In 2023, the years of progress on the decentralized identity and reputation front will finally mature. These systems will start to become significant pieces of infrastructure underpinning most of our interactions and transactions, especially in Web3.
Decentralized identity and reputation systems built on web 3.0 make this possible by taking a more holistic approach to brand identity through platform-agnostic, user-centric data aggregation.
A brand can take their impeccable reputation built on one application and apply it towards another. Reputation is the most vital invention of Web3.0
1. Increased adoption of decentralized finance (DeFi) platforms and services
Accelerated adoption of decentralized finance (DeFi) platforms and services will continue to grow in 2023.
Growth of DeFi may be enhanced by the increasing awareness and understanding of these platforms among consumers. As more people become familiar with DeFi and the benefits it offers, such as increased accessibility, transparency, and security, they are more likely to use these services.
The continued development and innovation of DeFi platforms makes them more user-friendly and offer a wider range of services and products, they may attract a larger user base.
In addition, the increasing interest in and adoption of cryptocurrency also drives the adoption of DeFi platforms, as these platforms often rely on the use of digital assets. As the use of cryptocurrency becomes more mainstream and accepted, it is likely that DeFi platforms will see an increase in adoption as well.
2. Growth of non-fungible tokens (NFTs) as utility beyond digital art, collectibles, and other unique digital assets
Growth of NFTs will gain further momentum because of the increasing recognition and acceptance of digital art and other digital assets as valuable and collectibles. As more people come to view these assets as having real value and worth, they are likely to purchase and trade NFTs.
Another factor that could drive the growth of NFTs is the continued development and improvement of the infrastructure and technologies supporting the creation and trading of NFTs. As the process of creating and trading NFTs becomes easier and more user-friendly, more people may be attracted to using these platforms.
In addition, the increasing popularity and mainstream acceptance of cryptocurrency will also contribute to the growth of NFTs, as many NFTs are purchased and traded using digital assets. As the use of cryptocurrency becomes more widespread, more people will be interested in using it to purchase and trade NFTs.
In 2023, the Web3 ecosystem will rev up beyond the “jpeg” period of non-fungible tokens which dominated the markets for the last two years. The term “NFT” will no longer inevitably mean “digital art” as it has become quite synonymous with, as enterprise use cases will emerge using NFTs as the base technology.
For Enterprise solutions and products using web 3.0 for your specific industry, check our website.
2023 will also be the year where consumers will start living in a truly phygital economy bringing to fore the true utility of NFT as a web3.0 wrapper.
3. Expansion of decentralized autonomous organizations (DAOs) and decentralized governance models
The continued development and improvement of the technologies and infrastructure supporting DAOs will become more robust and user-friendly leading to more organizations and communities adopt decentralized governance models.
In addition, the increasing adoption and mainstream acceptance of cryptocurrency and blockchain technology also contributes to the expansion of DAOs and decentralized governance models. As these technologies become more widely used, it is possible that more organizations and communities will look to utilize decentralized governance models to manage their operations and decision-making processes.
In 2023, Investment DAOs will emerge as decentralized, secure and transparent alternatives to investing through the existing GP/LP venture structures.
Investment decentralized autonomous organizations (DAO) will be the transparent, auditable, and collaborative vehicles to deploy and allocate capital. The technique of financial decision making will move away from relying on the opinions of a few experts to consensus-based ecosystems of global members who form these DAOs.
2023 will see these responsive, on-chain DAOs play the high-potential investment opportunities, leveling the playing field for the average investor.
4. More widespread use of decentralized identity and privacy solutions
As more people become aware of the risks and vulnerabilities associated with centralized identity systems, they may be more likely to adopt decentralized alternatives.
The continued development and improvement of these technologies as they become more user-friendly and offer a wider range of features and services, may attract a larger user base.
Get set for the rise of “ZK everything” as privacy technology arises from academic proofs-of-concept to usable, scalable technology.
In 2023, a much broader set of use cases will be unlocked by adoption of software development kits (SDK) that allow ZK smart contracts to be programmed into applications (“ZKApps”), executed off-chain, with verification and settlement back on-chain. Off-chain execution opens up a whole new world for data privacy and attestation, and efficiency. It will start to bridge the gap between Web2 and Web3, and will enable new identity use cases, social networking, voting, games and zkML.
The success of ZK in 2023 is access to existing Web3 devs.
