2021 may be the most pivotal year for the industry to date. While 2020 can be defined as the year of construction and preparation, this year the entire industry has made great progress and positive results both in macro indicators and the most important indicators. The number and transaction volume of wallets interacting with dapps is higher than ever, while the demand for NFTs and games has increased significantly. The three main categories of the industry – gaming, NFTs and DeFi have all experienced positive trends and appear to be in an excellent time to continue gaining momentum and consolidating the future.
The NFT space has experienced one of the most impressive expansions overall, with over $23 billion in cumulative transaction volume this year. The integration of proof-of-ownership and intelligent computing processes has revolutionized the way we treat digital art and collectibles. Collectibles such as CryptoPunks, Bored Ape Yacht Club (BAYC) and Art Blocks have become synonymous with the explosive development of NFTs. Hollywood, sports stars, and big brands like Coca-Cola, Gucci, Nike, and Adidas are emerging in this space, offering different levels of NFTs. The appeal of these well-known brands has had a profound impact on the NFT and blockchain industry. In addition, NFTs have also appeared at prominent traditional art auction houses such as Christie’s and Sotheby’s, opening the door to mainstream audiences who are less familiar with the term. NFT being named word of the year speaks for itself.
With all these factors in play, with hundreds of exciting projects launching every day, the demand for NFTs is at an unprecedented level. Marketplaces like OpenSea, Atomic Market, and Solanart became some of the most popular dapps. The value of these assets has risen significantly, with the minimum market value of the top 100 collectibles currently estimated at $16.7 billion. Works from specific collections are seen as a store of value and have sparked another exciting trend: the segmentation of NFTs.
Not only NFTs, but also blockchain-based games have done well during the year. The play to earn trend, led by Axie Infinity, has helped the gaming category attract an average of 1.4 million daily active users today, almost half of the industry’s usage. Most importantly, the societal impact of this trend, especially in emerging economies such as the Philippines or Venezuela, has attracted the attention of influential venture capitalists (VCs) who have poured a value of 40% into the category. billion dollar investment. The funds received will help the team grow further. The proliferation of scaling solutions like Immutable X or Polygon puts the gaming category in a strong position for years to come.
Blockchain-based virtual worlds, as well as all Metaverse-related projects, have experienced a considerable increase in valuation, driven by reports surrounding the Metaverse. Land values in these virtual worlds have skyrocketed, appreciating as much as 500 percent and selling for as much as $2.5 million. The coins that support this are among the top-performing cryptocurrencies, showing the potential of this virtual space.
After 2020, billions of people have flocked to DeFi, and the category has shown an evolutionary and more mature trend. While Ethereum still dominates DeFi, the notoriously high transaction costs and low scalability issues have led to more attention for DeFi on other blockchains. There is also an important trend emerging in DeFi as influential DeFi protocols extend their capabilities to multiple chains in the so-called multi-chain paradigm. dapps like Aave, Curve, and SushiSwap, and helping networks like Polygon make an impact.
At the same time, blockchains such as BSC, Solana, Avalanche, and Terra have solved the above problems by becoming an alternative to Ethereum, thereby consolidating their position as DeFi power chains. BSC’s PancakeSwap drove usage of the Binance-branded network past Ethereum in mid-February and became the most used dapp considering on-chain data. In the second half of 2021, Solana and Avalanche have made a presence with attractive DeFi suites and smooth user experience (UX) with their native wallets and dapps. The talk surrounding a particular blockchain known as the Ethereum killer is fading away. Each blockchain has advantages compared to other blockchains, forming a complete ecosystem.
Without a doubt, the top blockchain category has had its best year yet. Still, the industry faces significant challenges that need to be acknowledged and addressed. Security concerns were one of the most critical hurdles, as $1.9 billion was stolen due to hacking, exploits or simply bad practices. As cryptocurrencies and other blockchain projects continue to advance, regulation is expected to be the next big issue to tackle. Finally, there are more blockchain users than ever before. Some platforms have had problems as their respective infrastructures cannot keep up with the growing demand. As mass adoption advances further, leading dapps should be ready to welcome millions of users in the coming months.
In 2021, the blockchain industry expands in different verticals; the number of daily unique active wallets connected to dapps has increased by a factor of 7, reaching an all-time high of 2.7 million by the end of 2021.
The NFT market had its best year ever, with over $23 billion in trading volume and a minimum market cap of $16.7 billion for the top 100 NFT collections.
In the news of Facebook’s rebranding as Meta, the metaverse went mainstream; the blockchain virtual world generated over $500 million in transaction volume and reached an all-time high market cap of $3.6 billion.
Led by Axie Infinity, the revolution of making money by playing games has reached new heights; 49% of the industry’s independent active wallets (1.4 million) are related to blockchain games, driving the NFT transaction volume of games to 4.5 billion in 2021 Dollar.
The DeFi space has welcomed new Ethereum competitors such as Solana, Avalanche, and Terra; the industry’s TVL has grown 7x year-over-year to over $200 billion, with nearly 60% still concentrated on Ethereum.
The blockchain industry has taken a big step toward mass adoption; high-profile VCs, brands, and celebrities have joined the field, attracting more than $27 billion in capital flows to cryptocurrency and blockchain companies.
Development of Dapps
Usage in Industry
Regulatory and Safety
2.7 million unique active wallets use dapps every day
In 2021, the dapp industry is showing clear signs of organic growth. As of this writing, more than 2.7 million unique active wallets (UAWs) are connected daily to blockchain dapps hosted on any of the more than 30 blockchain protocols tracked by DappRadar. Compared to 2020, the number of UAWs interacting with dapps has increased by 592%. Growth is ongoing.
The first key upward trend came in April, when the number of daily unique active wallets rose from 630,000 to over 1 million, a 67% increase. Two blockchains are the main drivers behind the surge in usage. Binance Smart Chain (BSC), launched by PancakeSwap, emerged as a solid alternative to Ethereum’s high transaction fees. At the same time, Alien Worlds by Wax also brought the dapp to the market. These two dapps gained attention early on. Both remain among the most used dapps in the entire industry.
Usage in the industry continued to rise, but the crypto market suffered a major meltdown in May, hours after a controversial tweet erupted over environmental concerns. Base cryptocurrencies, including bitcoin and ethereum, fell 33 percent, causing usage in the sector to be hampered. Liquidation events take place in all DeFi dapps, the most important one of which takes place on BSC’s Venus. Nonetheless, after nearly two months of stagnant growth, the play to earn and GameFi trends began to take shape at the end of July, supporting the growth of the gaming industry.
Thanks to dapps like Splinterlands that make money playing games, and GameFi options like CryptoBlades, blockchain games are starting to attract more users than their counterparts. In the first seven months of 2021, DeFi is the category with most UAW connections. However, at the end of July, we saw the aforementioned trend. The gaming category is starting to dominate, accounting for almost half of all industry activity.
In the first half of 2021, DeFi accounted for 57% of overall industry activity, while NFTs and games combined accounted for 32%. In August, the dominance of the gaming category began to emerge, with 49% of the industry’s markets connected through gaming. At the time of writing, gaming accounts for 51% of industry usage, while DeFi accounts for 37%.
The industry has grown 765% year-over-year and has seen widespread adoption in the most critical categories. In addition, Bollywood’s expansion into new territories such as the Indian market and monetization through gaming globally are encouraging signs of expansion.
The Philippines is a good example where Ronin’s mobile wallet has an opportunity to attract users in a country where 25% of the population is unbanked. All in all, this is quite a positive sign in terms of usage and a valuable opportunity for mass adoption in the coming months.
Industry competition intensifies
At the time of writing, DappRadar currently tracks more than 30 blockchains, which is a significant increase from the 16 blockchain networks tracked during the same period last year. This is yet another example of the expansion of the industry. Last year, Ethereum’s dominance in different verticals was strongly demonstrated, especially in the DeFi and NFT space. Nonetheless, other blockchains are starting to attract users with their respective offerings due to well-known transaction speed and cost issues.
Layer 1 and 2 solutions and sidechains become the basis for the development of interesting DeFi and gaming money making dapps. Layer 1 networks including BSC, Solana, Terra, Avalanche, Hive, and Wax have found their way to providing a strong alternative to Ethereum. Meanwhile, Layer 2 solutions like Polygon, Arbitrum, and Immutable X avoid high transaction fees while still connecting to Ethereum and its underlying security infrastructure. Additionally, the Ronin sidechain has surpassed Axie and will be a significant player in emerging economies that will appeal to the masses.
