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Part 2: Out­look 2022 — Cryp­to, Blockchain, Secu­ri­ty Tokens

Cryp­to & Blockchain

 

Meta­verse

Expec­ta­tions are par­tic­u­lar­ly high for the Meta­verse in 2022. Meta, for­mer­ly Face­book, has already declared the new dig­i­tal economies its No. 1 cor­po­rate pri­or­i­ty in 2021. “Our vision is that the meta­verse will be the suc­ces­sor to the mobile Inter­net. With its inter­con­nect­ed dig­i­tal spaces, it is full of oppor­tu­ni­ties beyond the phys­i­cal world,” says Tino Krause, coun­try direc­tor for the DACH region at Meta. In the meta­verse, many areas of life could have shift­ed com­plete­ly to vir­tu­al­i­ty in 10 to 15 years. Whether it’s prop­er­ty own­er­ship, shop­ping trips through malls, new jobs, exhi­bi­tions or con­certs. As this devel­op­ment has already been dri­ven by large com­pa­nies such as Adi­das or Nike in 2021 by dili­gent­ly devel­op­ing prop­er­ties in blockchain meta­vers­es such as the Sand­box or Decen­tra­land and Nike announced late last year to cre­ate the NIKELAND on Roblox, it is expect­ed that more play­ers will join and exist­ing ones will inten­si­fy their activities.

As the meta­verse forms an open uni­verse whose worlds can be cre­at­ed coop­er­a­tive­ly and embed­ded in the new dig­i­tal econ­o­my, a com­pe­ti­tion between two mod­els is already emerg­ing. Cen­tral­ized ver­sus decen­tral­ized, large cor­po­ra­tion ver­sus DO (decen­tral­ized organization).

 

NFT

NFTs, which were already a boom­ing top­ic in 2021, will become main­stream in 2022 and will find appli­ca­tion in a broad­er range of indus­tries, accord­ing to Acti­vate Con­sult­ing, a con­sul­tan­cy for the tech­nol­o­gy and enter­tain­ment indus­try and their Tech­nol­o­gy & Media Out­look 2022. One of the biggest NFT trends for 2022 will be the grow­ing par­tic­i­pa­tion of major com­pa­nies and brands, as evi­denced by pos­i­tive com­ments made in recent weeks by com­pa­nies such as Elec­tron­ic Arts and for­mer employ­ees of Activi­sion and Lucasfilm.

But NFTs also play an impor­tant role in the Meta­verse and Blockchain Gam­ing by cre­at­ing demon­stra­ble own­er­ship. A whole new lev­el of immer­sion. From swords and armor to entire plots of land. NFTs have become “gamechang­ers,” allow­ing par­tic­i­pants to become actu­al own­ers of their dig­i­tal items for the first time, and even earn mon­ey from them, which will fur­ther encour­age their adoption.

Recent­ly, for exam­ple, the pur­chase of a yacht in the sand­box meta­verse made head­lines. One gamer paid just under 150 Ether for the dig­i­tal lux­u­ry boat on the NFT trad­ing plat­form OpenSea. Anoth­er invest­ed 450,000 US dol­lars to become a dig­i­tal neigh­bor of rap leg­end Snoop Dogg.

 

Blockchain Gam­ing / GameFi

Blockchain or cryp­to games are dig­i­tal games that allow par­tic­i­pants to own parts of the game. This is because they exist on the basis of the blockchain on which trans­ac­tions, assets and own­er­ship are stored decentrally.

Clas­sic games, on the oth­er hand, are in the hands of a spe­cif­ic provider. It charges fees for use and makes fur­ther rev­enue with the sale of dig­i­tal goods, expan­sions and new ver­sions. Blockchain Gam­ing play­ers there­fore have more oppor­tu­ni­ties to use their game progress com­pared to clas­sic play­ers. Cryp­to games offer the oppor­tu­ni­ty to gen­er­ate rev­enue. Because this activ­i­ty over­laps with finance, it is also called play-to-earn or Game­Fi, in ref­er­ence to DeFi (Decen­tralised Finance).

Blockchain games rep­re­sent a grow­ing share of the games indus­try. Espe­cial­ly 2021 turned out to be the win­ning year for play-to-earn cryp­to games. Com­pa­nies devel­op­ing games with tokens received record amounts in var­i­ous series rounds. Sorare soc­cer NFT game, in which play­ers buy and sell cards fea­tur­ing real foot­ballers, raised $680 mil­lion in a fund­ing round and reached a $4.3 bil­lion val­u­a­tion in Sep­tem­ber. The com­bi­na­tion of blockchain tech­nol­o­gy, cryp­tocur­ren­cies and non-fun­gi­ble tokens, enable a vari­ety of new options for game developers.

