Web3 trends for 2023

After the harsh and challenging year of 2022, we are all heading into the next 12 months with the hope of (at least a slightly) more positive outlook for the web3 market.

What kind of projects are most likely to deliver a better future for the industry? Which “narration” will take over the media attention? And which trends can spoil the web3 party in 2023? Take a look at our set of predictions below!

What are the trends in the blockchain industry in 2023?

The beginning of the new year always results in countless articles focused on predictions for the coming months. To avoid adding another one to the extensive list, we decided to take a slightly different approach.

We analyzed major publications on the “crypto 2023 trends” topic and picked a few ideas that were covered most frequently. And even though some of them – like “blockchain & AI” or “intensification of crypto regulations” – may seem cliched, there are at least a few that could surprise you and give you a different perspective on 2023 in web3.

1. Focus on building

We all know how bad for web3 2022 was. The entire crypto market lost nearly $2 trillion in its value. Major and relatively stable tokens went down more than 60-70%. And, even more importantly, confidence in crypto projects reached a very low bottom.

Therefore, to quickly forget about the last 12 months and restore trust in web3, blockchain enthusiasts promote the “building” narration. 2023 is predicted to be a relatively boring and stable year during which developers, innovators, and great minds of crypto find time to create and develop the next groundbreaking projects.

Historical data support this view. If we look at 2015 and especially 2019 – the last two “boring” years for web3 – we can find big names that were created right then. For example, 2015 saw the emergence of Ethereum, while in 2019, Cosmos hit the market.

From this perspective, the presumably “dull” 2023 starts to look a bit more exciting.

 

2. Crypto and AI in 2023

The excitement in 2023 can be brought by AI-based web3 projects. The rapid growth of ChatGPT – a generative AI chatbot that caught the attention of nearly all internet people at the end of 2022 – led to the emergence of the “AI & crypto” trend. Web3 users looking for the hyped projects and potential investment occasions started to search for AI-related cryptocurrencies. Pushing opportunistic developers and innovators to start working on such protocols.

However, AI & crypto marriage is not only about the hype. Web3 and artificial intelligence can and should co-exist, creating a valuable synergy. Potential areas of collaboration include:

• Fraud detection – as AI can more efficiently spot and forecast fraudulent activities on the crypto markets.
• AI-powered trading – as AI can very quickly analyze large amounts of data and predict potential events.
• Decentralized data storage – as blockchains can help store and decentralize data analyzed by AI.
• AI-optimized blockchains – as AI can be potentially used to optimize the security and scalability of protocols (particularly when it comes to their consensus mechanisms).

 

3. Blockchain interoperability and multichain environments

Negative events of 2022 as well as AI-focused narration, slightly covered the ongoing development of features that should only be continued in 2023. Meanwhile, cross-chain communication and enabling efficient transfers of tokens between various ecosystems remain crucial for improving the usability and convenience of the web3 world. That is why 2023 should bring more and more developments in the area of blockchain interoperability.

Imagine having to “wrap” your email and convert it to “yahoo” format before sending it from your Gmail account to someone’s Yahoo address. Thanks to interoperability, our experiences with emails are seamless and convenient. And, to achieve at least a similar level of adoption, cryptocurrencies need the same.

Fortunately, at least a few reliable protocols are already built with interoperability in mind. Cosmos, Polkadot, Lisk, or web3 bridges like Synapse create solutions that make transferring tokens and interacting with various dApps much more user-friendly.

 

4. DeFi development in 2023

People can say that the DeFi summer is now a distant past and events of 2020 won’t happen again. However, while this period brought significant returns for many investors and resulted in developments of protocols we use to this day (e.g., Uniswap, Compound), many DeFi protocols disappeared as soon as they came to the market.

The higher maturity of web3 space and growing concerns over centralized services can make 2023 a big time for “real DeFi.” Web3 users will look for protocols that can reduce investment risk and provide them with returns based on real-world assets (and not inflationary tokens like in 2020). DeFi growth should also be pushed by greater stablecoin adoption and the increasing importance of DAOs – especially in an uncertain regulatory future for the entire industry.

Moreover, there is one more technology that can make decentralized finance great again in 2023…

 

5. ZK-Rollups breakout in 2023

Blockchain scaling has always been one of the main problems of the industry. Slow and expensive transactions deterred many potential web3 users from joining the space, making it incredibly hard to “bring crypto to the masses.”

Although many projects managed to provide users with a better experience (in terms of time and cost), their technology turned out to compromise other blockchain primitives – like security or decentralization. The so-called “blockchain trilemma” – a constant trade-off between these three features^[1] – looked like a Gordian Knot.

Fortunately, great minds of web3 haven’t given up on cutting it. The emergence of ZK-Rollups, complex cryptographic scaling solutions, seems to be an extremely important 2023 web3 trend. This technology allows projects to process transactions more efficiently (hence, improving scaling) without negatively impacting the security and decentralization of a protocol.

2023 should see mass adoption of ZK-Rollups and their improved compatibility with Ethereum Virtual Machine. Making it possible to design new web3 tools (e.g., in the world of DeFi) with the “blockchain trilemma” already solved.

 

6. Utility NFTs

While ZK-Rollups excite mostly technological geeks (at least, for now), NFTs have always been referred to as technology that can attract the masses. However, in recent years, non-fungible tokens got mostly bad press – primary thanks to their speculative character and the lack of general utility.

As the general web3 audience has a more and more negative attitude toward NFTs, projects need to find a way to convince people that this technology still has its place in the crypto world. Therefore, in 2023 we should see a fundamental shift from funny animal images to tokens with real utility. Especially since NFT applications are almost endless:

• NFT-based subscriptions
• Tokenization of data
• Tokenization of intellectual property
• Proof of Attendance
• NFT-based access
• … and many, many more!

 

7. Crypto regulations intensify

Given all the facts and ideas mentioned above, 2023 looks rather promising and exciting for web3, don’t you think?

Well, there are entities that are likely to spoil the party. Regulators from all over the world have already taken a very close look at the web3 market, and events like the collapse of FTX will only speed up their activities. Therefore, intensification of crypto regulations can become the primary web3 trend for 2023 – especially when we take into account the impact it could potentially have.

On the other hand, not all types of legislation are harmful. For example, certain states of the US are not tightening but only loosening crypto regulations, making it easier for people to invest and build web3 projects. Moreover, as inflation remains a massive issue for many developing and poorer countries, fostering crypto adoption by governments could serve as a potential weapon to fight it. Making web3 more accessible to the masses.

^[1] Scalability, decentralization, and security.