With Covid wave 3 knocking down the new year resolutions for many, there’s hardly any difference between 2021 and 2022 in terms of the ability to roam outside freely without a mask. Also, I know I am a bit late to the party with a post like this. But thanks to wave 3, which took me down with a surprise. Nonetheless, I wanted to share my perspective on the crypto industry. They say if you study the past closely, you get a glimpse of the future. Shall we then?
After a decent closing of 2020, crypto markets opened 2021 with new hopes. And the market exceeded almost all of them. Ecosystem was ripe for DeFi to explode, NFTs were about to become the talk of the town and who knew that we’d end up valuing our digital twins more than the physical selves. Yes, I am talking about the metaverse. Let’s do a deep dive in how all these trends panned out in 2021 for all of us.
DeFi- Decentralized Finance
Decentralized finance emerged as one of the key use cases of the crypto realm. As the world was coming back on track with the covid induced shocks, there were specific industries which were benefiting highly from the acceleration in digital transformation. When you couple that with increased liquidity and cash in the system, what do you get?
An exponential growth in the DeFi ecosystem. As per defillama, the TVL in defi protocols stood at $21.97B on 30th December 2020. This figure is at $244B as on 3rd December, 2021. That’s a gargantuan jump of >10X.
Blockchains like Avalanche, Solana and BSC are all set to take the center stage in this ecosystem. If ETH doesn’t solve for it’s gas issues soon, we might see a flippening happening.
With that being said, there’s a flip side to this coin as well. Growth and frauds go hand in hand. Defi related scams and rugpulls reached $10.5B in 2021. While the year was full of such unfortunate events, the clear winner here was the Squid Games Rug Pull.
Imagine a token reaching $2300 apiece from a measly $0.0007 in a matter of 48 hours. Then? Within a blink of an eye, coming back to the same level. Liquidity being swooshed away from the unknowing investors.
NFTs- Non Fungible Tokens:
Non fungible tokens or NFTs replaced dining table conversations for many homes. So much so that my grandfather asked me one fine day about it. And why wouldn’t he? They were almost everywhere. From cryptopunks to bored apes, artists saw a new way to monetize their work, investors saw an opportunity to diversify and critics found their dopamine hit in ridiculing crypto space.
The key headlines were made when Beeple, an online digital artist, managed to auction one of his paintings named “The First 5000 Days” for a staggering $69M. This irrational exuberance was capitalized by various projects. At this point if you are thinking that this is absolutely bizarre, here is something that would probably kick you out of your seat. This twitter thread talks about how pixels of a giant image of a huge square on the internet are being sold for thousands of dollars.
Indian NFT Landscape:
India also jumped on to this hype real soon. It all started when Vishal Malhotra, an Indian actor came up with a NFT. It was the first by an Indian actor. To his own surprise, it was sold in less than 24 hours at 5x of the bid price. Roping in a sweet 2.5 ETH, this incident was bound to roll some eyes.
Soon after, Mahanayak of the century, Mr. Amitabh Bachchan came up with his own NFT collection in collaboration with beyondlife.club. In recent news, when the auction was closed for the first tranche of signed Madhushala NFTs, the highest bid stood at $756,000.
Some companies like the Wrapped Asset Project (registered in Wyoming, USA) have started a unique take on NFTs. The project is called Human Talent NFTs and they intend to tokenise talent possessed by humans. Think of it like purchasing stocks. But instead of a company, you are investing in a human and his future potential!
Metaverse:
That’s the beauty of cryptoverse. The moment you are close to calling yourself a master of a niche, there’s always another one waiting to bring you back to the ground. You must be living under the rock if you are not caught up in the metaverse hype.
It’s a concept that has tickled our fancy for a while now. With movies and games like second life, Ready Player One, Avatar etc. the concept isn’t new. But then why is it garnering so much attention all of a sudden?
Connecting the Dots:
Well, the answer requires some dots to be connected. It is a function of time, money and ownership. It’s one thing enjoying a sci-fi movie OR playing a game or two in a digital universe. But when the world starts working remotely and our digital selves become more important than our physical being, the assets that we use digitally are instantaneously valuable.
Still confused? Let me try again. Imagine that you are wearing a $500 Rolex. It shows the same time as a $50 Casio. However, there’s an element of social status involved here. You like to flaunt it, satisfying your ego in the process. Now if I say that you don’t get to go out. Where would you wear this watch?
Switching to the metaverse: consider a digital avatar of yourself that represents you in a digital world. If he could wear that Rolex digitally, it would carry a similar flamboyance right?
As I mentioned, when you put three elements of time, money and ownership in a sci-fi, you are likely to make it a reality.
The hype started when the big tech giant, Facebook, decided to rebrand itself to Meta. With dreams of converting Facebook into a digital immersive experience, Mark Zuckerberg made his plans of a pivot pretty clear.
As soon as the news came, all Metaverse related cryptos like MANA, ENJ, SAND almost 4x’ed within a few days. While analysts say there’s a lot more juice left in these cryptocurrencies, I would recommend you to DYOR.
India and Metaverse:
The Indian ecosystem also heated up and founders working on Metaverse projects came into limelight overnight.
hile there are many Indian projects like OneRare, Bollyheroes, Cope.Studio that I came across, one particularly caught my attention: LOKA.
Based in New Delhi, LOKA is India’s first multiplayer gamified virtual Metaverse based on 3D maps of real-world cities and locations, where players can participate in live and concurrent experiences powered by their favourite third-party apps.
Imagine walking in the Connaught Place Metaverse and you decide to enter the KFC outlet. That would open the KFC application on your phone within the metaverse and you could order food in the real world.
This is in addition to an additional layer known as ‘Feel, vibe and culture,’ which has small elements like ambient sounds, background noises, NPCs, culture-specific virtual goods, etc., thereby retaining the feel and relevance of the location.
It is indeed a crazy world we live in!
Meme Coins:
What? Now we’re discussing meme coins too? Why not! If it wasn’t for trends, $DOGE and $SHIBA won’t have been a thing today. With both the lovely dogs sitting comfortably in the top 10 coins by market cap, I think meme economy is here to stay.
When Elon Musk elevated himself to the title of Dogefather in March (when it hit it’s ATH at Rs. 58), we saw it all (or at least we think we have). Currently, Elon Musk and Vitalik Buterin are on the board of $DOGE.
So love it, or hate it, as more retail investors flock into the crypto space, these meme coins and maybe some others will continue to induce light heartedness in this otherwise serious space.
Conclusion:
Basically, we want to say that Blockchain and Crypto is a rabbit hole. Once you taste the blood of this amazing technology, there’s no going back. While 2021 had many trends in store for us, we are sure that next year similar blogpost could be twice the length. Choice is yours. You could either wait and let blockchain change the way you work, or you could be that change! Until next time.
How was your crypto year of 2021?
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Until next time..
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