The zero-knowledge proving market will be larger than bitcoin’s proof-of-work (PoW) market by 2030.
In addition, the increasing adoption and mainstream acceptance of cryptocurrency and blockchain technology may also contribute to the growth of decentralized identity and privacy solutions.
5. Integration of blockchain technology into traditional industries and gaming
The use of blockchain in education, supply chain, retail, Government, media, entertainment or gaming can increase transparency, security, traceability, trust and efficiency.
In 2023, Web3 gaming will release projects that bring together the utility of Web3 and the aesthetics of traditional gaming. Market attention will shift away from token-first projects towards the studios, companies, and titles that have been building with a gameplay-first approach.
6. Development of hybrid central/decentralized systems, such as sidechains and layer 2 solutions
Ethereum shipped proof-of-stake in 2022 and continues to be the most ubiquitous layer 1. A series of protocol-level developments has created a vortex of innovation, development, users and capital.
Filecoin is the largest decentralized storage network with more than 4,000 storage providers contribute ~16 exbibyte (EIB) of storage capacity. Client data stored on the network is up 15 times, year to date. That’s enough to store the entire Internet Archive 275 times over.
Filecoin is enabling open services for data. The protocol is releasing smart contracts in Q1 2023 through the Filecoin Virtual Machine (FVM), a critical on-chain upgrade which will allow it to come into its own as a fully fledged layer 1 protocol. The FVM will enhance the sophistication of Filecoin’s storage services while unlocking a whole new universe of use cases for the Web3 space apart from decentralized finance (DeFi), NFTs, gaming etc.
Smart contracts on Filecoin have the unique ability to pair these Web3 offerings with real world services like storage and compute, provided by an open market.
As layer 1 protocols continue to undergo core developments in scalability and privacy, layer 2s will support the next wave of consumer-friendly applications.
Despite breakneck innovation, the leading layer 1s still have sufficient protocol-layer development to undergo in order to support daily mass adoption of Web3 applications. Specifically, consumer requirements like scale, user experience (UX), confidentiality and security.
In 2023 we will see layer 2s come to the forefront of crypto adoption as they handle the wave of consumer applications coming to market. In particular, the nonfinancial applications like social media, gaming, and metaverses — which can reasonably prioritize scale over all else — will look towards layer 2s as the best solution to quickly launch in the market.
7. Advancements in scalability and performance for decentralized systems
The growth in reputation projects, social networks, and decentralized identity will bring AML/KYC solutions down to the wallet level.
This focus on reputation and identity will increase in 2023, alongside increased regulation and consumer protection for DeFi use.
Verifiable credentials will become the data standard for off-chain credentials and attestations, with a focus on free, cheap, and privacy-first options that can be selectively disclosed by users.
As blockchains have matured in application, developers will be forced to welcome and own more of the blockchain stack.
“Cosmos vision” will finally find mass adoption.
Cosmos is not a blockchain but a ‘“galaxy” of interconnected chains. Importantly, all of the chains employ the inter-blockchain communication (IBC) standard, a technology designed to mimic the early innovations of TCP/IP layer in Web2.
We will see a range of customizations. How much security does your chain want or need? Is it open to developers? How about fees? Where do you want to be connected?
App-specific rollups (RollApps) will be a big trend in 2023. Alongside the growth in Cosmos, however, we will see the rise of app-specific chains.
In 2023, DeSci will turn scientific research into a Web3-native asset class through IP-NFTs (Intellectual Property NFTs), ushering a new age of scientific discovery. Scientific research, pharma development and biotech will move from monopolistic innovation models to open-source, hyper-collaborative ecosystems on chains.
This also means that most likely, a lot of normalization will occur and zombie chains may find themselves losing speculative money in the market.
So it’s time to say bye to Vaporware.
8. De-fi and Ce-Fi
Decentralized Finance or ‘DeFi’ seeks to provide traditional financial services involving crypto-assets (i.e. mimicking the ‘CeFi’ or centralized finance market) in an open, decentralized, permissionless way.
In 2023, the world will understand the difference between CeFi and DeFi. The former is where transactions are subjectively intermediated by humans who are able to improperly tamper with the database. The latter are where transactions are trustlessly and objectively intermediated by math and computer science without manipulation.
“Tech crypto” will replace “money crypto” in 2023 through two trends:
1) the movement of capital from centralized to decentralized financial applications and
2) the rise of non-financial decentralized applications like DeSci, social media, consumer rewards and more.
