Crypto Market Trends In 2023 | Part 1

In 2022, there are many trends taking place, but instead of opportunities and profits for investors, there is fear and disappointment for the few people remaining in the crypto market. The collapse of Luna – UST, FTX, 3AC, Celsius,… has swept the last assets of holders into dust along with pessimism about the crypto market in the upcoming 2023.

However, the crypto market is always full of problems unexpected and unpredictable. Who knows, maybe the market will go completely opposite to predictions from users or Wall Street. And if that has a chance to happen, it’s best for us to be prepared for future trends.

And now let’s start with the article about predictions about crypto market trends in 2023.

5 Trends That May Happen in 2023

Arbitrum ecosystem + Real Yield + Delta Neutral

The lesson of Optimism was very clear when the project launched tokens and extracted a large amount of tokens for projects in the ecosystem to use as Liquidity Mining to attract users and cash flow. Optimism could have been much more successful if their ecosystem had unique projects that could retain cash flow and users, but they didn’t.

The Arbitrum ecosystem is solving a large part of the problems that Optimism has not been able to do, which is creating unique projects and having significant innovations for the market. Currently, there is some leaked news that Arbitrum will deploy tokens and retroactives to users in Q1 2023. And the scenario we can temporarily predict is:

• Step 1: Arbitrum launches a token to deduct about 30 – 50% for projects in the ecosystem to use as Liquidity Mining and retroactive for users.
• Step 2: With an abundant source of incentives in a market situation where no one has any, all remaining users in the market will flock to the Arbitrum ecosystem.
• Step 3: Promote the Real Yield keyword on all social networks to create a trend. The Real Yield movement is very easy to understand, easy to access and very easy to fork, so the Real Yield movement is completely qualified to form a big trend in the market => Continue to attract the market.
• Step 4: Building a solid foundation of development projects according to the Delta Neutral strategy, in my opinion, this strategy is more difficult to push into a trend than Real Yield, but it has a great effect in retaining LPs in the ecosystem. Thai Arbitrum. Remember in DeFi, liquidity is king.

Above are the steps to attract new users and new cash flow to the ecosystem, now we will ask the question: “How to retain users and liquidity providers?”. It is very clear that the Delta Neutral strategy was created to retain LPs, but most users will stay because Derivatives on Arbitrum are extremely powerful and diverse. Why can Derivatives retain users?

Remember that in the crypto winter, trading activities are rare activities that bring profits to investors. With GMX Perpetual platform being very popular, GMX will certainly be a strategic card to help the ecosystem. retain users.

However, every trend has risks that need to be anticipated in order to avoid:

• Most native projects on Arbitrum are built on GMX’s yield source or LP Token, so if GMX has problems, projects built on GMX’s operations will certainly be affected. Besides, GMX accounts for nearly 40% of the TVL of the entire ecosystem, so if GMX catches a cold, no one can guarantee that the Arbitrum ecosystem will be shaken in the short and medium term.
• When incentives run out, there will definitely be a number of users leaving because no matter how good it is, it cannot guarantee 100% user satisfaction, so have a clear strategy when the incentive source on Arbitrum gradually decreases.
• The number of scam projects is increasing because forking on Arbitrum is extremely easy so be very careful. For example, Dictum – AMM platform, after allowing users to buy Public Sale and Farming, withdrew the pool and stole all of the user’s assets.
• Buy tokens of Farming projects with high APY. This often happens with AMM and Lending projects.

Note: The trend does not necessarily have to be followed step by step as I shared above. There should be preparations for all possible situations.

And below is a summary of all the articles about the Arbitrum ecosystem, the Real Yield movement and the Delta Neutral strategy produced by the Weakhand team.

• Summary of Potential Projects on the Arbitrum Ecosystem
• What is Real Yield? New Breeze for the DeFi Market
• What is Delta Neutral? When The Game Is Built Around GMX
• The Mystery Behind rDPX’s 305% Growth. Will rDPX continue to grow?

Options take the throne with solutions to limit risks for LPs

In a bull market, everyone accepts small to large risks as long as they make a profit. To put it simply, when the market is in an uptrend, profits are of more concern. . In a market in a long-term downtrend, investors are more concerned with risk than returns.

That’s why projects that address risks for users, investors or liquidity providers receive the most attention. In DeFi at this time, liquidity and LPs (liquidity providers) are given top priority. nProjects that solve problems and risks for LPs will get the most attention.

