Original title: "Crypto Theses for 2023"
Original author: Ryan Selkis, Messari
Original compilation: 0x22d, BlockBeats
On December 22, Messari announced the release of Messari Theses 2023, the sixth annual report of its co-founder and CEO Ryan Selkis, focusing on Crypto fields such as Bitcoin and stablecoins, L1 public chains and Rollup, DeFi, NFT and DAO The latest developments in all aspects. The report predicts that 2023 will be a year for cryptocurrencies to further prove their resilience and progress in technology and policy. Ryan Selkis, co-founder and CEO of Messari, said: “There are too many bad actors stealing the spotlight in 2022, but there are still projects and people doing critical work to move our industry forward. Now is the time to refocus. These people are innovative." From Messari's 168-page 2023 Crypto report, BlockBeats extracted 33 Messari's predictions and prospects for the future of Crypto in 2023 and beyond:
Bitcoin and Stablecoins
1/Bitcoin’s role as a currency will still be questioned, which is why building stablecoin infrastructure in parallel (the right way) is so important. Stablecoins are bridge currencies to the future.
Bitcoin is already huge, and its continued rise will be slow but certainly powerful.
We’re in a race to see whether more emerging market central banks start bidding for BTC, or whether large reserve currency countries start killing the invention. Supporters of cryptocurrencies are starting to show up in previously unlikely places like Harvard’s economics department. So, despite the market pressures this year, we are closer than ever to success.
2/Bitcoin will surpass the euro and people in Brussels better learn how to deal with it.
3/ Regarding cryptocurrency mining, Bitcoin mining must be cleaner and more sustainable.
4/ In an environment of rising interest rates, many corporate finance executives may be reluctant to add Bitcoin to their balance sheets. With no sign of major adjustments to interest rate policy from the Federal Reserve, the next burst of demand for Bitcoin is likely to occur at the global government level rather than those of large corporations.
5/The public nature of most blockchains may create opportunities for privacy networks, as well as privacy-focused Layer 2 such as Aztec and Polygon’s Nightfall. In the upcoming privacy war, we are most bullish on Zcash and Monero, especially Zcash.
6/Stablecoins should become a major U.S. export. Despite some arbitrary and paternalistic dominance in the U.S. Congress, the United States will continue to maintain its leadership in the fields of technology, finance, and encryption. American entrepreneurs have been leading the charge in building crypto infrastructure and DeFi. Today, with more than 50 million Americans owning cryptocurrencies, America doesn’t need to do more to win than lose.
7/About over-collateralized stablecoins
MakerDAO is like the cockroach of Crypto (in a good sense of course). Although Dai’s issuance has halved from its March 2022 peak to $5 billion, it has once again shown resilience amid a brutal bear market. Although crypto lending has been hit repeatedly, MakerDAO and Dai have not experienced any real problems or unanchoring.
8/About algorithmic stablecoins
Terra’s model of charging seigniorage to the entire system is still viable. But growth must be pursued conservatively and with "insurance" contracts backed by transaction and loan fees. For example, if Terra could leverage the net interest margin on sister lending protocol Anchor and offer it to an insurance fund, they might have a chance of avoiding a run. But when you step outside the window of conservative, fee-driven growth, the risk fence goes away. Although the model is feasible, we probably shouldn’t continue to take risks. Is it really a good thing to breathe oxygen to these planned black swans?
The stablecoin market is quite chaotic at the moment, but Crypto still needs the new algorithmic stablecoin to succeed, and I believe we will get an inflation-resistant algorithmic stablecoin.
9/What could be worse than $60 billion of algorithmic stablecoins collapsing and going bankrupt? ——CBDC.
A CBDC would be the equivalent of the Federal Aviation Administration taking it upon itself to fly planes and build jet engines instead of defining competitive, rules-based safety pathways in the air.
L1 public chain and Rollup
10/Ethereum Over the next few years, it will be time to clean up technical debt, determine the scale and security of Rollup, and ensure that the EVM remains censorship-resistant. The Ethereum merger completed this year will make derivatives such as Lido’s stETH ubiquitous. Censorship is the main problem after the merger of Ethereum.
11/Layer 1 The war on public chains will be similar to the browser war. That is, EVM and one or two other players may be winners, but dozens of L1 blockchains are unlikely to succeed together.
