The year 2021 was a record for the blockchain and crypto sector. Major cryptocurrencies such as Bitcoin and Ethereum hit new highs, and the market cap of the entire industry exceeded the $2 trillion mark. A number of promising new protocols, including Solana, Avalanche, and Hedera Hashgraph, emerged. But what about 2022? Where will Blockchain go from here? Read on to learn about some of the trends that we’ll see in blockchain in 2022 and beyond.
More Environmentally Friendly Blockchains
Due to the nature of blockchain technology, it has been criticized for its environmental impact. One of the main reasons why many of the protocols that are used today require large amounts of energy to perform their operations is due to the design of the Proof of Work consensus algorithm.
In 2022, it’s expected that the focus on reducing the environmental impact of blockchain technology will increase. One of the most prominent initiatives that will be implemented in this direction is the implementation of the PoS consensus algorithm on the Ethereum platform.
The NFT Market Will Mature
The success of non-fungible tokens in the year 2021 gave us a taste of the potential of this technology. In 2022, it’s expected the market to continue growing as developers continue to improve the platform. Also, due to the increasing number of utility-focused projects, the appeal of NFTs will continue to grow.
The rise of the Metaverse and the increasing number of utility-focused projects are two of the main factors that will drive the shift towards utility in the near future. The former promises to give users new ways to enjoy virtual experiences.
One of the main factors that will determine the success of NFTs in gaming is the platform’s ability to produce something beyond just a new type of collectible. This is because traditional gamers have already rejected the technology’s foray into their field due to how rushed initial attempts to use the technology seemed.
DeFi Will Keep Growing
In 2021, the DeFi space continued to grow as major players in the industry started to improve their technology and implement scaling solutions to improve their efficiency. The end of the year also saw the emergence of the DeFi 2.0 narrative, which was largely due to the increasing popularity of new products such as Tokemak, Rari, and Olympus.
In 2022, it’s expected that the DeFi 2.0 narrative will continue to flourish as developers continue to improve their platforms and come up with new products. Also, we’re likely to see more serious efforts to expand the scope of the industry.
It’s also expected that the DeFi space will continue to grow as more companies start to launch their own products. The success of projects such as Pancakeswap on the Binance Smart Chain showed that there’s more to the DeFi industry than just Ethereum.