While some blockchain alternatives, such as Terra and Arbitrum with DeFi, or Hive, Wax, and Immutable with gaming, are focused on just one category, most of these networks have become complete systems that support the overall product ecosystem. At the same time, competition is more open than ever, which should be seen as a healthy trend across the industry.
2021: The first year of NFTs
2021 will be remembered as the year NFTs were introduced to the masses. Although NFTs were conceived in 2014, NFTs did not start to have a noticeable impact until 2022. In 2021, the NFT space will generate over $23 billion in transaction volume. Important trends such as randomly generated collectibles, the participation of mainstream celebrities, or the rise of monetization in games were the main drivers behind the record-breaking year for NFTs. The recent metaverse craze is the icing on the cake.
In February, Dapper Labs’ NBA Top Shot transaction amounted to $226 million, accounting for 46% of the record NFT transaction volume. The next wave of Ethereum NFT collectibles is also to follow, and it is necessary to emphasize that Flow’s collectibles are a key NFT catalyst this year, and will also be a sign of future NFT development. At the time of writing, NBA Top Shot is the fifth-most-traded series of all time, with over $747 million in transactions.
In the first 6 months of 2021, the NFT space generated a record transaction value of $2.5 billion, breaking previous figures for the field. However, in the third quarter everything changed. Over the course of several months, we have seen projects with strong communities, teams, and value factors solidify their blue-chip status, with the NFT market reaching $10.7 billion in trading volume over the period. Projects like Art Blocks, CyberKongz, Loot and Cool Cats have created an amazing market.
The value of NFT collectibles is significantly appreciated in 2021. Collectibles are no longer simple NFT items. Some have become exclusive brands that will become more relevant as the metaverse becomes more mature. Considering the collection of the top 100 NFTs by historical trading volume, we estimate the market cap of NFTs at $16.7 billion at the time of writing.
Next, we analyze the aforementioned trends that have contributed to the integration of the NFT market into its current form.
Randomly generated items
In January, a project called Hashmasks can generate NFTs randomly without knowing what the owner will get. This provides the blueprint for almost all NFT projects that will be launched afterward. Randomly generated NFTs present a truly innovative form of expression that positively impacts the entire art and NFT collectibles industry. Based on machine learning algorithms, NFTs metadata is automatically generated based on a set of predefined attributes and randomly distributed. At the time of issuance creation, users don’t know exactly what they bought, and depending on the rarity of each piece, NFTs become a kind of lottery. Although all elements of the collection are generated, they are being distributed, and the metadata will be displayed in order at a specific moment after the sale is complete.
The intersection of celebrities and brands with NFTs
Celebrities such as SouljaBoy, Steve Aoki, and Rob Gronkowski entered the NFT space at the beginning of the year, paving the way for the most pivotal period in the field to date. Over the next few months, mainstream media scrambled to cover NFT headlines after Paris Hilton, Eminem, and Stephen Curry joined the field. This trend became even more pronounced when NFTs debuted at Christie’s, when Beeple’s 1/1 artwork “everyday: the First 5000 Days” sold for $69 million. Over the next few months, other 1/1 art NFTs and works from the CryptoPunks and BAYC collections were sold for millions of dollars at Christie’s and Sotheby’s.
In mass promotions, celebrities and brands have a strong voice. The participation of these names in the NFT space is a strong indicator of the category at the macro level. Fashion giants Gucci, D&G and Burberry also made appearances in the field after launching their respective collections. Coca-Cola partnered with Decentraland to build unique wearables, while PepsiCo launched its first 1,893 NFT products. VISA publicly announced the purchase of CryptoPunk #7610 on August 23, expressing its support for NFTs, cementing the series’ status.
Arguably one of the boldest moves of the year came in the second week of December, when Nike announced its acquisition of RTFKT Studios. The blockchain-native fashion store has been known for its digital fashion in the Metaverse, collaborations with artists, and selling exclusive physical merchandise to NFT owners. The acquisition also pulls big brands like Nike into the crypto culture camp.
In May, Larva Labs kicked off another important trend in the NFT space — adding value, making CryptoPunk owners eligible for an airdrop of Meebits. This has resulted in a significant reassessment of the Larva Labs collection and cemented the team’s position as one of the most important players in the NFT space.
Additionally, CryptoPunks preset cultural and historical values convert these pixelated NFTs into actual store-of-value units. Especially after the VISA acquisition. In 2021, the average selling price of CryptoPunks has increased by 4,580%, and the average selling price is currently $365,000. CryptoPunks is the second most traded collectible of all time, generating over $2.28 billion in transactions at the time of writing. The series’ base price has risen to 73 ETH ($321,500), with Punks selling for as much as $10 million.
NFT projects become community-driven brands
BAYC is probably the most critical NFT avatar project other than CryptoPunks. Launched by Yuga Labs on April 30, the collection has been a hit on social media platforms. Bored Apes started being used as an avatar on Twitter, and there was a new sense of community. With celebrities like Alex Ohanian, Steph Curry, and Von Miller joining the project, along with robust utilities and a complete roadmap, help BAYC become another series that rises to become a real store of value unit. At the time of writing, the base price for the series is 50 ETH or $2 million.
Yuga Labs and its BAYC are an example of a team that has established itself as a brand. The owner is proud to be part of the metaverse and have a strong influence in it. In some cases, these added values go beyond members actually living their lives wearing their wares on the street. Teams like Yuga Labs, Larva Labs or RTFKT are no longer simple teams. The recent collaboration between BAYC and Animoca Brands, or the collaboration between RTFKT and Nike, bears this out. These partnerships have established themselves as trusted brands that represent the ideals of Web 3.0.
Finally, an important intersection between NFTs and play to earn. The presence of in-game items and virtual parcels is a key factor in the record transaction volume of NFTs. With the development of blockchain games and the metaverse, the logo of gaming NFTs will become more visible. During the impressive third quarter, cumulative NFT sales exceeded $10.7 billion, with gaming NFTs accounting for 22% of total sales. This is just the latest example of the enormous flexibility that NFTs offer.
The far-reaching impact of playing games to make money
2021 is not just the year of NFTs. Blockchain-based games are widely promoted and account for almost half of current industry usage. Different blockchain alternatives have emerged, which are sufficient to host the game running. An industry-wide ecosystem enables to remove the burden of high transaction fees without compromising speed. Networks like Wax, Ronin, BSC, Immutable and Hive became the choice for many play to earn and GameFi.
Blockchain games are nothing new. Still, the monetization model of gaming is also attracting record audiences in 2021. Mainstream media has expanded its reach by reporting on the social impact of making money from gaming in emerging economies. Likewise, high activity has attracted the attention of VCs, who have invested record amounts of money in 2021.
The Rise of Axie Infinity
No other dapp has had such a profound impact on the industry as Axie Infinity. Developed by Vietnamese studio Sky Mavis, Axie Infinity is a game-money dapp in which players can use Axie NFTs to engage in in-game battles and breed new Axies, or collect game items for different purposes. The game features a fully integrated token economics framework that allows players to earn income in the form of AXS and SLP tokens.
This monetization factor has had a major impact on emerging economies such as the Philippines. The positive impact on our society, coupled with the move to the Ronin sidechain, has resulted in a massive increase in dapp usage and value.
Axie had about 20,000 daily active users in March. This is understood as off-chain data, i.e. the wallet can play the game without being connected. At the time of writing, that number has surpassed 2.5 million. This means that its user base has grown by 12,400% in nine months.
In addition, the on-chain activity of dapps is also showing signs of substantial growth. In the fourth quarter, about 105,000 UAW users connected to the game every day. This was a 59% increase from the third quarter and a 1,422% increase from the second quarter.
In addition, Axie NFT became the largest collection of NFTs ever traded, with an all-time trading volume of nearly $4 billion. In the third quarter, Axie accounted for 19.5% ($2.08 billion) of the record $10.6 billion in NFT trading volume during the same period. The rise of Axie is nothing short of amazing.
Tokenomics is critical to play to earn success
Without a doubt, Axie is a great contributor to the gaming space. But in other networks, play to earn and GameFi dapps also had a significant impact. Like Axie, these games have attractive token economics designs that incentivize passive income factors.
