The year 2021 has been an exceptional milestone in the world of cryptocurrencies for various reasons. In 2021, the crypto market hit the $3 trillion dollar market cap while China imposed a complete ban on crypto trading and mining. In a dramatic year for cryptocurrencies, new trends such as non-fungible tokens, decentralized finance (DeFi), and the metaverse emerged as prominent highlights in the crypto space.
The discussions around NFTs, DeFi, and the ever-growing hype surrounding the web 3.0 and metaverse have been making the rounds of online communities. How would these technologies evolve in 2022? What will be the state of NFT in 2022? What will DeFi or the metaverse look like in 2022? How will they influence the larger picture of the crypto industry? Let us discover the answers to your questions by reflecting the prominent trends for NFTs, DeFi, and the metaverse in 2022 in the following discussion.
New Terms on the Crypto Space in 2021
You can discover the top trends for the emerging technologies in the crypto space for the year 2022 by understanding the terms.
Non-fungible tokens or NFTs are a new type of digital asset which helps in exercising and verifying unique ownership. They have also emerged as a favorable option for offering fractional ownership of conventionally illiquid assets such as precious metals. No one could forget how a piece of digital art sold for $69 million in an auction in February 2021. That’s how the magic of NFTs caught the world’s attention.
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If you want to know about the state of DeFi in 2022, then you must know that it is an innovative take on conventional financial systems with a slight twist of decentralization. Decentralized finance is the approach of enabling access to financial services without the involvement of central intermediaries such as banks. Lending and borrowing protocols alongside decentralized exchanges reeled in huge sums of total value of assets locked in the protocols.
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The discussions around metaverse trends for 2022 have also started to pick momentum in the crypto landscape. What is the metaverse? As a matter of fact, you may have witnessed representations of such a concept in science fiction novels or films. With Facebook announcing the rebranded identity of its parent company as Meta, the buzz around the metaverse has been increasing. In simple terms, the metaverse is basically a digital or virtual reality environment where users can interact with each other and different solutions through their digital avatars.
Now that you know the basics of three important trends which emerged in the crypto space in 2021, you might be eager to find what they have in store for 2022. Let us focus on the trends for these three important technological wonders individually for the upcoming year.
The State of NFT in 2022
Irrespective of the contradictory opinions about NFTs, they are a credible instrument for redefining the approaches through which users would interact with the web. In addition, the NFT trends also showcase their potential influence on purchasing and selling art or creating and experiencing music. So, what can expect from non-fungible tokens in 2022? Here are some notable trends which might dominate the NFT space in 2022.
NFTs in Gaming
One of the foremost NFT predictions for the year 2022 would be the growth of NFTs as an instrument for utility rather than just promoting art. NFTs would expand more in the field of gaming and enable access to rare communities, generally associated with marketing for web 3.0 and avatar casting.
The gaming industry has witnessed the foundations for arrival of NFTs, with popular publishers like Ubisoft joining the play. Ubisoft has developed a blockchain that enables players to purchase and unlock items, which have actual value in present times. Play-to-earn games such as Axie Infinity have also shown how NFT trends would shape up favorably in the gaming industry.
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Music and NFTs
Another prominent highlight for NFT in 2022 would be the reduced gap between NFTs and music adoption. NFTs are also all set to exercise their influence on the music space. Interestingly, the former Twitter CEO, Jack Dorsey, turned towards Block for introducing music NFTs on streaming services such as Tidal.
The best thing about NFTs that would drive their use in the music sector in 2022 would be the verification of ownership. You can easily verify the ownership of content, and music NFTs also offer better prospects for audience engagement. Apart from offering an interactive and proven method for creating and distributing music, NFTs can also enable royalty earnings.
NFTs and Digital Tagging
The benefits of NFTs for verifying ownership also serve as the basis of NFT predictions for 2022. As of now, NFTs can provide creators and artists the assurance of verifiable ownership of their content. However, the future would have almost everything associated with an NFT.
Tagging objects with NFTs will serve as digital footprints for identifying the ownership of the objects with ease. Interestingly, there have been many instances of digital tagging for physical items and experiences. For example, NBA Top Shot is a platform where you can find popular game highlights and fan memorabilia as NFTs.