The result will be a growing foundation of Web3 (i.e., tech crypto) adoption rather than just token (i.e., money crypto) adoption
9. Increased regulation and compliance in the decentralized space
D.C., will be a crypto hotbed in 2023 as innovation precedes regulatory law as usual
Consumer protection will be top of mind for policymakers in 2023. The majority of emerging policy will be around centralized exchanges and stablecoins.
We will see tokens representing everything: an electron on a microgrid, a bar of gold, a carbon offset credit, a software license, a governance right, a concert ticket, a doctor’s prescription.
Therefore, a regulatory ontology should be defined to help everyone in the space determine whether a specific token should be classified as a commodity, security, or other type of asset.
So lobby, lobby, lobby.
10. Evolution of user experience and user interface design for decentralized applications (dApps)
A dapp is an application which is built on a decentralized network which combines a smart contract and a front end user interface. From an end-user perspective, dapps shouldn’t behave much differently than the apps that are commonly used today.
The biggest difference lies in the fact that all of the data and backend of the application is not centrally stored .
This lack of centralization makes the dapp very powerful, as it basically means that they are completely independent and autonomous, and not under the control of any single company or entity.
Blockchain apps also have their code on the Internet, but the reading and writing of transactions related to user wallets is carried out in a decentralized network (blockchain). While a Web3 app can support multiple blockchains, within an active session, it can be connected to just one.
This new experience brings with it numerous considerations for app designers:
· Since there are so many different networks, it’s important to know where users are and help them to get into the right place
· As network transactions are handled via a wallet, having a wallet is a must
· Because transactions carry different fees and require different times to process, apps must show these details and help users adjust to them
· Finally, users are responsible for everything — there is no 3rd-party regulation — so, apps must be transparent and build trust
To truly help dapps to take off, these decentralized applications need to be able to provide a meaningful, rewarding, and impressive user experience.
Besides the UI/UX component of the application, aspiring dapp creators should also contemplate how to incorporate existing blockchain trends into their applications — thereby leveraging the popularity that comes with the mania that is currently ongoing in the crypto industry today.
While still in the early days, there are massive opportunities for developers to get ahead of the curve, by continuing to refine the UI/UX
At Liveplex, we can make your transformation to web3.0 easy and efficient. Talk to us at hello@liveplex.io
Decentralized identity and reputation systems built on web 3.0 make this possible by taking a more holistic approach to brand identity through platform-agnostic, user-centric data aggregation.
A brand can take their impeccable reputation built on one application and apply it towards another. Reputation is the most vital invention of Web3.0
1. Increased adoption of decentralized finance (DeFi) platforms and services
Accelerated adoption of decentralized finance (DeFi) platforms and services will continue to grow in 2023.
Growth of DeFi may be enhanced by the increasing awareness and understanding of these platforms among consumers. As more people become familiar with DeFi and the benefits it offers, such as increased accessibility, transparency, and security, they are more likely to use these services.
The continued development and innovation of DeFi platforms makes them more user-friendly and offer a wider range of services and products, they may attract a larger user base.
In addition, the increasing interest in and adoption of cryptocurrency also drives the adoption of DeFi platforms, as these platforms often rely on the use of digital assets. As the use of cryptocurrency becomes more mainstream and accepted, it is likely that DeFi platforms will see an increase in adoption as well.
2. Growth of non-fungible tokens (NFTs) as utility beyond digital art, collectibles, and other unique digital assets
Growth of NFTs will gain further momentum because of the increasing recognition and acceptance of digital art and other digital assets as valuable and collectibles. As more people come to view these assets as having real value and worth, they are likely to purchase and trade NFTs.
Another factor that could drive the growth of NFTs is the continued development and improvement of the infrastructure and technologies supporting the creation and trading of NFTs. As the process of creating and trading NFTs becomes easier and more user-friendly, more people may be attracted to using these platforms.
In addition, the increasing popularity and mainstream acceptance of cryptocurrency will also contribute to the growth of NFTs, as many NFTs are purchased and traded using digital assets. As the use of cryptocurrency becomes more widespread, more people will be interested in using it to purchase and trade NFTs.
In 2023, the Web3 ecosystem will rev up beyond the “jpeg” period of non-fungible tokens which dominated the markets for the last two years. The term “NFT” will no longer inevitably mean “digital art” as it has become quite synonymous with, as enterprise use cases will emerge using NFTs as the base technology.