Splinterlands, a game on the Hive network that earns money by trading cards, has become the most popular game based on on-chain activity, with over 350,000 UAW users participating every day. The team behind Splinterlands launched the SPS token in late July, which has boosted the game’s activity since. SPS, as the governance token of the game, can be obtained through battles.
Since the launch of the SPS, the player base has soared 1,406% and transaction volume has surged 448%, reaching 1.65 million transactions in the third quarter. While the development of the game is tied to the token, the team behind the game has done a lot of continuous improvement and development.
Alien Worlds is another blockchain-based game that benefits from its native token. Mining and exploring GameFi dapps have become one of the most popular blockchain games in 2021. Running mainly on the Wax platform, the game quickly attracted thousands of users by offering Trilium (TLM) as a mining reward. The GameFi dapp has more than 235,000 daily users, and its user base has grown by 2,594% since the first quarter.
These are a big reason why gaming has surpassed DeFi as the most used category in the industry. Both projects have solid economic designs. The token economics of games is one of the most critical factors in the field of game monetization. The situation shown by Alien Worlds and Splinterlands. Also present in BSC.
Starting with a stable DeFi product, BSC slowly becomes GameFi’s ground in 2021. BSC became a lively favorite after Alien Worlds and Axie Infinity were consolidated as top gaming options at the end of July.
The first BSC game with high usage on the Binance-branded network is CryptoBlades, a battle game where users can earn SKILL, the in-game currency.
In August, CryptoBlade became the most popular game measured by the UAW alone. On August 6, it peaked with 406,000 unique active wallets connected to the gaming dapp, however after that, it started to go downhill, with gaming usage dropping by 95% in September. This negative downward trend is closely related to the price of SKILL, which suddenly dropped by 95%, resulting in a negative reputation.
A similar situation has occurred in other BSC games. Recently, CryptoMines was forced to shut down after the price of the game’s native token, ELEMENT, plummeted 99% in three days.
While BSC games may be losing credibility, one game stands out: Mobox. Mobox is a gaming dapp with a lot of DeFi functionality embedded in its game mechanics, and it also incorporates NFTs as playable characters. It’s a true representation of GameFi. Mobox has managed to retain its user base and is currently the fifth most popular game in the industry, attracting an average of over 24,000 UAW users per day. It remains to be seen whether other BSC GameFi projects can retain their player base like Mobox.
Venture capital firms invest $4 billion in blockchain games and infrastructure
The latest “play and earn” craze has attracted investors’ attention. After investing just $80 million in 2020, VCs have invested a record $4 billion in blockchain gaming in 2021. In 2021, investments in blockchain games and their infrastructure will increase by 5,000% from the previous year.
The trend started with a strong investment. Following the impressive performance of NBA Top Shot earlier this year, a group of angel investors, including Will Smith, Michael Jordan, Stefon Diggs, led a $350 million investment in Dapper Labs and CryptoKitties, the teams behind the NBA series, Including the popular NFT breeding game CryptoKitties.
Investments in the second half of the year are more valuable. French startup Sorare raised $680 million in September, led by SoftBank and soccer stars Gerard Piqué, Ferdinand and Antoine Griezmann. In the same month, Layer 2 network Immutable X raised $77 million in funding, while Dapper Labs secured another $250 million investment.
Other investments that have occurred since then include a $161 million round in Sky Mavis, a $65 million round in Animoca Brands, a $93 million round in The Sandbox, and a sizable $750 million round in Forte , Forte is a platform designed to support layer 1 and layer 2 solutions for blockchain-based game development.
The record amount of capital invested in the sector is just another sign of its positive outlook. Not only will these groups have more financial muscle to continue to grow, but the individuals behind some of these investments will provide these groups with an invaluable resource of knowledge.
2022 will be even bigger
After a strong 2021, the future of earning while playing looks even brighter. The large amount of capital raised has undoubtedly provided the team with the capital to continue developing and improving its existing product. But perhaps more importantly, the masses are starting to realize the power of NFTs and make money by playing games.
By 2022, existing games will have additional game mechanics enabled. An example is Axie Infinity’s virtual land Lunacia, which will unlock additional game mechanics and provide landowners with additional benefits in a leading gaming dapp. One of the most important virtual worlds, The Sandbox is currently in Alpha and is expected to continue moving forward in 2022. Meanwhile, Splinterlands could also be involved in virtual land sometime next year.
In addition to the gaming dapps that have been launched, much-hyped projects are also wrapping up their development phase. Illuvium is an open-world RPG game expected to launch in 2022. This is a AAA game that will run on Immutable x. Other Immutable games to watch include trading card game Gods Unchained, mobile Guild of Guardians and action MMO Ember Sword.
Upcoming Play and Earn Games (Ember Sword, Illuvium, Mirandus, Aurory)
Solana is another network that will launch the highly anticipated game in the next year. Star Atlas is a AAA-level open-world space exploration strategy MMORPG based on Unreal Engine 5 developed by Epic Games and one of the most anticipated games. This play-and-earn dapp will involve a complete economy backed by well-designed token economics, and has received a multi-million dollar investment led by Animoca Brands. While full gameplay is not yet available next year, minigames and virtual world exploration will be available in 2022.
Other Solana games worth checking out include Aurory, another RPG featuring PVE and PVP monster battles, and integrated tokenomics. Cryowar, another game that relies on Unreal Engine, aims to be a real-time multiplayer PVP arena NFT game. Project Seed, an action RPG game involving an interesting tokenomics framework, will be the basis for future gaming DAOs. Finally, Ninja Game, another ARPG, will stir the nostalgia of old Diablo players.
Another network that needs to be closely monitored is that managed by Gala Games. The startup, led by Zynga co-founder Eric Schiermeyer, is focused on building truly decentralized blockchain games. Gala community members can have nodes that will eventually become their decentralized network. So far, the startup has only launched Town Star, which is also a play-to-earn game that rewards players with GALA, the network’s native token, and Town, the game’s token. In addition, Gala will feature Mirandus, a fantasy RPG that is one of the most anticipated games of 2022. Gala will also run arena game Spider Tanks, space adventure game Echoes of Empire, tower defense game and, most recently, the Walking Dead game.
Metaverse-linked assets soar to unprecedented value
Thanks to the success of NFTs and blockchain games, the future of the metaverse and virtual worlds is already bright. The overall outlook is even more positive after Facebook announced the rebranding.
NFTs and cryptocurrencies associated with Metaverse projects have undergone rigorous value assessments, and demand for such dapps has surged in recent weeks. For example, in the fourth quarter, the NFT transaction volume of virtual world dapps has exceeded $330 million, involving more than 50,000 unique traders. Trading volumes were 155% higher than the previous three quarters combined, while the number of independent traders also doubled.
Without a doubt, virtual land NFTs are one of the most attractive aspects of the blockchain-based metaverse. These NFTs allow owners to build experiences that inspire creativity and imagination while embracing decentralization. They also unlock the monetization aspect, as these virtual plots can be rented out to third parties or simply used as a rentable investment.
The value of virtual plots has skyrocketed since Meta was released. One of the big players in the metaverse, the average price of virtual land in The Sandbox has risen nearly 500% since the end of October. The average transaction price for virtual land on The Sandbox in November was $14,800, a significant increase from the average sale price of $2,500 in October.
Similar situations are observed in other blockchain virtual worlds. Decentraland, a blockchain virtual world that has been running since 2017, has also grown the value of its plots. The value of virtual land in the platform rose 116%, with an average transaction price of $25,000 in November. Meanwhile, CryptoVoxels digital land sold for 25% more than the price registered in October.
In addition, the two highest sales of land NFTs in 2021 occurred in November. Fashion Street Estate in Decentraland sold for 618,000 MANA or $2.42 million, while the Axie Infinity Genesis Plot sold for 550 ETH or $2.33 million.
Finally, virtual land significantly increases the value of the entire NFT market. In October, the minimum market capitalization of the top 100 NFT projects was estimated at $16.8 billion, of which virtual land accounted for only 8%. A month later, the market value of virtual real estate rose to $4 billion and now accounts for at least 25% of NFT’s minimum market capitalization.
Explosive Growth of Metaverse Tokens
Like virtual real estate, the cryptocurrencies that underpin metaverse-related projects, including several dapps, have surged in value over the past few weeks. Despite recent signs of decline in the cryptocurrency market, Metaverse tokens, including those supporting blockchain gaming, are still outperforming most of their peers.
