Web3 and Blockchain: What to Expect in 2023
By Valentyna Dynovska 675 26 Feb 2023
This article explores the latest trends and innovations in Web3 and blockchain for 2023. From decentralised finance and stablecoins to tokenisation and NFTs, learn what to expect from the sector's continued growth and evolution.
The world of Web3 and blockchain is rapidly evolving, and 2023 promises to be a year full of innovations and developments.
Despite recent regulatory actions and concerns that could result in new regulations, the crypto market, including decentralised finance (DeFi) and non-fungible tokens (NFTs), is likely to continue its expansion.
But what will this expansion look like?
Let's dive into each area and discuss the potential scenarios.
a. DeFi is becoming a thing
DeFi allows people to avoid centralised intermediaries and transact directly on the blockchain, improving transparency and security in the financial sector. While challenges remain to be addressed, including censorship and the risk of bull runs and crashes, DeFi is gaining traction.
The growth of DeFi has given rise to several trends:
- The increased usage of automated market maker protocols on various chains, such as Uniswap, which enables users to trade cryptocurrencies without needing a traditional order book custodial crypto exchange.
- Another trend is the rise of undercollateralised DeFi lending, which allows individuals to borrow funds without providing collateral.
- On-Chain Asset Managers are also becoming more popular, allowing users to manage their assets on the blockchain without needing a centralised asset manager.
b. NFTs. Is there life beyond the hype?
The NFT market, which skyrocketed to unimaginable heights in 2021, sold a whopping 1.5 million digital art pieces — the third and fourth quarters of 2022 brought a reality check with significant declines in sales volume. Still, the NFT realm remains popular.
Here is an overview of the 3 NFT trends to watch out for in 2023:
- “Blue Chip” Pixelated Art: Pixelated art is a growing area of the NFT market, and some pieces are being sold for millions of dollars. Collectors are betting on the value of these "blue chip" pieces, which are expected to retain or even increase in value over time.
- Generative Art: Another growing area of the NFT market is generative art, created by algorithms and unique and verifiable on the blockchain.
- NFT Ticketing. In 2023, the use of NFTs for ticketing will be a promising development in the entertainment industry. Event organisers could leverage the security and immutability of the blockchain to prevent ticket fraud and scalping by using NFTs to represent event tickets.
c. The growth of tokenisation
Tokenisation is the process of creating digital tokens to represent assets, and it's taking the crypto world by storm. It allows us to develop new revenue streams and increase liquidity.
Here's a prime example that occurred in 2023:
- Siemens has issued its debut digital bond to explore the benefits of blockchain technology, streamline operations and connect with prospective buyers directly. The bond, worth $64 million, has a one-year maturity period and was issued on the Polygon blockchain.
d. Increased use of stablecoins
Stablecoins are cryptocurrencies tied to the value of a fiat currency or other asset. They have found various use cases, from being a haven asset to facilitating cross-border transactions.
Their stable value can provide a more reliable payment, especially in cross-border transactions, without needing a trusted third party. Stablecoins can be used as collateral for loans or as a medium of exchange for trading other cryptocurrencies. Using stablecoins can also bring stability to DeFi, reducing the risks associated with highly volatile cryptocurrencies.
Despite growth in 2023, the stablecoin landscape will likely encounter roadblocks and regulatory challenges. For instance, due to the U.S. Securities and Exchange Commission (SEC)’s scrutiny, the Binance USD (BUSD) Paxos issuer was ordered to stop minting the coin.
e. Trends in DAOs
The rise of DAOs is one of the biggest things to hit the world of blockchain and decentralised systems. They operate through a decentralised system, where decision-making is controlled by its members and stakeholders rather than a central authority. DAOs are essential because they offer a new model for creating and operating organisations that are transparent, democratic, and decentralised.
The advent of social DAOs is transforming how we interact with technology and each other. For example, LinksDAO allows members to play golf with Michael Douglas, among other things. In January, LinksDAO raised $10 million from more than 9,000 members to create a decentralised golf course using DAO technology. This highlights the increasing trend of using DAOs for social interactions, collaborative activities, etc.
f. Blockchain in Gaming
Blockchain will continue revolutionising the gaming industry and introducing a new investment opportunity. With blockchain, players can finally own their in-game assets and trade them between games — for real money!
Blockchain has also opened up new opportunities for game developers who can now create genuinely designed games with blockchain in mind. Games can now include their in-game tokens, which players can use to earn rewards and purchase items. This creates a new level of engagement for players, as they can make real value for their in-game activities.
Who needs a savings account when you can invest in virtual swords? Am I right? Not really. Thousands of people lost money playing Axie Infinity and other NFT games. We advise you to invest wisely.
g. Developing Metaverse
The concept of the Metaverse, a shared virtual world where users can interact with each other through digital avatars, is rapidly becoming a reality.
Well, dear readers, we have ended our journey through the exciting world of trends, Web3 and blockchain in 2023. Though we’re not entirely sure what the future holds, one thing is for sure — it will be an exciting ride.
Watch out for the latest changes in decentralised finance, stablecoins, tokenisation, and DAOs.
Who knows, maybe one day, we'll be able to tokenise our pets too and take them for a walk digitally?
Wouldn’t that be something?