For Enterprise solutions and products using web 3.0 for your specific industry, check our website.
2023 will also be the year where consumers will start living in a truly phygital economy bringing to fore the true utility of NFT as a web3.0 wrapper.
3. Expansion of decentralized autonomous organizations (DAOs) and decentralized governance models
The continued development and improvement of the technologies and infrastructure supporting DAOs will become more robust and user-friendly leading to more organizations and communities adopt decentralized governance models.
In addition, the increasing adoption and mainstream acceptance of cryptocurrency and blockchain technology also contributes to the expansion of DAOs and decentralized governance models. As these technologies become more widely used, it is possible that more organizations and communities will look to utilize decentralized governance models to manage their operations and decision-making processes.
In 2023, Investment DAOs will emerge as decentralized, secure and transparent alternatives to investing through the existing GP/LP venture structures.
Investment decentralized autonomous organizations (DAO) will be the transparent, auditable, and collaborative vehicles to deploy and allocate capital. The technique of financial decision making will move away from relying on the opinions of a few experts to consensus-based ecosystems of global members who form these DAOs.
2023 will see these responsive, on-chain DAOs play the high-potential investment opportunities, leveling the playing field for the average investor.
4. More widespread use of decentralized identity and privacy solutions
As more people become aware of the risks and vulnerabilities associated with centralized identity systems, they may be more likely to adopt decentralized alternatives.
The continued development and improvement of these technologies as they become more user-friendly and offer a wider range of features and services, may attract a larger user base.
Get set for the rise of “ZK everything” as privacy technology arises from academic proofs-of-concept to usable, scalable technology.
In 2023, a much broader set of use cases will be unlocked by adoption of software development kits (SDK) that allow ZK smart contracts to be programmed into applications (“ZKApps”), executed off-chain, with verification and settlement back on-chain. Off-chain execution opens up a whole new world for data privacy and attestation, and efficiency. It will start to bridge the gap between Web2 and Web3, and will enable new identity use cases, social networking, voting, games and zkML.
The success of ZK in 2023 is access to existing Web3 devs.
The zero-knowledge proving market will be larger than bitcoin’s proof-of-work (PoW) market by 2030.
In addition, the increasing adoption and mainstream acceptance of cryptocurrency and blockchain technology may also contribute to the growth of decentralized identity and privacy solutions.
5. Integration of blockchain technology into traditional industries and gaming
The use of blockchain in education, supply chain, retail, Government, media, entertainment or gaming can increase transparency, security, traceability, trust and efficiency.
In 2023, Web3 gaming will release projects that bring together the utility of Web3 and the aesthetics of traditional gaming. Market attention will shift away from token-first projects towards the studios, companies, and titles that have been building with a gameplay-first approach.
6. Development of hybrid central/decentralized systems, such as sidechains and layer 2 solutions
Ethereum shipped proof-of-stake in 2022 and continues to be the most ubiquitous layer 1. A series of protocol-level developments has created a vortex of innovation, development, users and capital.
Filecoin is the largest decentralized storage network with more than 4,000 storage providers contribute ~16 exbibyte (EIB) of storage capacity. Client data stored on the network is up 15 times, year to date. That’s enough to store the entire Internet Archive 275 times over.
Filecoin is enabling open services for data. The protocol is releasing smart contracts in Q1 2023 through the Filecoin Virtual Machine (FVM), a critical on-chain upgrade which will allow it to come into its own as a fully fledged layer 1 protocol. The FVM will enhance the sophistication of Filecoin’s storage services while unlocking a whole new universe of use cases for the Web3 space apart from decentralized finance (DeFi), NFTs, gaming etc.
Smart contracts on Filecoin have the unique ability to pair these Web3 offerings with real world services like storage and compute, provided by an open market.
As layer 1 protocols continue to undergo core developments in scalability and privacy, layer 2s will support the next wave of consumer-friendly applications.
Despite breakneck innovation, the leading layer 1s still have sufficient protocol-layer development to undergo in order to support daily mass adoption of Web3 applications. Specifically, consumer requirements like scale, user experience (UX), confidentiality and security.
In 2023 we will see layer 2s come to the forefront of crypto adoption as they handle the wave of consumer applications coming to market. In particular, the nonfinancial applications like social media, gaming, and metaverses — which can reasonably prioritize scale over all else — will look towards layer 2s as the best solution to quickly launch in the market.