GALA, the native token of the Gala Games ecosystem, has been one of the best performing assets in the blockchain industry and any other industry globally. GALA is valued at 31,500% this year, easily surpassing any type of asset. Axie Infinity’s governance token, AXS, also performed well. In 2021, despite the recent market decline, AXS is still valued at over 20,800%.
The assets that back virtual worlds are also among the most profitable. SAND, The Sandbox’s governance token, hit a new all-time high of $8.40, up 14,000% since the beginning of the year. Somnium Space’s native token, CUBE, surged 4,700% in price, while Decentraland’s native and governance token, MANA, jumped 4,600% over the same period.
The metaverse will be a parallel reality where we socialize, trade, play, and even work. This space will change the way we currently live, as it can create a whole new economy to meet the evolving digital needs and preferences of a virtual society. Although the metaverse looks complete, it still has room to grow. The recently launched WorldWide Webb has laid the foundation for an interoperable virtual world. In this space, virtual NFTs from different projects can access the functionality of the game. All in all, the metaverse and the monetization model of games will continue to dominate our growing industry.
$189 billion in assets locked in all DeFi protocols
Although the impressive expansion of the NFT and gaming categories is often overlooked, the performance of DeFi in 2021 is also very positive. After 2020, DeFi has become the most critical category, showing a growth trend. At the time of writing, the industry’s TVL was $189 billion, up 767% from the previous year.
Two key trends are observed in the DeFi space in 2021. First, hindered by the Ethereum infrastructure, several DeFi dapps like Aave, Sushiswap, and Curve have extended their services to multiple networks simultaneously in the so-called multi-chain paradigm. This trend has paved the way for other blockchains to make progress in this space. Ethereum’s TVL has grown by 455% year over year and is now at $115.2 billion. While the Ethereum network still dominates the DeFi space (~61% of industry TVL), related blockchains have also exploited Ethereum’s limitations to grow.
BSC quickly positioned itself as a DeFi alternative, attracting millions of users mainly due to panakeswap’s friendly interface. PancakeSwap, the most used dapp based on on-chain data, has played a key role in helping BSC position itself as the second blockchain in terms of TVL ($21.9 billion at the time of writing). While BSC DeFi dapps like Venus suffered severe liquidations following the crypto market crash in May, BSC has recovered some usage and value lost after adverse events. Dapps such as lending protocol Alpaca Finance, and a series of Dapps following PancakeSwap’s recipe for success, have helped BSC build a strong position behind Ethereum.
After losing the crown of the highest usage category, the DeFi space slowly recovered in the third quarter. The high usage of Solana and Avalanche has boosted the overall usage of DeFi. In Q3, DeFi dapps were used by more than 655,000 unique active wallets on a daily basis, representing 39% of the industry. In the fourth quarter, that usage increased by 47%, and games now still account for 44% of the industry’s activity.
To be precise, Solana is one of the best improved blockchains in terms of TVL. The launch of DeFi dapps such as AMM Raydium, DEX Serum, Sunny, Saber, Orca and Solend in 2021 makes Solana one of the most diverse DeFi in the space. Coupled with a practical and feature-friendly wallet, Solana exceeds expectations. Solana’s TVL crossed $10 billion in October, posing a serious challenge to BSC’s No. 2 position. As of this writing, Solana is the fourth largest blockchain in terms of TVL, valued at $11.3 billion.
After holding about $200 million in TVL for six months, the Avalanche network’s metrics ballooned to its current $10.9 billion. The main reason is the launch of a $180 million liquidity mining program that includes popular DeFi dapps like Curve and Kyber, as well as Avalanche’s own Trader Joe. Avalanche’s TVL surpassed $2 billion in August and has been growing ever since. Avalanche battles Terra and Solana for the third spot in DeFi, behind BSC.
The existence of scaling solutions in the DeFi space is becoming more and more apparent. Polygon, Ronin, Arbitrum and other blockchain alternatives now have attractive DeFi options where users can collateralize assets with Ethereum without incurring high transaction fees. This trend also suggests that Ethereum will eventually become a whale network as gas fees cross a certain threshold.
Ronin’s case is worth revisiting. Going forward, Ronin should not be seen as a sidechain that Axie Infinity runs on. With the launch of Katana DEX, Ronin becomes one of the most exciting networks in the industry. Especially considering the potential of the Ronin mobile wallet. Katana holds more than $1.25 billion in TVL and could challenge Polygon next year.
Despite living in the shadow of NFTs and gaming in 2021, the DeFi space has greatly improved into a more mature, competitive and complete ecosystem. Still, there is room for improvement, especially when it comes to safety.
Despite the impressive performance of blockchain in major areas, the dapp industry currently faces some challenges that need to be addressed.
Due to its encryption mechanism and decentralized infrastructure, blockchain has one of the most secure technological frameworks ever created. Nonetheless, flaws in smart contract code, wrongdoers, or simply poor security practices can lead to bad outcomes and negative consequences.
According to Rekt’s database, more than $1.9 billion has been lost in 161 attacks in 2021. In the long run, a total of $575 million has been stolen over the past five years. Its value is attracting wrongdoing, so it needs to be mitigated.
These incidents include smart contract vulnerabilities, flash loan hacks, and exit scams, among others. The most famous one may have occurred in August, when a hacker used an Ethereum DeFi dapp called Poly Network to steal $600 million in the largest cryptocurrency theft in history. Although the money was returned by the attackers in an odd twist, the message was clear. Leading cybersecurity practices need to be embedded into the industry, especially in the DeFi space, where vulnerabilities are at greater risk and where most of the value is concentrated.
While these hacks and vulnerabilities make headlines, blockchain users have lost valuable assets and should be aware of common security good practices. Protecting your coins with a hardware wallet, doing your own research before investing, avoiding clicking on suspicious links or sharing private keys with others are all examples of good security practices that are easy to do.
A growing number of security concerns, including breaches and fraud, point to the urgent need for enhanced regulatory activity. Not only to protect blockchain users, but to increase trust within the industry.
What may have been overlooked at first, regulatory issues became a global priority. This is true of the Securities and Exchange Commission in the United States, the European Commission in the European Union, and local authorities in other Asian and U.S. economies.
In 2021, the SEC failed to properly address the need to regulate the industry. U.S. authorities have been cautious and strict with cryptocurrencies and have historically denied creating crypto-based ETFs. Geographical restrictions on U.S. citizens need to be monitored because they are denied the right to participate in routine activities such as airdrops, or even the opportunity to play games to earn money. The next wave of digital-led finance looks set to develop outside the US.
The legal status of cryptocurrencies worldwide; source: World Economic Forum
In Europe, regulation around the industry is more specific. Perhaps driven by the conceptualization of a potential digital euro. The European Central Bank (ECB) and the European Commission have participated in discussions on this topic. Additionally, the European Blockchain Partnership, in collaboration with the European Commission, is expected to launch a pan-European regulatory sandbox sometime in 2022. Clearly, the Eurozone is far ahead of the US market.
In Asia, meanwhile, the situation is more dire. China has banned Bitcoin mining several times, and 2021 will be no exception. All crypto-related activities are considered illegal in China, which may clear the way for a digital yuan. In India, this approach is also limited. However, Indian authorities and policymakers have reportedly made progress in regulating such assets.
On the other hand, the Southeast Asian region has made some progress in cryptocurrency regulation. Singapore is a country that accepts cryptocurrencies and has a framework in place. The Monetary Authority of Singapore has adjusted the Payment Services Act (PSA) to reduce the financial risks associated with such assets. Another country with close ties to the industry, the Philippines, has implemented guidelines governing digital assets.
Regardless of geographic location, regulation is particularly important for DeFi, which mirrors the traditional financial industry to some extent. Additionally, DeFi is where most of the industry’s value is locked. One particular topic that has caught the attention of regulators is stablecoins, assets that are one-to-one pegged to the U.S. dollar or any other stable asset. Their use in DeFi is widespread. The concern for regulators is whether the liquidity reserves of stablecoins such as Tether, USD Circle, Pax and others are sufficient to warrant an increase in the supply of these assets. A digital bank run is possible, and the collateral effects of such a situation will be detrimental to all progress made by the industry.
All in all, regulation will definitely help the industry in the long run. The early road may not be smooth. There is a big gap between the regulated environment and the current ecosystem, as some dapps, organizations and their underlying tokens do not fully follow best practices. Nonetheless, it is important to start building a consensus regulatory environment. This situation will bring a sense of trust to the industry, as institutions and ordinary users will have more confidence when using any dapp that complies with the proposed regulatory framework.
