thecoinrepublic.com
- The CPO at Coinbase makes predictions for the crypto ecosystem in 2022, including improving the scalability of Ethereum, regulating DeFi, the need for on-chain KYC attestation, and even the introduction of DAO 2.0.
- The CPO says that scalability will surge with the development of bridges for layer 1 to layer 2 transfers, but many layer 1 blockchains will see simultaneous growth.
- Other predictions explain how regulatory authorities will surround the ecosystem as privacy-based applications emerge and a rise in DeFi hacks is observed.
The most recent person to release predictions in 2022 for the crypto industry is Surojit Chatterjee, Chief Product Officer of Coinbase, who anticipates significant developments in Ethereum’s scaling. Chatterjee seems pretty optimistic about Ethereum being the leader in the crypto-economy and Web3 when they both scale simultaneously.
Investors, industry leaders, and analysts have started making and releasing predictions for the crypto industry in 2022. Surojit Chatterjee’s predictions were shared in a company blog post in which he explained that layer 1 networks would gain momentum simultaneously as Ethereum’s scalability gets better. He expressed that, “I am optimistic about improvements in Eth scalability with the emergence of Eth2 and many L2 rollups. Traction of Solana, Avalanche, and other L1 chains shows that we’ll live in a multi-chain world in the future.”
Layer 1 To Layer 2 Bridges
He added that new layer 1 networks would surface, mainly focusing on social media and gaming. Also, a massive upgrade in scalability would be observed as layer 1 to layer 2 bridges develop, and the need to use cross-L1 & cross-L2 bridges will surge with a demand for better speed. The bridges mentioned above allow transferring tokens from layer 1 networks to layer 2 networks, i.e., such as Ethereum to Arbitrum and vice-versa.
The CPO referred to ZK-rollup when hinting about scaling technologies by saying that the technology of ZK-rollup will surely get user attention and attract investors. The ZK stands for Zero-Knowledge and is a scaling solution that rolls up the data of transactions into several batches in order to make processing more systematic and productive on layer 1 of Ethereum.
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Layer 2 TVL growth
Matter Labs, a team of engineers passionate about blockchain, math, and liberty, have grown quite a lot in 2021, primarily due to their rollup-based zkSync layer 2 platform’s development and deployment. The overall ecosystem of layer 2 recorded massive growths in 2021 with increasing adoption for all crucial platforms of the industry. As per the reports of the layer 2 ecosystem, the TVL (Total Value Locked) on layer 2 has increased by 11,000% over 2021, reaching $5.5 billion at the end of 2021 from being $50 million at the beginning of 2021.
Privacy Will Attract Regulation
Chatterjee also said that other applications focusing on privacy would emerge, but that would bring a lot of attention from regulatory authorities, and restrictions such as KYC/AML (Know Your Customer / Anti-Money Laundering) might be imposed. He said that “w3e’ll see new privacy-centric use cases emerge, including privacy-safe applications, and gaming models that have privacy built into the core. This may also bring in more regulator attention to crypto as KYC/AML could be a real challenge in privacy centric networks.”
Some of the other predictions made by the CPO include the emergence of on-chain KYC attestation and regulating DeFi, participation of institutions in DeFi, the need of DeFi insurance, brand involvements in NFTs and the metaverse, companies from Web2 making efforts to enter Web3, the industry being more widely regulated and the need of introducing DAO 2.0, which might include getting tokens along with fixed salaries and the privilege of working in multiple DAO projects simultaneously.