Binance Report Paints Worrying Picture

Please fol­low and like us:
Pin Share

Binance Research has iden­ti­fied some key trends in a 2022 report and themes to watch for the year ahead.

Binance Research is the research arm of Binance, the world’s most pop­u­lar cryp­tocur­ren­cy exchange.

The paper, called ‘Full-Year Review 2022 & Themes for 2023,’ point­ed to a steep decline in total val­ue locked (TVL) as a result of what it called ‘exoge­nous mar­ket events.’ TVL is defined as the total val­ue of cryp­tocur­ren­cy locked in a smart con­tract and is used to mea­sure the health of a DeFi protocol.

Cur­rent­ly, TVL is val­ued at around US$40B, or rough­ly 25% of what it was at the start of the year. The report also points out that DeFi entered 2022 already in a bear mar­ket. A pic­ture that the wider Web3 envi­ron­ment would fol­low only months later.

Late Spring’s col­lapse of the UST sta­ble­coin trig­gered a flight from the DeFi ecosys­tem that still hasn’t reversed.

Q3 and Q4 Were Rough For NFTs, Says 2022 Report

The 2022 report is dev­as­tat­ing for the NFT mar­ket, with 83% of all sales tak­ing place in the first half of the year, rep­re­sent­ing $18.3 bil­lion dol­lars. How­ev­er, the mar­ket saw a 10.6% increase year-on-year. The mar­ket reached its nadir in Octo­ber before very mod­est gains in Novem­ber and Decem­ber. By the end of the year, sales were a tiny frac­tion of January’s figures.

The implo­sion of UST sta­ble­coin and con­ta­gion from Three Arrrows Cap­i­tal are cit­ed as causes.

Source: Cryp­toslam, Binance Research

Accord­ing to Google Trends, inter­est in NFTs peaked in Jan­u­ary before declin­ing through­out the year. A rel­a­tive­ly small num­ber of enthu­si­asts also sus­tained the mar­ket. The num­ber of unique buy­ers and sell­ers has approx­i­mate­ly halved com­pared to the start of the year.

In addi­tion, blockchain-based games con­tin­ue to grow, but momen­tum has slowed. There were crit­i­cisms about the qual­i­ty of game­play and the robust­ness of toke­nomics in many play-to-earn games. After a bumper 2021, inter­est in the Meta­verse has also declined.

Things To Watch In 2023

As growth oppor­tu­ni­ties from with­in the cryp­to ecosys­tem become hard­er to come by, Binance Research pre­dicts the tok­eniza­tion of assets will become a greater focus. The indus­try has also lost a sig­nif­i­cant amount of trust with regulators. 

Gov­ern­ments look less kind­ly on Web3 than they did the year before. As such, reg­u­la­tions will be tighter than they oth­er­wise would’ve been, but the indus­try will gain greater clar­i­ty on a num­ber of fronts. A pos­i­tive devel­op­ment for long-term growth.

Accord­ing to the paper, NFTs will increas­ing­ly become about util­i­ty and move beyond pro­file-pic­ture NFTs. Real-world use cas­es will be the next dri­ver of adoption. 

You can read the full report on Binance Research’s web­site.

Disclaimer

BeIn­Cryp­to has reached out to com­pa­ny or indi­vid­ual involved in the sto­ry to get an offi­cial state­ment about the recent devel­op­ments, but it has yet to hear back.



Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *