Alternative Layer 1 blockchains, NFTs, DAOs, the metaverse? How will the blockchain ecosystem evolve in the coming year? We asked some of the experts at the European Blockchain Association. Here is what they see, expect – and sometimes worry about.
I expect improved privacy, quality, and algorithm changes on social media. By the end of 2022, all major social media platforms will have changed their privacy rules and altered their algorithms with an eye on privacy and content quality. A new tribe of creative influencers will emerge and have a significant impact on branding and engagement. We are on the way to the Web 3.0. Users can engage, socialize, explore, and produce content in a virtual world, and use blockchain technology and cryptocurrencies to monetise their virtual transactions. NFTs and cryptocurrencies, which commercialize interactions by creating or selling digital artefacts, are inextricably related to the metaverse (or Web3). Web3 is predicted to be a major commercial issue by 2022, with major brands such as Nike, Adidas, Gucci, Prada, Puma, Microsoft, and others supporting it. Crowdfunding and Fintech (financial technology that automates and improves financial services) will enable investors of all sizes to participate in a diverse variety of assets. Critical to the adoption of these new digital trends are however faster connections delivered by 5G and the new Wi-Fi 6 standard.
I am excited to see more use cases and adoption of alternative L1 blockchain solutions. Polkadot’s parachains, Harmony, Flow, Avalanche, Cardano, Solana – all these chains are mainly done with their development and created huge ecosystem development funds. Also, I expect the rise of DAOs. More and more people are going to work for DAOs. and we will see an explosion in DAO infrastructure development. One of the most important elements will be the design of effective tools for power and wealth distribution. Leading tools are coordinape and SourceCred but many more will emerge.
A worrying development I see in self hosted wallet hostile regulations under the umbrella of AML & KYC like seen in Estonia.
The governance system offered by DAOs (Decentralized Autonomous Organizations) cannot remain within the narrow scope of corporate governance or accountable and ethical management of business budgets. The central argument raised by designing governance systems in future corporations is that creating corporate governance or an economic system is limited compared with the need to manage such large communities. This system creates a basis for extensive global communities. To allow for democratic, cooperative, and equitable conduct, these should implement a governance model from the field of state governance, a system assisting with preserving balances and brakes for preventing centralization, together the corporate effectiveness structure, creating a “network constitution” to comprise a whole system of norms, morality, values, and inclusive governance.
2021 was the year of NFT’s and massive investments in the Metaverse. In 2022, the challenge will be to provide clarity about their sustainability, value, and benefits. This would certainly include greater clarification on regulatory frameworks and environmental issues, as these were constant topics in 2021. In addition, the tremendous speed of innovation made it nearly impossible in 2021 for all participants to stay up to date with the market developments. With the negative effect of creating island-solutions and a highly fragmented ecosystem. I believe 2022 will see participants seek collaborations and more exchange of information in order to enhance synergies and efficiency, ultimately to create a harmonized and defragmented ecosystem for NFTs and the Metaverse. The EBA can and will play a significant role to support this much needed consolidation phase.
Decentralized Identities in Web3 are gaining increasingly more traction through the evolvement of SSI protocols and use cases. This space is continuously attracting more interest, which we are also feeling at the SSI Working Group here at the EBA. However, real-world identities in the Web3 are barely a topic. This is on the one hand due to the in general pseudo-anonymous nature of Web3 and on the other hand due to the complex and annoying KYC methods that are common today. For instance through uploading pictures of your ID, proof of residence and video-identification. In 2022, I hope we can establish a simple, automated way of bridging real world identities into the Web3 space with SSI technology to bootstrap adoption and legal appreciation of services that require identification in a trusted, privacy-preserving, secure and useable manner.