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Metaverse Trends in 2022
The prospects for metaverse in 2022 appear quite promising, especially with many companies such as Facebook and Epic Games investing billions of dollars in developing the metaverse. As companies gear up to understand the metaverse and how it will shape up, the metaverse trends for 2022 can show how it will evolve in the short term. Here are some of the prominent trends which make an impact on the metaverse in the upcoming year.
Fashion and Metaverse
A reputed international fashion retailer, H&M, opened its virtual store in the metaverse. H&M created the store in the virtual city of “CEEK” in the metaverse and allowed customers to shop in the metaverse. Buyers can use CEEK coins for shopping at the metaverse store of H&M. Therefore, metaverse predictions for 2022 might reflect profoundly on the rise in such use cases of the metaverse.
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The most noticeable mention among metaverse trends for 2022 would be the massive boost for the metaverse in upcoming year. Many notable companies such as Facebook and Microsoft have already made their efforts to build the metaverse. Many other global tech giants such as Tencent, NVidia, Snap, and others are also supporting the metaverse hype.
In many ways, the year 2022 might spell completely new beginnings for the metaverse. For example, the involvement of big players in the metaverse would also imply formidable technological support for the growth of metaverse. The state of a metaverse in 2022 would largely focus on the predominant role of AR/VR technology empowered with blockchain functionalities.
Another promising highlight in metaverse predictions for the upcoming year revolves around the use of metaverse coins. Large companies would show more interest in metaverse projects in 2022, thereby leading to increased possibilities for using coins in the metaverse.
As of now, almost 100 new coin projects will be available in 2022 and complement the existing leaders such as SAND, AXS, and MANA. The use of AXS in Axie Infinity, a blockchain-based play-to-earn game dealing in NFTs, shows the potential for adoption of metaverse coins. Soon, metaverse coins might find a place in the portfolios of investors in the crypto space in 2022.
DeFi Trends in 2022
In a broad sense, you can see how NFTs and metaverse are closely related to each other. So, where does the other notable trend, i.e., DeFi, fit in the picture? If metaverse offers the environment and NFTs offer the tokens for interacting with the environment, DeFi offers the infrastructure for financial transactions. DeFi has the potential to transform the crypto space, and the $236 billion worth of total value of assets locked in DeFi protocols showcases its significance. Here are some notable DeFi predictions for the year 2022.
More Digitization of Assets
The rapid adoption of web 3.0 trends by users and markets would facilitate merging of digital assets with conventional forms of finance. As a result, DeFi trends for 2022 would most likely redefine financial markets and value chains for unlocking more value. The advantages of decentralized protocols and distributed architecture are clearly evident for issuers, especially in raising capital. In addition, introduction of new institutional-grade tools and regulatory-compliant infrastructure can support digitization of assets.
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Moving Closer to DeFi Regulations
Another prominent trend for DeFi in 2022 would draw attention to one of the prominent setbacks for DeFi adoption. Institutions and investors are worried about regulation and compliance issues with DeFi. However, DeFi would introduce many new advancements in terms of regulation and compliance in the year 2022. For example, wallets and DeFi solutions with in-built KYC and international legislation checks can improve institutional exposure to DeFi. At the same time, regulators are expected to show active initiative in the next year regarding the regulatory implications of DeFi.
What’s More in Crypto Space in 2022!
The overview of NFT trends and the state of the metaverse and DeFi for 2022 shows promising prospects. However, there are many underlying challenges that will pop up in the journey of NFT, DeFi, and the metaverse in 2022. NFTs would find broader applications in music and digital tagging while the metaverse is likely to receive effective institutional support.
Decentralized finance would continue on a gold run, especially with the introduction of new platforms and increased emphasis on regulations. At the same time, the concerns regarding uncertainty of the crypto landscape lead to ambiguous perceptions regarding the future of NFTs, metaverse, and DeFi. Explore the technologies and identify their true potential for transforming the crypto world.
*Disclaimer: The article should not be taken as, and is not intended to provide any investment advice. Claims made in this article do not constitute investment advice and should not be taken as such. Do your own research!