In par­tic­u­lar, NFTs can be trad­ed inside or out­side the games. It is there­fore not sur­pris­ing that cryp­to games have a sig­nif­i­cant sec­ondary mar­ket out­side the games them­selves. For exam­ple, Decen­tra­land or Axie Infin­i­ty NFTs were among the most list­ed assets when NFT mar­ket­places like OpenSea or Rari­ble became big.

Blockchain games are still the excep­tion in the still rapid­ly grow­ing gam­ing indus­try. How­ev­er, the suc­cess of Axie Infin­i­ty with mil­lions of play­ers has shown that the growth poten­tial is huge. Espe­cial­ly a com­bi­na­tion of decen­tral­ized finance and blockchain games could become extreme­ly inter­est­ing in 2022.

 

Ethereum 2.0

For some time now, the devel­op­ment team around the Ethereum blockchain, the sec­ond largest cryp­tocur­ren­cy in the cos­mos, has been plan­ning to switch the con­sens process from the ener­gy-hun­gry Proof-of-Work to Proof-of-Stake. This is expect­ed to make trans­ac­tions cheap­er, dras­ti­cal­ly reduce ener­gy con­sump­tion, and also allow cryp­tocur­ren­cy to be staked. In 2021, the course was set with 3 major updates, but the intro­duc­tion was post­poned by sev­er­al months. The tran­si­tion will there­fore prob­a­bly take place in 2022 and holds the chances for Ethereum to con­tin­ue to hold its own against the competition.

With upgrades already made to improve trans­ac­tion pro­cess­ing and expect­ed to improve fur­ther with the move to Ethereum 2.0, plus the increase in NFT sales, which are pri­mar­i­ly processed on the Ethereum blockchain, Ethereum could out­per­form Bit­coin again this year.

With Solana being the faster, Car­dano the more scal­able, and Polka­dot the more inter­op­er­a­ble than Ethereum, it will also be excit­ing to see if these chains can shake Ethereum’s dom­i­nance in 2022.

 

Decen­tral­ized Finance

The decen­tral­ized finance sec­tor (DeFi) has grown spec­tac­u­lar­ly to a total val­ue of more than $200 bil­lion in 2021, accord­ing to Yahoo finance, sup­port­ing the growth of the broad­er cryp­to market.

Payc­er UG founder & CTO Nils Gregersen in Ham­burg, Ger­many says “DeFi will still be a top­ic in 2022. We’ve only seen the tip of the ice­berg in terms of DeFi,” and empha­sizes, “There will be many new prod­ucts com­ing that we can’t even imag­ine today.”

Indus­try experts expect the mar­ket to con­tin­ue to grow in 2022. In par­tic­u­lar, var­i­ous sub­sec­tors with­in the DeFi sec­tor such as liq­uid­i­ty min­ing and yield farm­ing to decen­tral­ized autonomous orga­ni­za­tions (DAOs), decen­tral­ized exchanges (DEX­es), and non-fun­gi­ble tokens (NFTs) are in focus here.

Swarm Mar­kets co-founder Timo Lehes believes that new asset types, reg­u­la­to­ry aspects and insti­tu­tion­al val­i­da­tion are fac­tors that will increase the adop­tion of DeFi in the com­ing year.

 

Bit­coin as legal ten­der adoption

As men­tioned in the last blog arti­cle, the Cen­tral Amer­i­can coun­try of El Sal­vador adopt­ed Bit­coin along­side the U.S. dol­lar as offi­cial cur­ren­cy in the coun­try in 2021. Should El Sal­vador show that accept­ing and own­ing Bit­coin can also be good for the states them­selves, chances are good that oth­er states will fol­low suit. Espe­cial­ly in eco­nom­i­cal­ly strug­gling coun­tries like Argenti­na or even Venezuela, Bit­coin and oth­er cryp­tocur­ren­cies are already used as unof­fi­cial means of payment.

El Sal­vador’s pres­i­dent Nay­ib Bukele, pre­sent­ed on Jan­u­ary 1 via his twit­ter account his own pre­dic­tions for the new year made and pre­dicts that two more coun­tries will adopt Bit­coin as legal ten­der in 2022.