various other types of transactions,” Cointelegraph reports. “This is a tiny number as compared to over 1 billion daily global credit card transactions, and the around 5.5 billion daily trading volume in NASDAQ. Capturing 1% of the credit card transactions on the Ethereum chain is at least 8x-ing its current volume.”
Consider the value of DeFi, as noted in a recent Messari report:
“DeFi offers savers 5% vs. Wall Street’s 0.5%. Non-fungible tokens (“NFTs”) give creators monetization opportunities without Hollywood’s 50%+ rents. Open games and social graphs remove the 100% take rate from tech incumbents and eliminate deplatforming risks.”
So, in essence, the potential for growth in the DeFi sector is great as it chips away at the Traditional Finance (TradFi). Blockchains such as Solana (SOL), Avalanche (AVAX), PolkaDot (DOT) and Cardano (ADA) are making gains in the DeFi space.
CNN noted: “As a result of competitors such as these, the total value locked (TVL) on DeFi increased seven times year-over-year, surpassing $200 billion,” DappRadar reported. “However, almost of the TVL still remains on Ethereum.”
Ethereum will be rocking the DeFi boat in 2022 as it joins with Eth2 and moves to the proof-of-stake model for validating transactions. The changes are expected to make the network more secure and scalable. Yet, for miners, it means a loss of revenue gained from the proof-of-work model from Ethereum, which could impact DeFi in other ways.
NFTs Take Center Stage
Non-fungible tokens (NFTs) were the breakout crypto story of 2021.
“The NFT space experienced one of the most impressive expansions overall, amassing over $23 billion in trades in this year,” DaapRadar reports.
While the mainstream media ogled over celebrity sales, the NFT story goes beyond artwork, tweets, and trading cards. “Most people didn’t know what an NFT was until this year, when sales boomed, sparked in large part by artist Beeple’s March auction of a digital collage NFT for nearly $70 million,” USA Today reports. “Other highlights include Twitter CEO Jack Dorsey selling an NFT of his first tweet for $2.9 million and electronic musician Grimes selling $6 million worth for her digital art.”
But look beyond the headline grabbing sales and you’ll find another large area of growth in this category is occurring in the play-to-earn gaming universe. Gamers have now found a way to turn their hobby into an income generator as they promote their games to users.
“What I'm excited for is the democratization of NFTs - platforms that make it possible for all types of people to benefit from NFT sales,” said Jonathan Teplitsky, CEO of Pipeline Marketing. “This includes everyone from an individual influencer to a small mom-and-pop shop who want to use NFTs to drive sales.
“The shift will start as tools are created to enable businesses from small mom and pops to large retailers to quickly and easily integrate NFTs into their current marketing strategy,” Teplitsky said. “Most importantly, these tools need to work without having to understand coding or blockchain technology. The next frontier will consist of services that make this all possible.”
For those looking to capitalize on the momentum of the cryptocurrency explosion, remember Gretzky’s words: skate where the puck is going to be.
Joyce Pavia Hanson