The ongoing saga of the FTX crash has not only dominated crypto headlines, but also caused many to permanently write off the industry as billions of investor funds evaporate with no hope of regaining what has been lost. However, Alexander Filatov, co-founder and managing partner of EverX Labs, said there are five trends that could help the blockchain space exceed 1 billion users over the next 6-7 years.
The first is GameFi, which is a popular sector that emerged during the 2021 bull market. It provided gamers with a way to make money while doing what they love. It includes Act2Earn and Move2Earn. Filatov grouped this under the broader Metaverse trend, which he believes could be one of the most influential sectors that will lead to accelerated adoption of blockchain technology and Web3.
The second growing trend is the increased use of tokenization and non-fungible tokens (NFTs), which are becoming increasingly popular with large corporations and creators who continue to discover the possibilities of Web3 monetization.
The third is the improving performance of blockchain protocols as more scalable networks would be required to connect new users. The transition of Ethereum from POW to POS was given as an example.
The fourth trend that will likely lead to an influx of money and participants in the crypto economy is the increase in government intervention and the establishment of rules related to the use of blockchain-enabled technologies. Many representatives of institutional investors have indicated that the lack of a clear regulatory framework is the biggest barrier to getting involved in cryptocurrencies. So, setting clear rules and regulations will allow these firms to access this asset class for the first time. To estimate, roughly a third of institutions in the US are already investing in cryptocurrencies at one level or another.
Lastly, there has been an increase in experimentation with things like decentralized autonomous organizations (DAOs), social tokens, decentralized social networks, and Web3 media. One of the main uses of the Internet is social interaction, and this is one of the market sectors where the blockchain has yet to gain a foothold. DAOs allow the community to make important decisions for the project and facilitate interaction between users of the protocol. Meanwhile, social networks with built-in blockchain capabilities open the door for things like rewarding creators and monetizing social interactions.
While FTX currently dominates the headlines, its influence will pass and the path to widespread adoption will continue. Filatov noted that the current adoption curve largely follows the curve of the Internet, and if the trajectory remains the same, the industry will exceed 1 billion users within 6-7 years. Thus, despite the short-term buzz, the long-term outlook for blockchain technology and cryptocurrencies remain positive as the number of developers looking to make their mark on the industry continues to grow.