When it comes to intellectual property, blockchain technology offers a plethora of applications. This includes: tracking the origin of items, authenticating individuals, and of course managing registrations and licenses. At the same time, intellectual property poses some challenges for the industry itself.
One of the premises of Web 3.0 is usability. Some decentralized applications make their code available to the community. In this way, people around the project can continue to build to optimize their product. At the same time, it is not uncommon for some projects to raise millions by copying these established dapps. In blockchain, there is only a fine line between a “copycat” and a fork, but there is still a clear distinction between a fork that helps the community and a “copycat” that simply changes the logo and publishes a product created for itself .
A well-known case occurred when Sushiswap forged the Uniswap V1 contract and carried out a vampire attack, resulting in the loss of millions of dollars in liquidity. So far, Uniswap V3’s contracts have been licensed to protect them from intellectual property theft. Something similar happened to Aave. In the latest governance vote, Aave token holders decided to license Aave V3’s upcoming lending contracts.
Aave V3 Contract Governance Vote Results; Source: Twitter
While “licensing” itself goes against the open-source spirit of blockchain and DeFi, it does protect some developers’ hard work from copycat projects. And these knockoff projects are in most cases not fully aware of the functionality of the products they steal. Ideally, over the next few months, we’ll have a compromise where those individuals who really want to optimize the product can be approved to stay involved.
The industry is constantly evolving and there are more users than ever before. Nonetheless, leading projects must continue to meet their challenges and continue to make their user base a top priority.
NBA Top Shot surged in popularity in February. Unfortunately, there were some issues with the project’s platform due to poor user experience due to high demand. Over the next few months, the user base of the Dapper Labs family declined slightly due to the aforementioned issues.
On the other hand, there is the example of Sky Mavis. Due to the popularity of Axie Infinity, players have experienced problems connecting to the site due to high traffic at various times of the year. The Sky Mavis team responded quickly and has been active on social media platforms Twitter and Discord. Not only has the game maintained its user base, but it has also earned over 2.5 million DAUs. Sky Mavis is constantly improving the game and is a great example of a dapp with a reasonable retention rate.
Individuals unfamiliar with the technical capabilities of blockchain can easily be misled by the technology. Take the most mainstream narrative: it revolves around the idea that blockchains and their underlying use cases, such as NFTs and gaming, pose a threat to the environment.
In fact, the proof-of-work (PoW) consensus mechanisms used in the first iterations of blockchains like Bitcoin or Ethereum are far from energy-efficient. The annual energy consumption of Bitcoin is equivalent to the energy consumption of a country such as Chile or Switzerland for an entire year. However, this mechanism is less used due to its operational flaws such as low speed and low scalability.
Almost all current dapps rely on other consensus mechanisms, such as Proof of Stake (PoS) and Proof of Authority (PoA), as well as other mechanisms that are more efficient in terms of energy consumption. Therefore, it is far-fetched to say that NFTs, gaming, and other blockchain use cases disrupt the environment.
It is crucial to disseminate basic information to as many people as possible. This will effectively reduce the number of false assumptions that create a negative perception of the industry as a whole.
2021 Summary and Outlook
2021 proved the potential of the blockchain industry. Its rapid growth is unmatched by any traditional industry. When it comes to the social impact of blockchain dapps, such as Axie Infinity in the Philippines, its experience is comparable to those from Hollywood scripts.
Thanks to the craze surrounding avatars and artistic NFTs, mainstream gaming is finally waking up to the power behind this technology. The $22 billion transaction volume shows the growth in user demand for NFTs, but of course, this is just the tip of the iceberg. The potential of these assets is huge, and their impact goes far beyond the tokens in the industry.
Like NFTs, people are starting to realize the advantages that blockchain-based games bring. The story surrounding play-to-earn and the metaverse is just beginning, and it may transform the traditional model into a new one where individuals have full control over their assets and are in a new decentralized digital community Use your time and operations to make money. The existing intersection between blockchain-based games and NFTs currently allows players to actually own and manage their playable assets. Best of all, they can earn more cryptocurrency by playing games. In this way, it is not impossible for projects around these two themes to experience a rapid development in the future.
While much of the attention has been on NFTs and games, DeFi continues to grow. The blockchain associated with it also has a growing presence, even driving TVL to new all-time highs. Among them, Terra, Solana, and Avalanche have all made great progress, and they can be considered as strong contenders for BSC and Ethereum. At the same time, the need for scalable solutions will increase in the future.
Ethereum, one of the most important blockchains, will undergo important structural changes by evolving into a proof-of-stake network. Layer 2 solutions will host important DeFi and “play and earn” dapp games, getting the security of Ethereum while experiencing dapps. In 2022, this blockchain still deserves our attention.
Finally, while security, regulation, intellectual property, and other related topics do not receive high attention, they will undoubtedly play an important role in 2022. As mass adoption gets closer, the industry should be ready to learn more about these trends.
The following content comes from the views of some partners, top dapps and journalists and their industry predictions for 2022. Note: These views do not represent the position of DappRadar.
Jeffrey Zirlin: Co-founder and Head of Growth at Sky Mavis/Axie Infinity
From Axie’s perspective, 2021 is an incredible year. Over the past year, Axie Infinity has evolved from a gaming concept to a rapidly growing ecosystem and project with an incredibly dedicated community of nearly 3 million DAUs. This player growth, coupled with the launch of our decentralized exchange (Katana), has spurred heavy usage of our Ronin blockchain. Today, Ronin’s transaction volume has grown to roughly 4x the daily transaction volume of the Ethereum chain, and this growth is driving us all to prepare for mass usage in 2022. We plan to expand the team to improve our ability to run parallel functions. This will allow us to reap long-term benefits while juggling game distribution, infrastructure upgrades, and incentivizing third-party development.
Exponential growth also comes with its fair share of challenges. The focus this year is primarily on infrastructure upgrades through Ronin. The big theme for 2022 will be gameplay upgrades and more content releases.
At Axie Infinity, we’re always looking for ways to level up the game and bring a better experience to our community. Battles V2 (Axie Infinity: Origin) is our massively upgraded battle system that lowers the barrier to entry by offering entry-level Axie, making Axie more fun and faster and more convenient for friends and family. Through this new system, more users will be able to fall in love with the game before it officially landed on the system.
On the technical side, we believe in the future for all in-game resources and items to be freely tradable tokens and will continue to do so through our DEX, proprietary sidechains and Ronin mobile wallet. In the future, The Mavis Hub, our platform for publishing games on pc and mac, will be seamlessly connected to our proprietary Ronin blockchain, which will enable game developers to build and publish blockchain-enabled games. We see Axie as a game in a game world built on our technology. One of our visions is to leverage UGC so that the community can build better experiences on top of Axie through the SDK.
Finally, our community base was so strong that we started to introduce them into various DeFi services. Following the success of Katana, the #2 decentralized exchange, we will start offering new financial products to strengthen our user base. For example, we plan to start using players’ in-game wallets directly to issue player cards.
I am interested in social tools that allow dapps to increase user engagement in a scientific way, thereby driving data growth and increasing player engagement.
In 2021, we have experienced a year of unprecedented growth and adoption of cryptocurrencies and web3 technologies. While there is a lot of hype to tease out, the substance behind it has forced the world to take cryptocurrencies seriously. From institutions bringing Bitcoin onto their balance sheets, to NFTs entering the mainstream, to dozens of new EVM-compatible chains, to the prevalence of DAOs, it’s clear that 2021 has been an interesting and wild ride. 2021 will always be a year to remember for ApeSwap. We are very fortunate to be able to seize such an opportunity from the very beginning to build a community that truly trusts us. Nurturing community has always been our top priority, which is the main reason we never stop building.
With all the ups and downs, we’ve come a long way. When we say that the biggest and most important victory we have experienced is the growing global community since our inception, we are sure that we represent all the users behind ApeSwap. We believe that the outlook for cryptocurrencies in 2022 will revolve around the three Ss: sustainability, shakeouts, and sovereignty.
Sustainability and shock go hand-in-hand — now that some of the hype around core DeFi applications and NFT projects is fading, it’s impossible to just fork a protocol and see success. 2022 will bring sustainable token economic models to the table and weed out those who cannot. Furthermore, sovereignty will play a role here, as regulators will no doubt take notice, and regulation will directly affect sustainability and shocks by deciding where and how to establish these agreements. By 2022, ApeSwap expects to capitalize on the expectations within for a shift. Our goal is to be a more sustainable, DAO-centric protocol that scales our ecosystem of service offerings both horizontally and vertically.