12/ If the scalability benefits of ZK Rollups become more apparent, they could proliferate as they could theoretically provide users with cheaper transaction fees. Rollup has better interoperability, throughput, and lower fees, but whether they can compete effectively with other L1 public chains is yet to be determined. Rollup gains the security of Ethereum, but transaction costs are still an order of magnitude higher than many L1s.
The value accrual of 13/Rollup and modular blockchains is questionable as it is unclear how much economic value will actually flow to the consensus and data availability layer compared to transaction settlement and execution. Some DApps will have to monitor liquidity Whether due to insecure cross-chain infrastructure, it ended up becoming fragmented among Rollup. But as we continue to move towards a multi-rollup world with less reliance on Ethereum L1, cheaper transactions, and better usability, expect some new tools in this space (we still need cross-chain bridges).
14/Aptos, Sui These upstarts have strong teams, supporters, and networks, but in the crypto winter, it is questionable how valuable they will ultimately be.
At the end of 15/2020, we believed that Ethereum’s lead was unassailable. It became less certain at the end of last year, as we were pessimistic about whether the merger could be completed in time. Now, I'm once again bullish on Ethereum's dominance and not sure if we should be happy about it.
DeFi
16/Uniswap V3 is a watertight AMM protocol, but that doesn’t mean other DEXs can’t compete with it. Competition could revolve around dynamic fees that adjust with trading volume or volatility, or oracle performance and reliability. What is certain is that it is unlikely that other DEXs will replace Uniswap through tokenomics or marginal price advantages. Don’t compete on cost, compete on value.
17/Lido is expected to become the DApp generating the most fees in the Crypto industry in 2023. In the new year, Rocket Pool’s market share will reach 5 – 10 times its current level.
In 2018/2023, Crypto Asset Management will shift its investment focus to DAO. It is now easier to create rules-based asset managers with code, and protocols that allow for on-chain funds and indicators will be easier to add value.
Crypto protocols such as 19/Nori, Flowcarbon, KlimaDAO, and Toucan deserve attention. These protocols lay the foundation for reducing carbon footprints by transforming the fragmented carbon trading market, and have the ability to bring transparency, liquidity, and aggregation to the global green market. Whenever you can invest in a sustainable, green, socially conscious organization, you should.
20/Most DeFi users, and the trading volume within them, will likely need to complete KYC within the next few years to continue.
The $3 billion in on-chain attacks in 2021/2022 will allow security auditing companies to continue to receive investment in 2023.
NFT
The potential of 22/NFT is still worth believing in.
23/Yuga Labs has had an interesting year, although ApeCoin, a virtual community of nearly 100,000 people, is as confusing as TikTok and the Kardashians. Also puzzling is the fact that Dogecoin and Shiba are more valuable than Uniswap. But the Ape community is one of the few things that has grown during this hell of a year.
24/ We will continue to see more NFT experiments from Elon Musk’s Twitter (more to come in the decentralized social segment).
In 25/2023, NFT-based fashion products will open up a new opportunity for brands. Whether it's purely digital or a physical/digital hybrid, there's a lot of demand. Gucci sells digital versions of its physical bags on Roblox for $800 more than the “real” ones.
26/GameFi is currently the most over-hyped sector in Crypto and we are bearish on GameFi.
27/ Still optimistic about the future of AR/VR, but not planning to bet on it. Those who do this this year will have their faces swollen.
28/OpenSea will become a $100 billion company. Coinbase NFT failed, FTX NFT disappeared, and OpenSea’s advantages became even more obvious.
29/The design space of NFT is much larger than that of FT. The claws of regulation will only touch NFT after solving DeFi, privacy products and DAOs. NFTs will become the universal standard for packaging financial assets, much like monkey JPEGs are now.
KNIFE
30/ Crypto infrastructure will grow exponentially in areas where governments vigorously control dissent and crack down on speech, and there is a huge opportunity to cater to gray market customers. Crypto infrastructure will become the backbone of the free and open web, worth hundreds of billions of dollars.
31/While it won’t happen overnight, DAOs will transform countless aspects of economics, politics, and society at large in the coming years.
32/However, the current management structure of DAO is unsustainable. Many DAOs hold a large number of their own native tokens and their investment portfolios lack diversity. They miss the opportunity to enrich their investment portfolios in the bull market. 2023 is going to be a bloody storm for crypto startups, and it’s going to be even worse in the decentralized community.
33/2023 will be the best time to create a media DAO. Through the DAO, $10 million is enough to fund an encrypted media giant composed of 50 top researchers and journalists in the industry.