At the beginning of the new year, the encryption market is fully prepared for the unknown. If 2022 is a test of what templates the encryption market may provide for investors in the future, it turns out to be very unpredictable. The following content will answer for you.

1、 What are the main challenges and objectives of the encryption market?

The market value of global digital currencies has been brutally impacted, falling from US $220 million to about US $797 billion so far, a drop of slightly more than 60%. At the same time, BTC and ETH, the two largest digital currencies by market value, each fell by 64% and 67%, while the counterfeit currency market also fell. In addition, the demise of the FTX exchange due to these price falls is not an event that most people (if any) can foresee.

In addition, because some encryption projects and risk funds have retained financial accounts in the exchange, the impact of the FTX collapse has not yet ended. In other words, if 2022 is really chaotic, then 2023 must provide something more positive, but the growth in the first quarter of this year (if not the first half of this year) may be very slow.

2、 Will the same approach be followed in 2023?

After the cruel events in 2022, there will inevitably be a stage of adjustment, settlement and refocusing, all of which will promote months of reflection and tense repositioning, and then before the market changes. The macroeconomic environment is also unlikely to change significantly in the short term. "Encrypted Winter" will last at least for a while. But change will come eventually. However, it remains to be seen whether this is dominated by investors or companies.

However, it seems obvious that with the gradual improvement of the market - confidence has increased again - the market should change to a positive direction; Therefore, it is not surprising that investors who dare to take risks act earlier this year rather than later, which seems to be against intuition. In addition, as you will read below, DeFi and NFT predict development.

3、 The circulation problem of DeFi attracting retail use in 2023

In the field of encryption, transaction volume and liquidity have declined, and DeFi will continue to struggle in terms of circulation incentives and service development. So far, the method of obtaining this passive liquidity has been developing, from the liquidity mining incentive mechanism to the agreement liquidity. Even so, this problem still exists and needs to be solved in the new year, so that DeFi can successfully become a scalable alternative to centralized financial services.

Facts have proved that token rewards are unsustainable incentives for trading and markets, which usually lead to clean trading or "sale" of platform assets. Most retail customers have no time or ability to improve their execution and management positions. This complexity may be a major obstacle for retail investors to invest in DeFi. Although this highlights the inherent complexity of the DeFi market for retail customers, it also shows that many people try to simplify the process and make it easier for retail customers to enter this field (and gain their benefits).

4、 Control problems and attract the use of institutions

Because control became the focus of attention at the end of 2022, and the uncertainty that followed, many institutions were hesitant about the distributed ledger technology. The concept of "licensing DeFi" can help institutions overcome the pain of regulation and provide a solution. In November 2022, we can see that the new plan of JPMorgan Chase and DBS Polygon blockchain foreign bond trading also supports the verifiable evidence on the chain. I believe this is an early example of a big bank using token deposits in the public blockchain. In 2023, I expect to see more and more government leaders (if they don't support it) cooperate with leaders from all walks of life to explore the selection of DeFi.

Although "licensing DeFi" is not decentralized in nature, it remains to be seen how far institutions will go to pursue the interests of customers and how much power (if any) they are willing to give up in the pursuit of decentralization and decentralized finance. Most likely, customers choose a real encryption native platform (such as XGo) to help connect and support customers. DeFi feels that while traditional financial enterprises try to use DeFi, its advantage is to provide services for customers, and there is a tension between the two.

5、 NFT game in 2023, the combination of metauniverse and NFT

This is an industry. NFT avatar projects tend to transition to interoperable meta-universe integration. By 2022, the evidence in this regard will increase significantly, and this trend may continue until 2023. I'm also investing a lot of energy and money in Otherdeed, Cooltopia and Spacedoodles, but this is just the tip of the iceberg of gamification. The question remains whether this will become a catalyst for large-scale use. Even so, it remains to be seen whether the coming universe will really disperse.

At present, the reliability and sustainability trend of Web3 games is due in many ways to AxieInfinity Play and Win (P2E). Due to the mode problem, this will lead to a wave of other built-in stable products. In addition, there is a risk of overreaction in the ecosystem at the beginning of 2023, which is designed to be insulated from the dynamic boom and downturn characteristics of most encryption speculation. This brings the risk of creating a homogeneous and flat player's feeling, which is like a copycat version of the current traditional video game.

Even so, we still haven't seen such a metauniverse as My. In the next year, we will use token economics, gaming and speculative opportunities in a healthy and responsible way. In addition, those channels that use NFT and digital currency to make games will realize large-scale selection, and this function is not all of their sales content. Without awareness, players need to participate in these technologies. More importantly, as we enter 2023, a battle is ready. The reality is that generally less than 5% of mobile game players can pay for anything, so these people must be included in order to obtain large-scale choices.

summary

To sum up, the results of 2023 are difficult to predict accurately, but there is no doubt that 2023 will be different, positive and interesting. In 2023, with a positive prospect and an ambitious road map in this field, it will be exciting. Can DeFi become the mainstream and blockchain-based games attract the public.