The Crypto Oasis Ecosystem Report 2022

Crypto Oasis, the region’s leading blockchain ecosystem, has been expanding at an unprecedented rate over the past year.  Crypto Oasis, which was named to stand out against the likes of Silicon Valley and Crypto Valley, was launched in Dubai, in April 2021.

Today, it is home to more than 1,300 organisations in the UAE alone. The forecast is to identify over 1,500 established organisations across the region by the end of 2022. The ecosystem is a collaborative platform for investors and collectors, startups and projects, corporates, science and research institutions, service providers and government entities and associations, who recognise blockchain as a potentially transformative technology with the ability to improve returns and disrupt existing business models.

Crypto Oasis — in partnership with Roland Berger — recently launched a comprehensive report to share valuable insights into some of the notable blockchain initiatives in UAE, and highlights its key pillars, including talent, capital and infrastructure. The inaugural Crypto Oasis Ecosystem Report highlights the confluence of blockchain activities in the UAE, underpinning Crypto Oasis’ role as a regional and key hub for blockchain and fintech innovation.

The Crypto Oasis Ecosystem Report is a periodic report, which will be published bi-annually, focusing on market development and emerging technologies such as blockchain, IoT (internet-of-things), AI, Web3, the metaverse and many more.

This report established the first quantitative and qualitative ecosystem study of the Crypto Oasis blockchain ecosystem and identifies its various stakeholders.  It incorporates articles from major players in the industry like State Street, Securrency, Phoenix, Virtua, DIFC, DMCC, Ripple, Simmons and Simmons, Crypto 1, Tokengate, TDEFI and many more.

The Crypto Oasis Ecosystem Report will help set the baseline from which growth can be identified in the following years as the Crypto Oasis looks to become a centre of blockchain excellence.

In a strategic partnership with the Dubai Multi Commodities Centre (DMCC), Crypto Oasis has helped numerous blockchain organisations get licences to operate in the UAE. The DMCC has a long history as a global hotspot for companies trading gold, coffee and diamonds and is now additionally adding a vertical on crypto in alliance with Crypto Oasis and other partners.

The report sheds light on this and other partnerships, which have complemented the growth of different sectors alongside the blockchain ecosystem.

Decentralised finance (DeFi)
DeFi is an emerging and rapidly developing field in the blockchain environment. In the Middle East, UAE has been at the forefront of innovation and emerging technologies. As decentralised finance gains more traction in the country, the country is cementing its status as one of the world’s most blockchain-friendly countries.

The report highlights how DeFi is making significant strides in revolutionising the world of finance and the UAE is rising up to the challenge of changing the current ways of finance and trade for the better. According to the Dubai Multi Commodities Centre, the total value locked into DeFi protocols was $20bn at the start of 2021 and increased exponentially to $260bn by the end of the year.

“DeFi created a new paradigm in the evolution of financial markets. It challenged longstanding structures in finance by taking transactional control from traditional nexus systems and handing it directly to consumers in blockchain-enabled peer-to-peer transactions,” says Manuel Rensink, head of Strategy at Securrency. The report also looks at the growing relevance of NFT-based marketplaces in the world of crypto. While the details vary from platform to platform, these types of NFT marketplaces will likely become commonplace in the near future, providing decentralised and trustless trading that’s limited only by the imagination of their creators.

The desire of companies to experiment with NFT technology is as strong as ever. Demand from companies in our sales department for NFT projects is higher than ever before. “We work with various companies from the technology, culture, media, sports, and automotive industries that want to leverage and integrate NFT technology to launch and test new business models,” says Tom Rieder, metaverse collection and advisory council, Tokengate, one of the NFT companies at Crypto Oasis.

NFTs are one of the biggest revolutions for artists and creators in recent memory. They make the digital world unique; they provide new ways for creators to receive royalties and allow artists to reach a buzzing and borderless market. However, due to their oftentimes superficial implementation, NFTs are not reaching their full potential. This also harms the long-term value for collectors,” comments Niko Kipouros, founder at 4ARTechnologies, who has brought innovative solutions to the art world, focused on pairing class-leading safety with accessibility.

“To bring in creators and collectors from outside the blockchain ecosystem, technological hurdles must be reduced, and the community opened up. Making FIAT payments and multi-chain choices for NFT minting widely available broadens the appeal immensely,” he adds.

Investing in Crypto Oasis
Dubai is known for its thirst for innovation and continues pushing the limits of new technologies to engineer a competitive economy. In the couple of years that followed, major banks and companies in Dubai and the whole UAE can be seen to have started exploring the capabilities of the technology. For instance, UAE’s Rakbank teamed up with top crypto platform Kraken to offer dirham-based digital asset trading. Kraken was the first global crypto exchange platform to get a licence by UAE regulator Abu Dhabi Global Market.

Moreover, the zeal for cryptocurrency trading globally amid the health crisis also permeated the UAE. According to a PwC report, the country’s share in the global crypto market is around $25bn in transactions, which increased by 500 per cent between July 2020 and June 2021.

By the second half of 2021, cryptocurrency trading appears to be one step closer to legitimacy within the Dubai World Trade Centre Authority (DWTCA) free zone. The DWTCA and UAE’s Securities and Commodities Authority reached an agreement that establishes a framework, allowing the regulation, offering, issuance, listing, and trading of crypto assets within the free zone. This has led to the number of well-known crypto exchanges setting up shop in the emirate.

In Dubai, the number of visitors increased by 183 per cent to 7.1 million in the first half of 2022 compared to the same period last year. Notably, Henley & Partners forecast the UAE to lead the world in attracting affluent people by the end of 2022, with a 4,000 projected net inflow of high-net-worth individuals.

The flow of capital in the country has noticeably increased as well. This is evidenced by its 46 per cent share of the total venture capital received in the MENA region and the over 26 per cent share of the total transactions in 2021. According to the Ministry of Economy, venture capital investments in the UAE actually increased by 12 per cent in 2021 compared to 2020.

The Abu Dhabi Global Market (ADGM), the International Financial Centre in Abu Dhabi, announced its framework to control operations involving spot crypto assets in 2018, including those carried out by exchanges, custodians and other intermediaries in ADGM. Meanwhile, with the launch of Virtual Assets Regulatory Authority this year, Dubai has strengthened its commitment to blockchain and cryptocurrencies.

Then, there are also venture capitalists that have shown interest in Dubai’s Blockchain climate in 2022, such as Draper Goren Holm, Woodstock Capital, and True Global Ventures. Some UAE-based venture firms have also committed significant funds to blockchain startups. One such example is the launch of Cypher Capital’s $100m blockchain-focused fund in March 2022.

“Crypto Oasis Sentio, Crypto Oasis’s investment arm is also helping to cultivate a robust blockchain ecosystem in the Middle East. It aims to invest in early-stage startups that come from the Crypto Oasis ecosystem and currently has a growing portfolio, with projects such as Grizzlyfi, UFO Gaming, Meta-Mall, Ex-Sports, Safle and others,” states Saqr Ereiqat co-founder and managing partner at Crypto Oasis Sentio.

To download the report, click here

Read: Crypto Valley Association, Crypto Oasis team up to boost blockchain development in the Middle East