Jump Capital predicts 2022: Stablecoin, DAO, cross-chain
Original author: Mary Liu, Peter Johnson, partner of investment company Jump Capital
said that 2022 will be another important year for encryption, and the overall theme is widespread adoption. Including widespread adoption of Stablecoins, DAOs, high-speed chains, L2 and cross-chain applications. As crypto becomes more widely accepted, traditional companies and investors will adapt to a future where crypto is embedded in every industry and most investors participate in the crypto market in some way.
For 2022, Jump Capital has 10 predictions for the top 5 crypto themes, all with the general tone of broad adoption relevant.
Theme 1: Stablecoin Leads Crypto Growth
1. Stablecoin Supply Hits $500 Billion
At Jump Capital we have long believed in Stablecoin adoption and are Stablecoin growth is included in both 2020 and 2021 forecasts, when Stablecoin supply is around $6 billion and around $30 billion, respectively. Now with a supply of over $140 billion, we have yet to see signs of a slowdown in stablecoin adoption and believe there will eventually be trillions of stablecoins.
In 2022, we are particularly excited about the growth of Stablecoins for non-transactional use cases. Historically, stablecoins have been used primarily for transactions, but 2022 will be the year when their use for cross-border payments and as a safe-haven asset for countries with unstable currencies becomes more visible and a bigger growth driver.
2. USDC, UST take market share from Tether
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In the Stablecoin market, we believe most of the growth will come from USDC and UST as they establish themselves as the dominant centralized and decentralized Stablecoins. With the growth of USDC and UST, the market share of USDT (Tether) will drop significantly.
Theme 2: Development of DAO and DAO Infrastructure
1. DAOs have grown exponentially as coordination tools
Decentralized Autonomous Organizations (DAOs) can Global coordination of individuals using blockchain-based governance. DAOs can be used for many purposes, including managing the operations and capital of a blockchain project (MakerDAO), managing investment capital (The LAO), managing usage of game assets (YGG DAO), coordinating cultural circles (Friends With Benefits) or coordinating assets Purchase (Constitution DAO).
We believe that Constitution DAO is a watershed moment for DAOs as it raised over $40 million, demonstrating thousands of Humans have the ability to coordinate their funds and efforts towards common goals. By 2022, we believe DAOs will gain massive traction as the next generation of ways to coordinate global investments and communities. Trying to buy a copy of the U.S. Constitution is just the beginning; in 2022, there will be multiple DAO financings of over $100 million, and they will have their eyes on something bigger.
2. DAO governance design and infrastructure are mature
As crypto networks have been iterating on governance models to govern network decisions and communities, we are in the early stages of defining and agreeing on the full scope of a DAO.
We believe that by 2022, many crypto networks will have made significant progress on their journey to decentralization, Governance models will gradually mature to enable effective management of these DAOs, and this maturity will be achieved through enhanced DAO tools and infrastructure that we plan to see this year.
Theme Three: High Speed Chain, L2 and Cross-Chain Applications Driving Widespread Adoption
1. High-speed chain continues to grow and L2 takes off
2021 witnesses This has led to the early rollout of high-speed/low-cost blockchains like Solana, Terra, and Avalanche, Ethereum sidechains like Polygon, and Ethereum L2 scaling solutions using Optimistic and Zk rollups.
We are bullish on all these solutions as transactions are increasingly migrating from L1 Ethereum and exponentially The growing "pie" creates room for winners of all kinds (at least in the short term). These high-speed chains and L2-enhanced user experience are a key part of achieving mainstream adoption and will be a key part of the cryptocurrency narrative in 2022. Ultimately, winners (and losers) will be decided, but in 2022 we're betting on strong growth across the board.
2. Cross-chain use becomes seamless
Currently, the L1 and L2 blockchain ecosystems are rather siled, and the bridges between the ecosystems are often either complex or rely on centralized exchanges. By 2022, solutions such as Wormhole will make huge strides in enabling seamless movement of assets and information between blockchains, and applications will smoothly transmit transactions to the best blockchain for their purposes.
Theme 4: Every (innovative) company is a crypto company
1. Financial institutions, advisors and fintech companies offer crypto products
Cryptocurrency will eventually becomes too big for financial institutions, financial advisors, and traditional fintech firms to ignore, and 2022 will be the year of launching cryptocurrency products to clients. Allowing the buying and selling of cryptocurrencies will be table stakes, with more forward-looking companies offering cryptocurrency-backed loans, high-yield savings accounts, and other products that leverage cryptocurrencies.
As more and more financial institutions offer crypto products, we also expect the product offering to mature and in particular Bullish for the growth of the options market, which allows market participants to take more granular hedging or speculative positions and for creating structured products. Options currently account for less than 2% of crypto derivatives trading volume, and we expect this to grow significantly in 2022.
2. Game studios go all out to embrace encryption
2021 has seen the rise of crypto-based “play and earn” games led by Axie Infinity, where players can earn real economic value from their gaming activity. The success of Axie and other blockchain-based games has resulted in a plethora of crypto games—many of which are mediocre games that are unlikely to have staying power.
However, we believe that the realization of the game concept of true ownership will be the foundation of the future of games. In 2022, we expect traditional game studios to enter the crypto gaming space, launching a new generation of crypto games that offer not only financial incentives and true ownership, but also best-in-class gameplay.
3. Encryption begins to eat the world
Early adopters of the Internet were referred to as "Internet companies" or "Internet companies," but as Internet adoption crossed adoption cycles, these monikers fell out of use.
Similarly, over time, most companies will adopt encryption in some way -- by providing Encrypted products, utilizing Stablecoins as payment channels, enabling Web3 wallet logins, utilizing NFTs, having Token-curated communities, or various other use cases. By 2022, we expect widespread adoption of encryption across many industries, and we expect this trend to accelerate further in the coming years.
Theme 5: Every VC is an encrypted VC
1. Record amount of VC funding deployed into cryptocurrencies
First 9 months of 2021 , Encrypted startups invested $15 billion, which is equivalent to nearly 5 times the total investment in encrypted startups in 2020. That may seem like a lot, but it was only about 3% of total VC funding during this period.
In 2022, we expect a significant increase in VC investing in crypto as traditional VC funds rush to allocate For crypto-native projects, and attracted by the integration of crypto and various other industries. The increase in crypto venture capital funding will also be driven by multiple recently announced crypto funds exceeding $1 billion, with more crypto funds to be announced soon. In this capital-laden industry, the most successful investors will go beyond just funding to help build products, provide liquidity, recruit talent, scale organizations, grow communities, engage users, and participate in governance.
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