Revolutionary Blockchain Trends: The Potential from 2023

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Introduction

The world of cryptocurrencies and blockchain technology is constantly evolving, and staying up-to-date with the latest trends and developments is crucial for anyone looking to invest or participate in this space. The Coinpedia Report on Web 3, Blockchain, and Crypto for the year 2023 provides a comprehensive snapshot of the evolving landscape.

In this blog post, we will summarize the key elements of the report, chapter by chapter, to give you a better understanding of the current state of the industry.

Blockchain Market Report

According to the report, the global blockchain market is on an upward trajectory, targeting $17.21 billion, with predictions foreseeing a remarkable $153,83 billion by 2029. North America leads in blockchain spending, primarily driven by the banking sector, which remains a dominant player in technology adoption.

Blockchain spending. Source: Coinpedia

A detailed exploration of blockchain spending across regions highlights the USA as the front-runner, with a significant 22.1% allocation of the overall expenditure. The banking sector’s prominent role in blockchain investment is evident, constituting 29.70%, underscoring the technology’s impact on the financial industry.

On-chain Report

The given text provides an overview of the performance of various sectors within the crypto industry in 2023.

  • Crypto Monthly Exchange Volume 2023: Binance, which had a dominant position in the market, saw its dominance fluctuate throughout the year due to competition from other exchanges like Upbit and OKX. This indicates a diversifying market that is becoming increasingly robust against single points of failure or pressures.
  • Bitcoin Futures Trading 2023: Binance started the year with a total open interest of $2.5 billion, positioning itself as a substantial stakeholder in the futures market. After a peak in July, the market swelled to nearly $13 billion, and the year-to-date figures climbed to $15.62 billion. Binance maintained its lead, with its open interest rising to $4.5 billion, constituting approximately 28.81% of the total market.
  • Stablecoin Landscape 2023: The total supply of stablecoins initially peaked at $129 billion and simmered to $137 billion by December 14th. USDT had the lion’s share of 70%, hoarding $97.5 billion, followed by USDC with 18.69% or $25.6 billion, and DAI with 3.86% or $5.29 billion.
  • DEX Scenario 2023: The DEX market cap surged to a towering peak of $133 billion in March, showcasing a market on a bullish tear. But then, gravity kicked in, and the market cap began its descent, bottoming out at $44.56 billion in September. The resilience of the DEX market is now on full display, as it stands at $50 billion mid-December.
  • DeFi Sector 2023: The DeFi sector had a ride with dizzying highs and sobering lows, beginning with a respectable $67.32 billion TVL and a $694 million volume. By March, the sector surged to a high of $95.28 billion, with volumes swelling to $2.72 billion. Mid-March brought a gut-wrenching dip, plunging the TVL to $81.02 billion despite a volume spike to $7.927 billion. DeFi rose again with the market’s October rally, pushing the TVL past the $100 billion mark to stand tall at $107 billion, paired with a robust $4.32 billion volume.
  • Web3 Gaming Ecosystem 2023: Investors are betting big on Web3 gaming, with billions pumped into gaming dApps. The cash flow was $739 million in Q1 and a whopping $973 million in Q2. Even a dip to $600 million in Q3 hasn’t slowed the pace.
Investment in Web3 gaming. Source:Coinpedia

CEX Report

The provided information highlights the performance and market dynamics of centralized exchanges (CEX) in 2023:

Combined Quarterly Spot & Derivatives Volumes on CEX:

  • After a tumultuous 2022, trading volumes on CEX started growing again and reached the $10 trillion mark in January 2023. However, the market experienced a pullback phase, leading to a decline in volumes for two consecutive quarters. The third quarter marked the end of the pullback, with volumes starting to climb up again, nearing the $8 trillion mark by the final quarter.

Market Share of Top Centralised Exchanges:

  • Binance, which once held over 50% market share, faced challenges as its lead slipped by the end of the year. Newcomers like Bybit and Bitget made their presence felt, transforming the landscape of centralized exchanges.

CEX Market Share, Derivatives Trading:

  • Binance maintained its position as the leading exchange, clinching just over half the market share at 50.9%. However, the gap is narrowing, with OKX steadily climbing and boosting its stake from 10% to 15.5% within a year. Other contenders like Bybit, Bitget, and MEXC Global collectively held a formidable 42.3% of the derivatives trade.

CEX Deposit Address Share:

  • Binance and Coinbase commanded the lion’s share of over 60% between them, with Binance holding a 32.7% share and Coinbase at 29.4%. OKX claimed a notable 8.5% share, while Kucoin secured a 7.1% share, indicating vibrant competition in the market.

CEX Active Deposit Address Share:

  • Binance and OKX exhibited vibrant activity scenes with comparable active addresses, suggesting these platforms maintain dynamic user bases.

CEX Share of New Deposit Addresses:

  • Binance and Coinbase showed a downtrend in attracting new wallets, while OKX experienced a marked uptick in new deposit addresses from the beginning of 2023, possibly fueled by a feature allowing multiple addresses per account.