We expect three main verticals in 2022: Metaverses, GameFi, and Sustainable DAOs. With the global focus on the metaverse in 2021, it’s no surprise that we’re optimistic about the technology of 2022. The key here is that a true metaverse economy needs to provide digital scarcity. While mainstream players will be committed to capitalizing on this, they will need to rely on crypto-based services to achieve this success.
While GameFi is arguably “taking off” in 2021, these games aren’t doing very well, and game mechanics tend to lag those off-chain. The experience of clicking and waiting for 15 seconds after entering the game is not friendly to players, and 2022 is expected to optimize this experience. The key to real growth is whether game studios can release high-quality products that attract players who are loyal to the game itself, rather than those looking for a “play and earn” experience.
Finally, who can forget DAOs? While “DAO” has been a buzzword since 2017, it’s 2021 that these concepts really take off. The concept of a DAO is starting to take on a whole new meaning, and launching a DAO seems to be the only right way to maintain the protocol in the long term. It seems that more and more projects are realizing this and are on track to realize these advances in 2022. Miracles start to happen when we mix these three next-gen technologies together, so we’re really looking forward to 2022!
Sebastien Borget: COO and Co-founder of The Sandbox
For us, it’s been a year to celebrate, as The Sandbox has been a huge success in 2021. This is the result of accelerated growth in the dapp gaming space, and also thanks to our integration of gaming with the metaverse. On the business side, our results include: 1.1 million users with connected wallets, over $216 million in GMV to date, and a $93 million Series B round that will help us with more upgrades in the future , allowing players, creators, brands, IPs and celebrities to interact with each other through a virtual experience, whether it’s a game, a live concert or a social event. We’ve seen more and more brands and IPs looking to engage with fans in our metaverse, with over 200 brand partners registered to date at The Sandbox, owning virtual LANDs and creating and interacting. This includes Snoop Dogg, who is creating multi-experience events for the Snoopverse, including his mansion, tons of NFTs and avatars, live concerts, and more, as well as entertainment brands like The Walking Dead and The Smurfs, apparel brands like Adidas, and brands like Binance. blockchain brand.
On the gaming side, we opened up alpha testing to players, and it was very exciting to see players interacting in The Sandbox. In terms of how to better play the play-to-earn mechanism and social experience, we have received a lot of high-quality feedback from the more than 20 experiences shared so far, and after years of hard work, we can see that the entire ecosystem is coming in 2022. Fusion when launched.
On the downside, as more and more people realize the potential of blockchain and NFTs, a few (including some in the traditional gaming industry) want to do something about it. I think the fear reaction is understandable when you see changes in your currently successful ecosystem, so we need to continue to explain the benefits to players and creators. This is what I am doing as President of the Blockchain Game Alliance. The Blockchain Gaming Alliance is a non-profit organization composed of 290 key industry members. We just conducted a BGA survey and 43% of our members said education about the core ideas underpinning blockchain gaming is the next hurdle we must overcome.
We envision that within 10 years, the metaverse will profoundly change the way we think about work, socializing, gaming, and more of the economic opportunities and jobs created through it. In 2022, we will see the play-to-earn model appear more fully in gaming dapps. Now, “play to earn” has become a mechanism. This will become a reality in 2022 as more games, including The Sandbox, allow players to “play to earn” (play to earn money).
Again, the metaverse is now firmly established in today’s lexicon, but we’ll see it move more fully from concept to reality in 2022. Speaking of which, we have a lot of exciting things coming to The Sandbox in 2022, including the official release of our metaverse in the first half of the year, players being able to create on the LAND they own, with the release of The DAO, and The advent of staking and voting mechanisms for SAND, LAND, and AVATAR holders, the first virtual concert by Snoop Dogg and other artists, and the launch of partner experiences, etc. We’re also looking to expand from PC to mobile, which will help unlock growth potential in Asia and other regions where mobile is very strong.
By 2022, I believe NFTs will transcend and change the entire culture, media, art, music, gaming, food and metaverse. Gaming is my real focus area. We have companies like The Sandbox that have been preparing for this moment for years as we have built our ecosystem, tools, technology, etc. together. We also have some late entrants like mainstream game publishers who now see an opportunity and are trying to kickstart their programs. Players and investors alike are interested in turning the game Metaverse into (virtual) reality.
I expect major announcements and bold visions to be expressed in 2022, but more importantly, a series of gaming dapps will come online to attract players, and more people will discover the benefits of “playing and earning” games.
Art Malkov: Head of Blockchain Growth at IoTeX
2021 is a year full of opportunities and unleashing potential. Looking back at the progress we have made since the beginning of the year, we can see how fast the industry is growing. At IoTeX, we have achieved many milestones in project development, proving that this global community is realizing what is possible with blockchain. The innovative games of 2021 will enter the user’s field of view, enter the game rankings, and promote their own innovative ideas, which was impossible before. Hearing blockchain, DAPPs, and NFTs being talked about in such a mainstream environment is a testament to their influence and curiosity about the space. At IoTeX, we focus on how to realize the vision of the trusted Internet of Things.
2022 will be the time when projects will truly work together in partnership and collaboration to bring the most innovation and more optimized capabilities to each network. Now that Web3 is gaining traction in the mainstream, the focus will turn to how we can make Dapps more user-friendly, more accessible, and appealing to the general public who may not yet fully understand blockchain. At IoTeX, we plan to launch hundreds of Dapps next year. This means that by providing users with a complete ecosystem of DeFi, GameFi, DEX, etc., to provide users with the best possible experience, and to make users look forward to the year ahead.
One of the top-performing categories in Dapps is “play and earn” games. Not only does it show the interesting, potential side of the field, but it helps people simply understand how they can start to get real rewards and what Web3 really is. With the massive growth we saw in DeFi in 2021, we can imagine how successful it will be in 2022. The most exciting thing about IoTeX is the new category of MachineFi, which connects real-world devices to the blockchain, allowing users to own and monetize them. Of course, this is just the beginning of the emergence of more Dapp categories, and 2022 will be an impactful year for this growth.
Elaine Song: Hedera Hashgraph, HBAR Foundation
Professionally, 2021 is all about creativity. Compared to Okcoin before, I got a new idea in the Hedera ecosystem of the HBAR Foundation, and I wanted to get closer to the innovation that originated from the protocol level. In fact, a lot of the cool use cases that people are exposed to stem from advances in cryptography. It’s hardly a win or a loss, though, but the regulator’s focus on the cryptocurrency space is certainly a positive sign. The fact that there is more scrutiny from regulators means that what we’re doing is working, and I think it’s kind of a surefire way to come of age. More importantly, the community is forming its own views on how to govern and respond in a way that aligns with the core beliefs of cryptocurrencies.
Of course, the Metaverse is also the focus of attention in the coming year! In 2022, I believe that encryption technology will naturally enter the mainstream vision. There are many things in our daily life that could be better done with cryptography, and now that we are in the phase of making that happen, Hedera and HBAR will be at the forefront of this. For us, 2022 will take advantage of HBAR to achieve this and bring a better experience to crypto users.
Regarding the metaverse, I feel like how DeFi now covers all most crypto activities, the metaverse will become more specialized as it grows. It also means that it will innovate in breadth and depth, which I think will be a very important attempt to flesh out this new era of technology and human interaction.
Raindy Lu: Director of Marketing and Communications at Ontology
For me, 2021 has been the most exciting year for cryptocurrencies, as we have seen the ups and downs of the entire market and an increasing amount of serious discussion about regulation in society. The boom in the NFT field can be seen as an important “victory”. Through NFTs, art creators can actually own the copyright of their works, thus avoiding the problem of piracy, an advancement that can only be achieved with the help of blockchain technology. The fly in the ointment is that people only focus on how to make money from NFTs, not the real value of art. To be honest, the motivation of NFT creators is also profit driven.
I think the focus in 2022 will be on Web3 infrastructure, especially Decentralized Identity (DID). The metaverse is a fusion of the real and digital worlds, but how to identify the same user in different DAPPs and how to manage them can be a big problem. Everyone should have a unified DID and bind it to the user’s encrypted wallet address to allow access to NFTs, Verifiable Credentials (VCs) and all encrypted local information. It can even be KYCed if necessary. More importantly, DIDs should be self-created. Based on DID technology, we can further expand more related applications in the future.