Firstlyfrom my perspective, Uniswap V3 is probably a long-standing innovation of AMMs and in the near future there may be stories of AMM projects using the delta neutral strategy to protect risks or what everyone sees. Keywords such as hedge. hedge for liquidity providers. To put it simply, with this strategy, Impermanent Loss is almost eliminated when LPs providing liquidity on the AMM platform use that strategy directly or indirectly.

Some prominent projects that are applying the delta neutral strategy to LPs are Lyra and GammaSwap.

Next, the Delta Neutral strategy is also being applied by Yield Farming projects to protect farmers’ positions while safely generating profits. In essence, liquidity provision activities are part of profit-making activities in Yield Farming, so these projects also have a mechanism to help LPs eliminate IL. For example: Francium.

Often projects can make their own strategies or use the services of a certain Option platform to open Long – Short positions, so if the Delta Neutral strategy takes place, the related Option platforms will certainly be successful. benefit.

It can be said that after Uniswap V3 and the story of liquidity concentration, the Dealta Neutral strategy will be the next development highlight of the AMM segment.

Layer 2 and zkEVM

The fact that the whole community focused on doing airdrops/retroactives after Aptos suddenly distributed money has caused the community to rush to do airdrops and certainly Layer 2 – where many projects calling for huge capital have not yet launched tokens. Therefore, Layer 2 has occupied the spotlight of the entire crypto community in the fourth quarter of 2022.

Besides, the fact that at the same time Polygon, ZkSync and Scroll all announced preparations to release zkEVM – one of the most important updates to ZkRollup solutions has made the community pay attention to it. We often know that ZkRollup solutions use a separate programming language such as StarkWare using Cairo or ZKSync using zinc, so the ZkRollup development solutions that need to be developed are zkEVM. With zkEVM, projects on Ethereum, EVM BLockchain or Optimistic Rollup Chains can easily expand to ZkRollup solutions. According to most big names in the Crypto market, including Vitalik Buterin, the best L2 solutions in the short and medium term are Optimisitc Rollup and in the long term is ZkRollup.

In short, zkEVM opens a new era for ZkRollup solutions in particular and for the Layer 2 market on Etheruem in general.

Some outstanding projects include:

• Arbitrum with incentive program (possibly in the future), Real Yield movement and strategic rotation projects Delta Neutral and GMX.
• Optimism with the next Airdrop deployment and Bedrock update ahead is expected to make the network faster and cheaper.
• ZkSync with the launch of a full update to zkEVM and Layer 3 developments in the same year 2023.
• StarkNet with fullmainet deployment and projects starting to simultaneously deploy on the StarkNet ecosystem.
• Polygon may soon release zkEVM in the near future.

SocialFi: Social Network Incorporating Decentralized Finance

SocialFi stands for Social Finance which is a combination of Social Networking and Finance. The possibility of this trend not only stopping in the crypto market but also expanding beyond the traditional market when Twitter hinted at token deployment, Telegram was also secretly behind TON Blockchain or Discord also hinted at token deployment . If all three of these platforms also deploy tokens at the same time, what will happen… However, this case is relatively difficult. Launching tokens may be difficult, but these platforms supporting the first blockchain-related products such as accepting NFTs as avatars are the first steps of Twitter, Facebook, Instagram,… into the market. blockchain school.

Returning to the crypto market, the recent trend of decentralized social networks has emerged thanks to the attraction of the Lens Protocol ecosystem, Binance’s next Launchpad project is Hooked – the Lear to Earn platform and a number of other projects. another sentence. Although Decentralized Social Network projects do not bring a really good experience to users, they promise to bring a place where content creators are treated more equally and users have information security. More trustworthy than current social networking platforms.

Some outstanding projects in the SocialFi segment include:

ChatGPT- Opens up the trend of Artificial Intelligence

ChatGPT is a product of a technology company invested in by Elon Musk. I can say that I have never talked to an AI that is so smart, especially when it speaks Vietnamese and cannot distinguish between the machine and the person speaking.

It seems a bit far-fetched to say that this bot can create an AI trend in and out of the crypto market. Although it is not clear, we should be carefully prepared. Some outstanding projects in the AI ​​segment according to CoinmarketCap include:

• Ocean Protocol: This is a data exchange where you mint or buy and sell information through the Computer to Data mechanism.
• The Graph: The project is about querying data on the blockchain, temporarily understood as the Google of Blockchain. Through The Graph, users can find all on-chain information.
• Fetch.ai: Is a network that provides infrastructure to build and develop DeFi automatically thanks to AI technology.

Summary

Above are some trends that may take place in the upcoming 2023. However, not all of the above trends happen, so our job is to prepare with complete knowledge so that whatever trend occurs, we can immediately fight it.