Crypto Investment Trends That Will Define 2023: Report

Less than a month into the new year, the market is already showing sustainable signs of recovery, and the “creative destruction” that has occurred could ultimately be a big win not only for consumers, but also in terms of regulatory protection and rapid innovation, because as well as lower cost structures .

Despite its many ups and downs, crypto has become a serious player in the world economy. Investors still invest their portfolios in the asset class. According to OKX’s new report, here are five key trends in crypto investing that will define the coming year.

Ethereum Devs

The development of the Ethereum ecosystem is constantly increasing. With the completion of the merger, the transition from Proof of Work to Proof of Stake reduced energy consumption by 99%. On top of that, several, several OP layer 2 scales the network.

Danksharding would be another milestone for Ethereum by increasing TPS to 100k+ after approaching Shanghai upgrades. The design will essentially pave the way for a significantly cheaper and faster implementation that will ensure Layer 2 networks can thrive.

Introducing innovations

In recent years, the DeFi and Web3 space has seen a surge of financial enthusiasts. The COVID pandemic has encouraged tens of millions of players and gamblers to the GameFi and Play 2 Earn projects, and this trend seems to be intensifying.

After that, big players like Yuga Labs, Reddit and Starbucks brought in traditional users with their NFT products. Several blockchain networks have also joined forces with big brands to attract new users.

Meanwhile, storing and retrieving public and private keys is the Achilles heel of Web3 security. But wallet developers are now seeing heavy investment in improving experience and usability.

DeFi revitalization

The strong deleveraging pressures inflicted in the second half of 2022 triggered the collapse of several prominent crypto companies. Total Value Locked (TVL) in DeFi has taken a severe beating, falling by more than 76%. The failures are expected to set the stage for “greater innovations to come.” As such, the industry is looking to develop decentralized stablecoins that could be useful in the real world.

The NFT market also suffered a similar fate due to the crypto winter. But beyond PFP NFTs, which have no utility beyond their social attributes, securitization combined with DeFi, for example, can bring credit, value and capital. This is expected to trigger an explosion of NFT-Fi in the future.

Industry-wide focus on infrastructure

Decentralized infrastructure projects and permissionless projects could play bigger roles this year. For example, mev-boost adoption by validators has reached 90% as of 2021. With OFAC’s Tornado Cash sanction, Flashbot’s mev-boost relay validators are under the scrutiny of the enforcement agency.

On the bright side, the MEV landscape is poised for a big change. The fragmentation of liquidity brought about by layer 2, application chains and multi-chains could provide huge opportunities for MEV. The introduction of danksharding is expected to change the way Flashbot usually mines on Ethereum.

Moreover, centralized data tools, such as Dune and Glassnode, have dominated the on-chain data investment and analysis space. But decentralized data tools will become a central focus for developers in the coming months.

Safety in the chain

The space witnessed rampant fraud, with hackers galore, and no compensation.

As such, on-chain data, monitoring tools, and asset recovery tools will be a major focus for 2023, focused on Web3 security management, on-chain activity monitoring, Web3 user behavior, lost asset tracking, and AML protection.

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