Ontology plays an important role as a contributor to the Web3 infrastructure. We’ve spent years perfecting our product and technology, and now we’re launching the Ontology EVM Fund to go beyond what we currently have. Through ONTO Wallet, Wing Finance, OScore, Ontology has demonstrated a real Web3 application to a certain number of real users. We believe that 2022 promises more achievements.
I think the user base of dapps that lack security and decentralization will continue to decrease as users become more sophisticated, especially those related to DeFi. Games are likely to be hot in 2022, as they have attracted a lot of attention from individual and institutional investors. Considering the goal of building a decentralized metaverse, I think this is indeed the genesis year for Web3 dapps such as DID, Reputation, DAO and Metadata dapps. All of the above are powerful tools to attract more people to the field.
Sarojini McKenna: CEO of Alien Worlds
2021 is the year of the rise of blockchain gaming, and we are excited to see it develop. Alien Worlds, Play Earn, and other blockchain games have all been hugely successful, and their appeal and number of users are growing. When Alien Worlds began to enter the field more than a year ago, the concept of NFT was only understood by a few people. And now, NFTs have made their way into auction houses at Christie’s and Sotheby’s, and we can even see some talk about them on The Tonight Show (for example, Paris Hilton and Jimmy Fallon on The Tonight Show). ” to talk about NFTs). This opens the door to more possibilities for NFTs, which can provide various functions and add value to players and the community. We are proud to be an early project to demonstrate this technology, leveraging NFTs as a practical and functional gaming element in Alien Worlds.
The possibility of Alien Worlds in the metaverse in the future is also very interesting to look forward to. With Alien Worlds’ solid foundation, you can see great opportunities for community growth and new users to participate in Alien Worlds mining activities on WAX and quests on BSC. It’s definitely a big win for us to see a community like this emerging around NFT activity, using the tools and mechanics we provide to create our own games based on our own culture and motivations.
It is predicted that there will be large organizations or companies participating in and taking shares in these truly decentralized projects. Because they will realize the power of unstoppable network effects and jump in to achieve greater success.
We look forward to introducing more DAO possibilities, hope to spread the DAO concept to more people, and work on making DAOs more accessible. Decentralization and community are at the heart of our project. We expect to continue executing on our planned roadmap, creating additional features and activities that will allow the many players in our community to grow and develop in entrepreneurial ways. Our metaverse is an existential economy; it is anything that Trilium (TLM) and our NFTs touch, so the possibilities for how our metaverse will grow and how individuals will create and share are endless. DAO, NFT+ games, use NFT to benefit the community. We expect all of this to play a big role in 2022.
Tehn: Blockchain Cuties Community Manager
As a long-running project, 2021 is a big year for NFTs, which means it’s also been a wild ride for us, which is very close to the 2017 ICO hype. It’s been a year of growth, a fresh start for both the wildly hyped NFTs, the visual metaverse, and the many new entrants into the space! Personally, we increase in-game trading volume through trading, new game mechanics and many other key aspects of the game. We’ve had a pretty tough year as a team. We restructured, although it took a little more time than expected. But this year has also been a very productive year for us. Teams are now more responsive, agile, and full of energy and energy. Our team has been working on developing more technical programs to speed up game update time and development time for new features.
In 2021, the NFT space has gone through a phase of super-consolidation, and because of this, the blockchain space has seen rapid growth. Now the blockchain industry is one step closer to the mainstream. Because of this more attention, it’s growing faster, and it’s going to become less incomprehensible to the average user. Many aspects of blockchain trends, such as GameFi, Metaverse, Decentralized Finance, User Identity, and more, are set to grow steadily for the foreseeable future. With the hype, many new projects have been added, but only time will tell who will continue to be here in the years to come.
As a project, we are working on a unique token economy initiative based on the token we launched this year. We are constantly expanding the number of blockchains our game supports. The team is constantly working on the in-game economy to provide the best value to players. In early 2022, we plan to enter War of Cutieland closed beta. We will allow users to flow their assets and even transfer between different blockchains via bridges. Of course, these will also be L1 solutions and multi-blockchain L2 solutions. For GameFi, a lot of the big players are now focusing on this space, and in a way that’s both good and bad. Large and experienced game development companies cover many of the fundamentals such as production process and strategy. In this new and growing industry, such new players will help provide users with better quality products.
On the other hand, because of the rougher look and feel, games with smaller budgets have a hard time entering their potential community and becoming the next hit game, and the bar for initial products becomes higher. With all of this in mind, more projects will significantly improve their marketing capabilities, and more and more marketing companies will have a deeper understanding of how the field works. This result is more helpful to provide more value to developers, gamers and NFT enthusiasts alike.
Robert Miller: Fuse Blockchain Communication and PR
The main direction for 2021 is about partnerships and true interoperability. 2017 saw a lot of hypothetical partnerships. But now, with people actually adopting all kinds of novel new products every day, it’s all about integrating technology as quickly as possible and creating a robust infrastructure to fuel growth. We feel like we’ve done a good job of that. Compared to other projects on platforms like Coingecko, Fuse’s rankings tend to be quite surprising. See all the technologies and products in our ecosystem and it will exceed your expectations. Next, we will further upgrade the ecosystem to increase the opportunities for more people to know us and cooperate with us.
We will see an upgrade in bridging technology as people become more aware that multi-chain is the way forward. In addition, applications in payments are increasingly being used as the b2b industry realizes that it is very easy to do b2b transactions here to avoid bank transaction fees. Projects like Request Network (Invoice) deployed on Fuse will continue to do well. Infrastructures such as The Graph and Pocket Network will continue to spread across the blockchain ecosystem, providing frameworks that make it easier for developers to deploy dapps while ensuring decentralization. The future looks clearer than ever – many real businesses now have clear roadmaps and goals for moving forward. Fuse’s DeFi ecosystem will accelerate growth with the arrival of the FuseFi VOLT governance token, and Fuse’s business services will be improved starting in Q2 thanks to major Studio improvements.
There is a great youth hostel in Lisbon (Lisbon), where I met quite a few non-blockchain young people in their 20s-30s in November. Some people worry that they are missing a big opportunity, but they just don’t know the space yet, and they haven’t been exposed to other crypto exchanges like Metamask. Currently, we are going through a phase where we need to attract more new users. Many products with lower barriers to use, such as Fuse Cash and Dharma, allow people to access through non-custodial, trusted wallets in a simple interface, and it is conceivable that 2022 will be the year when most people first adopt DeFi. At the same time, NFT will still play an important role in this period.
Jay Kurahashi-Sofue: VP of Marketing at Ava Labs (Avalanche Blockchain)
2021 is a new beginning. Brand new Web3 projects emerge quietly, creating new services: “play and earn” games, NFTs as membership tokens, etc. The biggest takeaway for me is the continuous improvement of the Web3 knowledge base. The longer you are actively involved in Web3, the more you will discover new opportunities.
In 2022, the user experience of Web3 user infrastructure such as wallets, fiat entry and application entry will improve significantly. Users can start experiencing Web3 without interacting with technical features. These applications that pursue a seamless user experience will start to lead the way.
Besides digital collectibles, I am most interested in NFTs, especially those related to utility. Membership tokens, property records, in-game items are all early categories based on NFTs. DeFi will also accelerate once new deployments start prioritizing scalable blockchains in their launch strategies.
John Wu: President of Ava Labs (Avalanche Blockchain)
In 2020, we experienced the first real DeFi boom, and in 2021, the DeFi community has proven its existence value and created infinite possibilities through multi-chain construction. It will also be remembered for NFTs entering the mainstream faster than any other use case in blockchain or crypto to date.
In 2022, we will see more development in the GameFi space, as “play to earn” games are not only lucrative but also really fun games that users love to play. I think there is an opportunity for decentralized social media to start having a big impact. For public blockchains, users have yet to find a compelling application with a strong value proposition. That could change in 2022, as skepticism of centralized social media giants grows and people want more control over their data. If a social media dapp is successful, it could be a huge window for more users to enter the blockchain.
Avalanche in particular, I expect that Avalanche will continue to grow rapidly along this trajectory as native applications flourish, Ethereum applications expand to the web, and more businesses and institutions adopt the technology.
