It is undeniable that 2021 was the grand year of crypto with most cryptocurrencies recording massive growth thanks to increased demand from both retail and institutional investors. However, some of this success seemed to have hit a wall towards the end of 2021 and part of 2022 with most cryptocurrencies showing signs of capitulation thanks to various headwinds.
However, Huobi in collaboration with the blockchain Association of Singapore is projecting the immense growth of various sectors in the crypto industry this year due to the value they create, which could bring back the industry’s mojo.
Decentralized Anonymous Organizations (DAOs)
DAO’s are forms of organizations with no central leadership where all members have a hand in running the body. The rise of organizations such as the Constitution DAO has been considered a great success enabling individuals to pool funds and make fast decisions on tasks that would have rather been a dream for traditional vertical organizations.
According to DeepDaO the sector has grown from $4 Billion in May 2021 to over $11.5B of Assets Under Management (AUM) with over 188 DAOs in existence today. Despite still grappling with management and treasury supervision issues, Huobi predicts this sector is likely to record meteoric growth in 2022, with investors such as Mark Cuban already aped in.
Decentralized Finance (DeFi)
According to the report, having successfully tested the outcomes of On-chain Perpetual Contract and Forward Contract in the last 2 or so years, 2022 could see the entrance of the industry to DeFi 2.0, marking rapid growth in the sector.
With the sector currently holding $201.9 Billion in TVL compared to January 2021’s $18.76B, Huobi believes the number of AMM, lenders, and integrators seeking various platforms such as OlympusDAO and Alchemix could double with more DeFi 2.0 projects likely appearing.
Central Bank Digital Currencies (CBDCs)
According to a recent report by BIS, almost 86% of central banks have been actively engaged in the development of CBDCs in the last 4 years.
This growth of interest is a big plus to the blockchain industry as most countries now see CBDCs as the long-sought answer to risks and conflicts facing cross-border transactions. Huobi projects that countries such as Australia, Malaysia, Singapore, and South Africa among others will debut their CBDCs before year-end.
Non Fungible Tokens (NFTs)
With NFTs on the Ethereum and Solana blockchains recording parabolic growth in 2021 and their volumes reaching $8 Billion, Huobi believes the rise also has produced more opportunities.
Apart from NFTs being recognized as a form of investment, they will tend to drift more on lending and derivatives. This is because NFTs offer high efficiency in the use of capital as lending underlies the NFT price and there is constant liquidity involved.