• Binance released a report that identified key trends emerging in the blockchain space for 2023 while providing a brief overview of 2022.
• Layer 1 protocols, such as Ethereum, completed major updates such as the move from PoW to PoS in September 2022.
• The year 2022 saw increased institutional adoption of cryptocurrencies and the emergence of new technologies such as blockchain-as-a-service, decentralized finance, and stablecoins.
The year 2022 was a tumultuous one for global markets due to the ongoing Russia-Ukraine war, inflation fears, falling capital markets, and persistent macroeconomic trepidations. As a consequence, central banks around the world began to increase interest rates to curb inflation and reduce the pace of economic growth. This macroeconomic pressure had a significant effect on established asset classes as well as emergent asset classes, including cryptocurrencies.
In order to gain a better understanding of the trends that will shape the blockchain industry in 2023, Binance Research, the research arm of cryptocurrency exchange Binance, released a report at the start of the year providing an overview of the key developments that occurred in the blockchain space throughout the course of 2022.
One of the major developments of the year was the advancement of Layer 1 protocols. Layer 1 refers to the foundational architecture of the blockchain, and Layer 1 protocols, also known as “the mainnet,” have distinct features such as the capacity to execute and finalize transactions on its own chain. Ethereum, one of the most popular layer 1 protocols, completed “The Merge” in September 2022 – the move from proof-of-work (PoW) to proof-of-stake (PoS).
The year 2022 also saw increased institutional adoption of cryptocurrencies, with major financial institutions such as JPMorgan and Fidelity investing heavily in the space. Furthermore, the emergence of new technologies such as blockchain-as-a-service, decentralized finance, and stablecoins enabled the development and adoption of new crypto services and solutions.
The report issued by Binance Research also highlighted the need for better regulations and oversight of the crypto industry. Despite the progress made in the past year, the global crypto regulatory landscape is still in its infancy, and there is still room for improvement. In particular, the report noted that global regulations should be harmonized in order to promote innovation and protect investors.
The report issued by Binance Research will be used as a guide for the blockchain industry as it moves into 2023. The events of the past year have laid the groundwork for increased crypto adoption, better regulations, and foresight. With the proper measures in place, the blockchain industry is likely to continue to grow and mature in the coming year.