The Web3 world isn't one we all know. Unless you're a decentralized supporter and user, you might not have even entered the mythical Web3. But did you know, there's already been 94 billion dollars invested in it in the US? A lot of that came from Meta, but we won't talk about the embarrassment for them. And according to a CoinBase study, 31% of internet users use web3. If you decide to do a BTC buy trade, you'll use Web3. If you dabble in play-to-earn gaming, you'll be using Web3. It's more widespread than you think.
Read on to find out about Web3's 2024 story so far.
Defi Trends
The DeFi sector in 2023 faced significant headwinds due to regulatory uncertainties. People lost faith. The total value locked (TVL) in DeFi platforms remained stagnant for much of the year. Many companies also lost value.
The regulatory environment posed challenges, with institutions remaining cautious about investing in DeFi ecosystems. But then again, it should do. The system needed regulation.
The numerous security breaches and hacks in 2023 eroded user trust in DeFi. The overall market decline also impacted DeFi's performance.
Still, some promising DeFi projects have shown resilience, continually improving their offerings.
NFT Market Developments
NFTs, which were the talk of the town in 2021/2022, experienced a significant downturn in 2023. Well, that's an understatement. Statistics show that 95% of NFTs lost their value. And the press wasn't the best. Cristiano Ronaldo facing a $1 billion law-suit for promoting NFTs that failed is one of the most high-profile.
Other high-profile examples like Jack Dorsey's first tweet NFT and Justin Bieber's Ape NFT drastically losing their worth. This decline was reflected in Google search trends, indicating waning public interest. However, the practical applications of NFTs in areas like real estate, gaming, and digital identity have continued to evolve. Some people think that 2024 will be the revival of NFTs.
The State of the Metaverse
The Metaverse. Whatever happened to that? Hype for the Metaverse peaked in 2021, along with NFTs. And if you follow NFTs, you know what a disaster that was. And it's funny because companies like Facebook (Meta) believe in the concept so much that they changed their brand name for it. And it seemed like everything stalled - but 2024 should be different.
Some projects like Decentraland faced challenges, that's for sure. But it was thanks to the shortfalls in technology that plagued the entire Metaverse.
The slow maturation of VR and AR technologies contributed to this gap. However, Meta's renewed focus on AI and the gradual improvement of VR and AR suggest a more realistic and incremental progression. They've wasted billions of dollars so far - so they should probably go through with it.
Gaming and Brands
The Web3 gaming sector is on the brink of a remarkable expansion. Or failure. Adoption rates aren't what people expected, but the idea is relatively new. Still, projections suggest a 200-300% surge in the number of game releases in 2024. But that seems a bit too astronomical.
This growth supports the entry of mainstream Web2 gaming giants into the Web3 space.
The integration of stablecoins within mobile games in prominent app stores like Apple's App Store and Google Play Store was a big stride forward. There are more instances where traditional financial systems combine with digital assets. People thought that would be impossible.
Stablecoins and Market Dynamics
In 2024, stablecoin transactions should eclipse the transaction volumes of giants like Visa - but this surely sounds like a pipe dream.
It does, however, highlight a growing acceptance and utility of stablecoins in everyday transactions. A notable aspect of this trend is the increasing prominence of Solana, it's expected to double its market share. This expansion reflects Solana's efficiency and growing appeal in the crypto community for fast and low-cost stablecoin transactions.
The emergence of a decentralized synthetic USD stablecoin with over $1 billion in total value locked (TVL) is a significant milestone. It represents a move towards a more decentralized financial ecosystem.
Ethereum and Blockchain Infrastructure
Ethereum's blockchain infrastructure underwent massive changes, highlighted by an increase in liquid-staked ETH and a surge in private transactions.
The growth in liquid staking illustrates a growing confidence in Ethereum's proof-of-stake mechanism. That's particularly among institutional stakeholders. The rise in private transactions indicates a shift towards enhanced privacy features within the Ethereum ecosystem.
The expansion of layer-2 solutions and rollups should and already is dramatically increasing Ethereum's transaction speed. Reports are showing improvements, but it's still slow. Exact figures aren't out, but user reports show a positive impact. This evolution is critical in addressing Ethereum's scalability challenges and could result in layer-2 solutions handling a larger volume of transactions than the Ethereum mainnet (layer-1).
Regulatory Environment
The regulatory landscape is playing a crucial role in the evolution of Web3. There's a discernible trend towards establishing a more cohesive, globalized framework for digital assets regulation, exemplified by initiatives like the EU's Markets in Crypto-Assets (MiCA) bill.
This push for international regulatory consensus is essential. It should create a stable and reliable Web3 ecosystem. Consumer protection has also emerged as a key focus area.
Ensuring compliance with Anti-Money Laundering (AML) and Know-Your-Customer (KYC) standards remains a complex yet critical aspect. That's especially true as decentralized platforms want to merge user privacy with regulatory requirements. Something people are worried they're not doing.
Web3's narrative is exciting. The potential is massive, and there's a lot of investment in it. There are definite challenges, and the numbers show us that the adoption rate is one of them, but you have to consider it's competing against the World Wide Web. Web 2.0. The Web we do everything on.