DEX Report

DEX Performance: The year began positively for the DEX market, witnessing a constant rise in value due to a market pump. However, as the bullish momentum settled down, the DEX experienced a significant decline in value. Despite this, the DEX recorded a substantial trading volume of $835 billion in 2023, indicating increasing investor adoption of this network.

DEX Market Share: Uniswap continued to dominate the DEX market in terms of volume, accounting for 55.7% of the total volume traded on the platform in 2023. PancakeSwap held the second-highest share with a dominance of 15.1% and an all-time value of just over $631 billion. Trader Joe’s and Curve followed with dominances of 8% and 7.7% respectively. Other chains such as Balancer, Sushiswap, 1Inch, Maverick, and others collectively accounted for 13.5% of the market. The top four DEX platforms, including Uniswap, PancakeSwap, Trader Joe, and Curve, collectively held 86.5% of the total DEX market.

Top DEX Chains: The dominance of DEX experienced significant growth in the market over the past year, reflecting the rising interest of investors in this sector. Additionally, the DEX is anticipated to hold a massive share of the market soon, especially as regulatory crises in the crypto industry are on the rise.

  • Specific observations for different DEX chains in 2023:
    • Ethereum displayed stable growth throughout the year.
    • Tron had a stable 2023 with minor fluctuations.
    • Solana recorded low transactions until October and witnessed significant volatility during Q3.
    • BNB Smart Chain faced multiple setbacks, resulting in a challenging year for the Binance coin.

Funding Web3

Hedge Fund Crypto Motivations by AUM: Hedge funds with over $1 billion in assets under management (AUM) prioritize general diversification (50%) and long-term outperformance (38%). In contrast, funds with less than $1 billion in AUM emphasize market-neutral alpha opportunities (40%) alongside long-term outperformance (40%).

Hedge Fund Footprints In Crypto Assets: There has been a substantial increase in the allocation towards Ethereum (ETH) and Bitcoin (BTC), rising from 67% in 2021 to 91% in 2023. Additionally, there has been a significant decline in the allocation to ICOS/SAFTS, while investments in Other CEX Listed Tokens have surged from 29% in 2022 to 55% in 2023.

Blockchain Fundraising Trends: In 2023, the total crypto fund raised amounted to $9.615 billion across 1,174 fundraising rounds, a decrease from the higher total of $41.86 billion across 2,072 rounds in 2022. Despite the decrease in total fundraising value, the number of rounds remained relatively consistent.

Blockchain infrastructure fundraising saw an increase, while Blockchain Services, Decentralised Finance (DeFi), GameFi, Centralised Finance (CeFi), Chain, Meme, NFT, and the social category experienced varying degrees of increase or decrease in fundraising activity.

Seed funding emerged as the primary driver of fundraising, followed by strategic funding, pre-seed, and Series A rounds. The United States, United Kingdom, Germany, Canada, Singapore, France, Switzerland, Italy, South Korea, and Hong Kong were identified as primary hubs for crypto fundraising.

Geographical Trends in Blockchain Project Financing: The United States emerged as a robust leader in the blockchain space, followed closely by Singapore. Hong Kong, the United Kingdom, and other countries also demonstrated strengths in specific blockchain categories.

Source: Coinpedia

Crypto Adoption

The report delves into the application domains of blockchain, revealing its versatile utilization. In 2023, Digital Currency takes the lead at 33%, followed closely by Date Access and Sharing (32%), Data Reconciliation (31%), and Identify Protection (31%).

This diversity underscores blockchain’s pivotal role in enhancing security, transparency, and efficiency across various sectors. The report also provides insights into funding trends, crypto hedge landscape, and the performance of various crypto assets compared to traditional assets.

The report highlights the increasing demand for mining hardware and the rise of mining pools. It also discusses the impact of regulatory changes on the mining industry and the emergence of new mining algorithms.

Mining profitability. Source: Coinpedia

The report predicts that the mining industry will continue to grow in 2023, driven by the increasing demand for cryptocurrencies and the need for secure and efficient transaction processing.

DeFi Performance

The fourth chapter of the report focuses on the performance of the decentralized finance (DeFi) market in 2023. The report highlights the growth of the DeFi market, with billions of dollars invested in DeFi protocols and applications. It also discusses the challenges facing the DeFi market, including regulatory uncertainty and security risks. The report predicts that the DeFi market will continue to grow in 2023, driven by the increasing demand for decentralized financial services and the development of new DeFi applications.

Conclusion

In conclusion, the Coinpedia Report on Web 3, Blockchain, and Crypto for the year 2023 provides a comprehensive snapshot of the evolving landscape. The report covers a wide range of topics, from blockchain market outlook to DeFi performance, and provides valuable insights into the current state of the industry.

The report highlights the increasing adoption of cryptocurrencies and blockchain technology by mainstream financial institutions and the growth of the crypto market. It also discusses the challenges facing the industry, including regulatory uncertainty and security risks.

Overall, the report paints a vivid picture of a crypto landscape that is dynamic, maturing, and increasingly integrated into mainstream financial systems.

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