I hope everything goes in a positive direction, although this idea is too idealistic. Regardless of market conditions, the blockchain community has amassed more talent and capital than any industry I have seen in over 20 years as a technology investor and venture capitalist. From developers to business development to marketing to communities, everyone in this field has the bold entrepreneurial attitude needed to make significant and lasting change through technology. “
George Tsagkarakis: Founder and CEO of egamers.io
2021 is a big year for the blockchain gaming industry as NFTs and the metaverse gain mainstream attention. After years of innovation and construction, the field has matured a lot compared to 2020, which makes it more convenient for companies to join and build.
2022 will be an extraordinary year, not just for gaming, but for the entire blockchain industry. As institutional investment flows into the industry, we will see significant growth across sectors. This will create more jobs and more people will understand technology and embrace decentralization. Speaking of gamers.io, we plan to expand our service to become a blockchain gaming portal that provides players and investors with all the necessary information they need.
There is no doubt that 2022 will once again be the year of making money and, of course, the year of decentralized finance. With inflation driven by the Covid-19 outbreak, a large number of consumers are concerned and realize they are losing money on the assets they have in the bank. The era of decentralization has arrived.
Rhys Skellern: PR Manager for ECOMI/VeVe
2021 is undoubtedly the first year of NFTs. For VeVe, this means closing the gap between mainstream fans and collectors, as well as developing the new world of digital collections, which we have grown to become the leading mobile platform for digital collections. Along the way, we’ve discovered that fans have as much value and sentiment towards digital assets as physical items (and in many cases more so), and in 2021 alone, we’ve already promoted and launched projects from over 60 brands and artists Content such as Disney, Marvel, Star Wars, Cartoon Network, Universal Studios, Mondo, Givenchy, DreamWorks, DC Comics, and more.
These years of partnerships and announcements have helped validate the entire NFT industry, and the cross-promotion, interactivity and virality of our content has accelerated the growth of VeVe’s user base. In less than 12 months since the product was launched to the public, we have welcomed over 1 million monthly active users, sold over 3 million collectible digital NFTs, and become the highest-grossing entertainment in the global app store application.
However, this growth would not have been possible without a real focus on the community. Nothing is more powerful than the practice of understanding and appreciating your vision and actively working to help you achieve it. Not only has this engagement with the community formed true friendships around the world, but it has also been an invaluable resource for feedback, helping us build user products that work, while continuing to create a warm and welcoming environment for content creators, community builders, and fans alike. space. Regardless of market conditions, 2022 will be the year of construction. Besides technology, I wish all projects focus more on community building and engagement. Early product adoption and testing is critical to business now, and it also creates and nurtures diverse audiences and protects nascent ecosystems from external issues.
Personally, as the broader market structure changes, I expect assets to move to DeFi and staking protocols as investors look to gain, not sell assets. With it, I expect more users and tokens will migrate to Ethereum L2, especially as exchanges continue to integrate and join L2 directly.
When it comes to product development and marketing, I’m very bullish on NFTs becoming a core component of the digital product strategy of the world’s leading companies, as such companies are more or less exploring the metaverse for marketing, advertising, and engagement strategies. For VeVe, we will release a new version of VeVeVerse in 2022. Not only does this help bring world-class IP into the digital realm, but it also creates a whole new revenue stream for IP holders in the digital realm. For collectors, this evolution of our ecosystem is designed to create a more immersive and interactive experience, enhancing the value of VeVe digital collectibles and OMI tokens, while creating more opportunities for fans!
In addition to the Metaverse and the myriad potentials it brings, I would like to see the integration of NFTs with DeFi protocols, as the maturity of these assets also increases opportunities for capital efficiency and becomes the perfect source of collateral in the digital space.
By the end of 2022, I expect (hopefully) that the expansion of the NFT industry will begin to represent physical/illiquid assets (like real estate) and create a plethora of new opportunities as we enter the next market cycle.
In terms of building and experimenting, I expect many bridges and protocols to facilitate interoperability between layers, chains, and scaling solutions. While I’d love to see it integrated directly into the wallet itself, I think the earliest iteration will be for the dapp itself to be launched on multiple chains and linked to each other. In addition, DAO, decentralized file storage, digital identity verification, the application of NFT and the application of P2E games in developing countries are also the focus of attention in the future. However, I feel we are still a few years away from blockchain-based games becoming mainstream in gaming.
Tim Copeland: Editor-in-Chief of The Block
It’s been a year of wild experimentation. We’ve seen projects decentralize with million-dollar airdrops, NFTs skyrocketed and used as loan collateral, a number of experimental cross-chain protocols like Poly Network and Thorchain were hacked, plus Ethereum introduced the Aggressive fee burning mechanism. Encryption technology has been on a road of constant innovation.
I think this year will be a challenging year for DeFi applications. They have come under a lot of scrutiny this year and are struggling to figure out how to deal with the growing attention from regulators. The question will be whether they are trying to work within the rules or are they trying to circumvent the rules through decentralization. Another big question is what to expect from the massive influx of funding from blockchain gaming applications and the metaverse. But it could take more than a year to see more results.
It seems that blockchain games are bound to develop rapidly. The question is whether any other project can attract the same market share as Axie Infinity. However, as I said, this can take longer to develop than other types of dapps, because building games and building communities around them is very time-consuming.
Anastasia Plane: Chromia Marketing Manager
For me, one of the biggest “wins” of 2021 is the explosion of blockchain gaming. ChromaWay has been in this space for a while – we acquired Antler Interactive in late 2019 and have been building the Chromia blockchain platform where gaming dapps are one of our main thrusts. My Neighbor Alice and Mines of Dalarnia are two Chromia-incubated projects that will hit the market in 2021, and it’s great to see a large community already developed. With both games releasing full versions in 2022, I think this upcoming year will be one to look forward to!
By 2022, I think the focus will shift from simply involving blockchain to going deeper. As more and more games enter the market, simply “playing and earning” is not enough. Is this game fun? Is the integration of NFTs and cryptocurrencies intuitive? Is the in-game economy open and balanced? To me, these are the factors that determine which projects build a lasting user base.
While DeFi’s popularity has exploded since 2020, there is still plenty of room for growth. As developers come up with new ideas, blockchains become more scalable and interactive, pushing their limits ever higher.
2021 is in many ways the “Year of NFTs”, but I think there are a lot of interesting NFT projects that are just starting to roll out. For example: fractional ownership, club membership, royalties and cost-sharing, gaming applications, etc. By 2022, I think people will realize that NFTs are not just “jpegs”, but an important technology that can change and disrupt multiple industries.
Katie Butler: Chief Marketing Officer, Moonbeam
2021 is the year that sets the stage for 2022. On the technical side, we’ve been hard at work building Moonriver and Moonbeam. The experience of launching Moonriver drove the team forward and replicated that success on Polkadot. The team has been working with other parachains as well as teams to develop the strongest possible EVM to ensure developer compatibility in all respects. In BD, Marketing and Ecosystem, we have been working tirelessly to grow and expand our ecosystem and community. For BD, that means finding and partnering with projects that ultimately want to be deployed into the ecosystem and secure the technical side, and of course we’re ready to support them. The marketing team has been ensuring that our reach continues to expand in the cryptocurrency world, and Ecosystem Frontiers is developing an ambassador program to help potential projects as a way to attract more attention.
2022 will be the year when multi-chain strategies are front and center. Moonbeam’s fully-compatible smart contracts with Ethereum will go live in January, which will enable the deployment and access to the Polkadot ecosystem, a collaboration we have been working on since September 2020. The Moonriver ecosystem continues to show phenomenal growth, and these projects within the system push the network to new heights. In 2022, the power of the Polkadot ecosystem will show how interconnected blockchain networks will foster new applications that were not possible prior to the release of Polkadot and Kusama. Both Moonbeam and Moonriver will continue to expand the DeFi, gaming and NFT ecosystems that have already emerged, and we expect you will see some amazing new projects emerging to continue expanding the crypto ecosystem and usability as Web2 talent continues to make its way into Web3 .
In the second half of 2021, NFTs have been in the spotlight, and I think we’ll see more NFTs incorporated into gaming and DeFi. This will focus less on unique pieces of digital art and more on what those pieces can enable, such as higher DeFi yields, better gaming capabilities, and access to special content (like music and entertainment). I believe 2022 will be the year when music, movies, entertainers, celebrities, etc. will start to gain new viable revenue streams through NFTs.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/2021-dapp-industry-report-nfts-metaverse-defi/
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