Comments on Pantera Capital’s Predictions for the Crypto Market in 2022

[ad_1]

One of Pantera Capital’s investors, Paul Veradittakit, had the courage to make predictions for this year in the tumultuous world of crypto. Even if we applaud courage, we will put holes in it. Because it’s the Internet and that’s what we’re doing here. To be clear, the author reviewed the main trends of 2021 and extrapolated them into the future. Which is a fairly safe technique.

Related Reading | Sports NFT Marketplace Lympo Suffers $18.7M Hack

Considering Pantera calls itself the “first US institutional asset manager focused exclusively on blockchain,” you know Veradittakit barely mentioned Bitcoin. What follows is purely cryptographic business. It should also be noted that the biggest criticism of Web3 is that it is venture capital backed and they are the ones who will ultimately benefit. Well, that’s exactly what Pantera is and does.

Either way, let’s explore Veradittakit’s insights and predictions.

Pantera on L2s and accumulations

Surprisingly, the article begins by throwing Ethereum under the bus. According to Veradittakit, all the action will take place on the L2s. These have grown tremendously in 2021, and Pantera’s investor sees them as essential to Ethereum’s scalability.

“As mainstream crypto adoption continues to grow, Ethereum’s network congestion will only worsen, exacerbating its latency and fee issues. Rollups are critical to supporting Ethereum’s growth by ensuring that the compute infrastructure is highly scalable, allowing users to interact with dApps with similar or even better usability expectations than with traditional web applications.

Reading between the lines, this prediction also indicates that Ethereum will not release any of its network upgrades this year. Which seems right.

Pantera on non-Ethereum/Bitcoin chains

This prediction refers to the battle of the L1s, or the supposed Ethereum killers. The Pantera investor is obviously in favor of one in particular:

“Recent activity from the Solana community, including the launch of massive social media and decentralized gaming funds, suggests that the ecosystem will continue to grow tremendously in the coming year.”

First of all, you can’t have “decentralized social media and gaming” in a centralized platform like Solana. Second, Veradittakit fails to mention Solana’s constant technical issues and outages. Do whatever you want with it.

Another trend mentioned by the author concerns bridges, “which allow interoperability between very different networks”. He considers that these will “accelerate the growth of non-Ethereum ecosystems”. Or, to put it more bluntly:

“Overall, these advances in cross-chain infrastructure will accelerate the rate at which alternative layer-1 chains will gain traction, fostering the development of a truly robust and diverse multi-chain crypto ecosystem.”

What investor Pantera really means is that all other L1s will continue to wash over Ethereum. Which seems fair.

SOL Price Chart on FTX | Source: SOL/USD on TradingView.com Veradittakit on Composability and Web3

This theme joins the previous one. However, the Pantera investor brings up a very interesting subject:

“Decentralized identity projects, which allow users to retain full and more granular control over personal data and reputation, enabling use cases around unsecured lending, know your customer (KYC) rules, and more.In 2022, we will see more projects expand the scope of on-chain ownership, allowing users to have complete functional control over their identity and assets in the digital world.

One thing is certain, the world needs “a single connection for all services”. No one can manage how many passwords we are supposed to remember. This is a real problem. In the article, however, the author focuses on Ethereum-based solutions. We would like to mention that there is an alternative that uses the Lightning Network. And, you know, it works on a network that’s actually decentralized.

Pantera on expanding NFTs

This is his least controversial take. Veradittakit believes that “NFTs will continue to gain tremendous popularity over the coming year.” He specifies :

“NFT projects in 2022 will show much more diversity in use cases and reshape the way we interact with and think about digital media ownership more broadly.”

However, to paraphrase Vitalik, NFTs have to go through a bear market before they can be considered a success. Will there be a bear market in 2022? Probably not. So, Pantera’s prediction holds.

Veradittakit on Decentralized Autonomous Organizations

This prediction is also fairly uncontroversial:

“Given their increased prominence, I expect to see DAOs become a mainstream means of online organizing and collective action, helping individuals around the world get meaningfully involved in causes that matter to them. to heart.”

And the Pantera investor continues with this one:

“As DAO operations become increasingly complex, I expect to see even more projects building DAO tools and infrastructure in 2022.”

More DAO and tools to manage them? It just seems right.

Related Reading | Solana: A quick review and a glimpse into the future

Pantera on DeFi security

This prediction begins with some frightening statistics:

“Over $610 million was stolen via DeFi exploits in 2021 (an eightfold increase from $77 million in 2020), and an additional $704 million in funds were stolen and later returned by hackers computers, like those behind the $600 million PolyNetwork exploit. .”

Considering 2021 was the year of DeFi, this should come as no surprise. Criminals follow success and attention. In any case, look at these numbers and extrapolate them to what they would be if DeFi reached mainstream status.

“In 2022, I expect security to become a major focus for DeFi projects and plan to launch several other projects around better smart contract auditing, granular execution monitoring and consumer protection.”

The question here is, is it enough? Or are smart contracts a security risk by definition? Will anyone be able to build an unhackable DeFi protocol? Who will win this race?

Featured Image by JohannaIris in Pixabay | Charts by TradingView

[ad_2]