The year 2023 is regarded as a time of significant accumulation for the cryptocurrency industry. Most current investors are making their own forecasts about the market’s potential trends to locate the most suitable “Products”.
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Decentralized finance (DeFi) is a new financial system built on safely distributed ledgers like those used by cryptocurrencies (according to Whiteboared Crypto).
DeFi reduces the usage fees that banks and other financial institutions impose. Anyone with an internet connection can use DeFi, and users can hold their money in a safe digital wallet and transfer money quickly.
How does it work?
The blockchain technology that cryptocurrencies employ is used in decentralized finance. The blockchain is operated and transactions are handled by programs known as dApps.
The blockchain records transactions as blocks that are later confirmed by other users. If all of these verifiers concur on a transaction, the block is closed and encrypted, and a new block is made with details of the old block inside it.
There is no way to edit a blockchain since changes to the information in earlier blocks always have an impact on later blocks. This idea, coupled with other security measures, gives a blockchain its security.
The world of decentralized finance is always changing. It is unregulated, and its ecosystem is full of fraud, hacks, and infrastructure errors.
Other issues to consider are system dependability, energy usage, carbon footprint, system upgrades, system upkeep, and potential hardware failures in the future that could affect trader security.
According to data from Crypto.com, the past few GameFi projects have followed the principle of “Take money from the latter to pay the person first.” When the market enters the correction period in the first quarter of 2022, this will become even more clear.
Blockchain games are being referred to as GameFi (Gaming and Finance), which is rapidly growing and garnering widespread awareness. Games and metaverse projects have raised over $2.5 billion, according to DappRadar. They have increased by over 2000% by 2021 and over 50% of all blockchain operations, even during the weak market. The figures show their quick development and expanding adoption.
How does it work?
In the past, GameFi projects followed the “take money from the latter to pay the person first” strategy. This will become much more clear once the market enters its correction phase in the first quarter of 2022.
The term “GameFi” (Gaming and Finance), which refers to blockchain games, is rapidly growing and getting widespread attention. DappRadar claims that over $2.5 billion has been raised for games and metaverse projects. They have increased by over 2000% by 2021 and over 50% of all blockchain operations, even during the weak market. The figures show their quick development and expanding adoption.
Gamefi is expected to be a new era in the gaming industry and sharply increase 6.5 times by 2025 compared to this year (data from Crypto.com). It is receiving mainstream adoption and reaching mass consumers. It can totally draw a large swath of traditional players, gamers, and even newcomers without gaming knowledge.
However, gamefi has currently faced several challenges which encounter it from expanding to diverse communities:
- Many players/gamers have not heard about crypto or already heard about it but do not fully understand the basics. Thus, crypto education is the goal to jumpstart crypto acquisition and should be prioritized because the entry of traditional gaming publishers into gamefi may be the main driver for GameFi growth in 2022.
- The over-monetization of games can become a bewildering factor driving away many players from interacting with gamefi apps, hindering blockchain and crypto adoption. Players should have fun game modes, and compelling storylines with deep in-game economics where NFTs are either part of the game or revolve around it, but not force the topic of money on players.
- Some P2E games require initial and substantial investments. Some gamefi titles should think about their free-to-play instead of play-to-earn mechanisms so that players can first experience the game freely and decide if they want to buy in-game assets.
According to All In Station.com, the number of “Usecases” for existing NFTs has increased since their initial deployment. NFTs are currently undergoing constant evolution in order to shed the stigma of being “useless speculative products,” which many people still ascribe to them. NFTs no longer only exist as digital “Paintings” for the purpose of collection.
In the past year, conventional companies from a number of industries have demonstrated the usefulness of NFT when it comes to preventing plagiarism and generating scarcity for digital assets. Big brands in the market are driven by the distinctiveness of their offerings and content (data from Allinstation.com).
Dynamic NFT (dNFT), which offers many advantages over conventional NFT and can be applied to fields like Blockchain Gaming, Art, or Real Asset Crypto (RWA – Real World Asset) to place on Blockchain, maybe the route that NFT will take in the future.
In conclusion, new technologies in 2022 will experience both highs and lows. The time is right for sustained growth based on knowledge gathered from the experiences of 2022 after having witnessed a powerful bullish phase and a painful bearish downturn. These trends will continue to expand and strengthen in 2023.