7. Advancements in scalability and performance for decentralized systems
The growth in reputation projects, social networks, and decentralized identity will bring AML/KYC solutions down to the wallet level.
This focus on reputation and identity will increase in 2023, alongside increased regulation and consumer protection for DeFi use.
Verifiable credentials will become the data standard for off-chain credentials and attestations, with a focus on free, cheap, and privacy-first options that can be selectively disclosed by users.
As blockchains have matured in application, developers will be forced to welcome and own more of the blockchain stack.
“Cosmos vision” will finally find mass adoption.
Cosmos is not a blockchain but a ‘“galaxy” of interconnected chains. Importantly, all of the chains employ the inter-blockchain communication (IBC) standard, a technology designed to mimic the early innovations of TCP/IP layer in Web2.
We will see a range of customizations. How much security does your chain want or need? Is it open to developers? How about fees? Where do you want to be connected?
App-specific rollups (RollApps) will be a big trend in 2023. Alongside the growth in Cosmos, however, we will see the rise of app-specific chains.
In 2023, DeSci will turn scientific research into a Web3-native asset class through IP-NFTs (Intellectual Property NFTs), ushering a new age of scientific discovery. Scientific research, pharma development and biotech will move from monopolistic innovation models to open-source, hyper-collaborative ecosystems on chains.
This also means that most likely, a lot of normalization will occur and zombie chains may find themselves losing speculative money in the market.
So it’s time to say bye to Vaporware.
8. De-fi and Ce-Fi
Decentralized Finance or ‘DeFi’ seeks to provide traditional financial services involving crypto-assets (i.e. mimicking the ‘CeFi’ or centralized finance market) in an open, decentralized, permissionless way.
In 2023, the world will understand the difference between CeFi and DeFi. The former is where transactions are subjectively intermediated by humans who are able to improperly tamper with the database. The latter are where transactions are trustlessly and objectively intermediated by math and computer science without manipulation.
“Tech crypto” will replace “money crypto” in 2023 through two trends:
1) the movement of capital from centralized to decentralized financial applications and
2) the rise of non-financial decentralized applications like DeSci, social media, consumer rewards and more.
The result will be a growing foundation of Web3 (i.e., tech crypto) adoption rather than just token (i.e., money crypto) adoption
9. Increased regulation and compliance in the decentralized space
D.C., will be a crypto hotbed in 2023 as innovation precedes regulatory law as usual
Consumer protection will be top of mind for policymakers in 2023. The majority of emerging policy will be around centralized exchanges and stablecoins.
We will see tokens representing everything: an electron on a microgrid, a bar of gold, a carbon offset credit, a software license, a governance right, a concert ticket, a doctor’s prescription.
Therefore, a regulatory ontology should be defined to help everyone in the space determine whether a specific token should be classified as a commodity, security, or other type of asset.
So lobby, lobby, lobby.
10. Evolution of user experience and user interface design for decentralized applications (dApps)
A dapp is an application which is built on a decentralized network which combines a smart contract and a front end user interface. From an end-user perspective, dapps shouldn’t behave much differently than the apps that are commonly used today.
The biggest difference lies in the fact that all of the data and backend of the application is not centrally stored .
This lack of centralization makes the dapp very powerful, as it basically means that they are completely independent and autonomous, and not under the control of any single company or entity.
Blockchain apps also have their code on the Internet, but the reading and writing of transactions related to user wallets is carried out in a decentralized network (blockchain). While a Web3 app can support multiple blockchains, within an active session, it can be connected to just one.
This new experience brings with it numerous considerations for app designers:
· Since there are so many different networks, it’s important to know where users are and help them to get into the right place
· As network transactions are handled via a wallet, having a wallet is a must
· Because transactions carry different fees and require different times to process, apps must show these details and help users adjust to them
· Finally, users are responsible for everything — there is no 3rd-party regulation — so, apps must be transparent and build trust
To truly help dapps to take off, these decentralized applications need to be able to provide a meaningful, rewarding, and impressive user experience.
Besides the UI/UX component of the application, aspiring dapp creators should also contemplate how to incorporate existing blockchain trends into their applications — thereby leveraging the popularity that comes with the mania that is currently ongoing in the crypto industry today.
While still in the early days, there are massive opportunities for developers to get ahead of the curve, by continuing to refine the UI/UX
At Liveplex, we can make your transformation to web3.0 easy and efficient. Talk to us at hello@liveplex.io