Lambda256’s Blockchain Trend Insights for 2023
2022 will likely be remembered for negative events that took place in the cryptosphere. High-profile incidents such as the FTX collapse and the LUNA crash impacted millions of users and caused them to reconsider the value of cryptocurrency, Web3, and blockchain. However, we believe it is time to separate cryptocurrency from the technology that underpins it, and put the spotlight on innovative solutions that can be created using blockchain. Developing blockchain applications and solutions creates invaluable use cases across a range of industries, that benefit economies and societies around the world.
Regardless of the state of crypto markets, blockchain technology isn’t going anywhere. In fact, experts predict that the industry will continue to grow rapidly over the next few years. So we’ve put together a quick rundown of the top ten blockchain market trends that you should be paying attention to in 2023.
1) Layer 2 for Mass Adoption of Web3
Many Layer 1 protocols still require developments in privacy, user experience, and scalability before they will be able to effectively support the mass adoption of Web3 and Web3 applications. For now, the Layer 2 ecosystem will be the backbone of 2023 consumer-oriented blockchain solutions. Applications that are not directly related to finance such as gaming and Metaverse platforms will most likely choose to utilize Layer 2 protocols, given that they will be looking to prioritize scalability while reducing costs and improving speed for the best user experience.
2) Problem-specific Web3 Solutions
Regardless of fluctuations in volatile cryptocurrency markets, businesses and developers are increasingly utilizing Web3 infrastructure to solve problems and transform industries. We can expect more problem-specific blockchain applications and solutions to appear and provide innovative ways to improve areas such as transparency, privacy, and data management. Examples of potential benefits are already being discussed in industries such as healthcare, where better patient data management across platforms can directly result in more accurate diagnoses, and more cost-effective care for both patients and institutions.
3) Security Tokens
Security Tokens are digital assets that represent transferred ownership rights or asset value of a blockchain token. They work by combining stake principle with various benefits of the blockchain to provide more value to investors. Essentially they function the same way as a stock, bond, or certificate would in traditional investment. Security Token Offering (STO) is an alternative to Initial Coin Offering (ICO) that increases trust for investors since Security Tokens must comply with federal regulations. Many people lost faith in coin investments due to several incidents in 2022, so we expect more secure and regulated mechanisms to prevail in 2023.
As more developers and businesses are looking to enter the growing Web3 market, user-friendly Blockchain-as-a-Service providers such as Luniverse will become essential for mass adoption. BaaS eliminates the need to maintain complex blockchain systems, giving businesses an accessible alternative to build decentralized applications, execute smart contracts, and utilize a variety of Web3 infrastructure. Global spending on blockchain solutions is set to increase in 2023, but in order for companies to successfully harness the full potential of blockchain, the dissemination of education and training regarding BaaS platforms will also be essential.
5) Alternative NFT Utility
With NFTs driven deep into bear markets, the craze of 2021 looks to be far behind us. However, we believe that the next wave will be led by big brands looking to drive customer engagement. Coffee behemoth Starbucks’ blockchain-based loyalty program “Odyssey” will launch in 2023; if it’s successful we will likely see a scramble as more corporate brands jump on board, introducing digital collectibles to all kinds of audiences. For example, the production company behind ‘Parasite’, Barunson E&A, has joined hands with Lambda256 to bring unique digital collectibles to movie lovers. 2023 may also see a rise in Phygital products, where real-life items are linked to digital counterparts. This can encourage consumers to venture into Metaverse territories with digitally wearable goods.
6) Decentralized Identity (DID)
One core feature of blockchain is that it can offer a high degree of protection and safety of data. Along with the ability to verify a person’s identity, this significantly helps reduce the risk of fake or stolen information. Decentralized Identity services solve many issues faced by centralized technology, users can control their digital identity without a third party. They also allow businesses to verify the authenticity of an individual’s credentials instantly. Use cases for DID services are growing, alongside demand for user-friendly platforms that help companies deploy and manage DID systems. You can find out more about Luniverse DID solutions on our site.
7) Blockchain Interoperability
Blockchain interoperability has become an increasingly vital element of Web3 services. Allowing blockchain networks to exchange and leverage data to and from one another will lead to the creation of powerful new products and solutions that can harness the power of multiple chains at once. As interoperability improves, we expect to see developments in customizable Web3 services, multi-token transactions, and multi-token wallets. When data is easily transferable across chains, it can lead to collaborations between industries that wouldn’t normally interact. With blockchain, the possibilities are effectively endless.
8) Ethereum Momentum
Following the Merge in September 2022, Ethereum is now running on a Proof-of-Stake (PoS) consensus. This move has decreased energy consumption dramatically, which will help to reduce some of the negative sentiments surrounding cryptocurrency. It will also likely put Ethereum on the radar of ESG investors and environmentally conscious corporate brands. The next hard fork is scheduled in the first half of 2023, which will allow staked Ether to be withdrawn. Provided everything goes well, the utility as a platform for staking innovation will likely continue to expand.
9) Crypto Regulation
Web3 users saw a number of high-profile crypto disasters in 2022, including the FTX collapse and the LUNA crash. This renewed concern about stability in the market and highlighted the need for more stringent regulations. In order to rebuild trust, legal frameworks and policies are expected to be introduced in 2023. As the world makes critical decisions about crypto regulation, unregulated exchanges and platforms may become subject to investigation. We hope these moves will increase security in Web3, and restore the faith of negatively impacted users.
10) Web3 Gaming
The Web3 gaming industry is definitely due for an upgrade. Play-to-Earn mechanisms have great potential, and blockchain can provide solutions for problems faced by gamers, especially regarding digital asset ownership. However, the quality of Web3 gaming projects is not yet up to par with recently released video games. We’re anticipating a new wave of high-quality Web3 gaming projects that combine the utility of blockchain with traditional gaming aesthetics.
Join the Discussion
This list provides an overview of the blockchain trends we are most excited to watch develop over the next year. If you enjoyed this post, join our Discord and share your predictions for 2023 blockchain trends with our community. You can get insights into the latest blockchain trends, and find out what we’re building at Lambda256!