The year 2021 marked the beginning of the mainstream adoption of cryptocurrency. It wasn’t just that some tokens made massive gains, with the likes of rising by 60%, up more than 400% and gaining an impressive 1,300%. Instead, the main reason was institutional investors and large corporations embracing crypto, as well as the innovative and integrated nature of the DeFi, NFT, and Metaverse spaces.

You can also add to this the support for crypto from many well-known people like Elon Musk, Eminem and many other prominent personalities. There are plenty of reasons why 2021 is the most important year. What’s next in 2022?

One thing is certain, crypto has a tough act to follow and while no-one is predicting a 2018-style meltdown, the reality is that the market may struggle to match last year’s stunning gains. There are many bright spots within the crypto market that you should be keeping an eye out as we enter the New Year.

1. DeFi to increase financial inclusion and offer more opportunity

In 2021, the decentralized finance market, which allows financial products to be made without the need for intermediaries like banks, proved its viability. With adoption growing across the space, it’s expected that by March of this year, DeFi contracts will have a combined value of $41 billion. DeFi dApps in the future will be a pivotal year, with hundreds of new DeFi dApps.

DeFi is expanding because it offers true financial freedom to its users, as well as banks for the unbanked. There are real opportunities to invest for millions. One of the most sought-after areas of DeFi investing, yield farming, incentivizes crypto asset owners to create decentralized networks. Compound Finance Protocol is one of the most well-known DeFi apps. It allows users to provide liquidity in various liquidity pools as long as they own an Ethereum wallet. Users also earn rewards that are consistent with its core principles.

DeFi allows for more complicated and potentially better financial instruments. Synthetix issues synthetic assets, in the form ERC-20 smart agreements that track and return on cryptocurrency assets. SynFutures allows users to create and trade Ethereum-based cross and off-chain assets. SynFutures uses a Synthetic Automatic Market Maker to allow users to only hold one trading pair, while a smart contract synthesizes the other.

The beauty of such DeFi apps is they enable exposure to assets that investors cannot access and potentially make sizable gains if they’re able to predict market movements.

2. The imagination continues to be captured by NFTs

The 2021 total sale volume of non-fungible tokens surpassed $20billion, putting them in high demand. There were many high-end items, including a JPG by Beeple that sold for $69M. Numerous other multimillion-dollar sales, such as the Bored Ape Yacht Club’s record-breaking sale of CryptoPunks NFTs, also led to the spotlight.

While the euphoria and eye-watering price tags of NFTs may start to fade, there’s no doubt NFTs are here to stay. They have many uses, including in gaming, the real estate, and tokenization of assets. NFTs can also be used by musicians and artists to earn automatic royalties on the sale of their work. The NFTs can be used to fractionalize real estate ownership, which allows them to expand their market reach and potentially attract millions of customers.

It means there’s a bright future not only for NFTs, but also for the marketplaces that sell them. OpenSea currently holds more than 60% in total revenue in this space. Keep an eye on Infinity, a decentralized platform that is expected to grow in popularity. Infinity, a marketplace for NFTs that is decentralized and open to all members of the community, aims improve OpenSea. Infinity plans on evolving towards a direct governance structure in partnership with Common Protocol. Infinity will make it easy to list NFTs, and at a lower price, by simply charging a 1.5% transaction fee which goes to its community-controlled treasurery.

3. Year that defines the Metaverse

Because of its interactive nature, the Metaverse will be a catalyst for social interaction, commerce, games, education and business.

There is great potential in the idea of the Metaverse. It is an interactive digital realm that blends technologies like VR, AR and digital video. Users interact with digital avatars. It promises to bring the digital world closer together, streamlining our connectivity and improving our online interactions.

While Mark Zuckerberg has been one of the most vocal proponents of the Metaverse, it won’t be Facebook (NASDAQ:) that dominates it. It will not be Facebook (NASDAQ:) that dominates the Metaverse. Instead, the truly decentralized metaverses will capture the attention of the masses. We’re talking of worlds such as The Sandbox and Decentraland, where dwellers of those virtual universes are able to secure the rights to digital plots of land through NFTs. Play-to earn gaming is another popular Metaverse concept. DEA created a virtual culture based around its Play Mining platform. This allows users to explore new worlds, fight and complete tasks, and trade those resources with other players.

While the Metaverse may still be young, it is not yet fully developed and we don’t know what it will look like. 2022, however, will mark the beginning of the Metaverse. This decade will see the evolution of the Metaverse, influencing how people interact in virtual spaces.

4. Use Web3 to get more people on board

A Web3 ecosystem is being created through the convergence between NFTs, DeFi, and Metaverse. All indications suggest that 2022 could be its year.

Web3 represents the next stage of internet development. It began as the static Web1, which was well represented by AOL and Netscape. Web2 was much more interactive, but it was dominated by large corporations such as Google (NASDAQ:), and Facebook. With Web3, we will see an internet that’s fully decentralized and permissionless, where users gain control of their data.

Web3’s main driver will again be play-to earn gaming. Users can make and trade NFTs while playing games to make money. As evidenced by its over 2,000,000 monthly active users and a 150 million-dollar Web3 gaming fund, P2E gaming is already thriving.

Web3 doesn’t just focus on gaming. Siacoin is a marketplace and decentralized cloud storage system that encrypts and distributes files over its network. Siacoin gives users the ability to manage their encrypted keys. This allows them to own their data and is a great alternative for traditional cloud storage.

Then there’s Lum Network, which aims to revolutionize the world of product reviews by providing incentives for companies to reward people who take the time to write an honest review, no matter if it’s positive or negative. Lum Networks uses a blockchain-based, decentralized reward system that allows users to verify their records. This means anyone can check the immutable records of any reviewer and see if a 1-star review was awarded. The system pays out rewards according to the quality of reviews, rather than how many stars they are awarded.

5. Collaboration between DAOs for the benefit of their communities

In 2021, decentralized autonomous organizations (also known as DAOs) had a record year. They are rapidly becoming community-led organizations that serve a variety of purposes such as fundraising and investing.

DAOs can be used as an alternative structure to large corporations’ traditional boards and offer crypto companies a fresh way to become public. DAOs are used to govern some of the most well-known DeFi apps like MakerDAO. They allow for protocol development and treasury management through smart contract blockchains.

You can invest in some of the most well-known DAOs. BitDAO is one such DAO that invests in DeFi projects. According to BitDAO’s website, it currently holds more than $3Billion in assets. Another example is PleasrDAO, which was formed by NFT collectors, digital artists and DeFi leaders to buy Pplpleasr’s Uniswap V3 NFT. Since then, it has acquired many other digital artworks and was able in June to obtain a loan of $3.5 million using its NFTs that are high-value as collateral.

GoodDollar (a DAO in the making) is aimed at encouraging other DAOs, such as DAOs, to assume more social responsibility and support universal basic income distribution. GoodDollarV2 was launched in December and is a standard for UBI distribution. It leverages yield farming and liquidity mining to generate capital flows towards the protocol. The result is crypto-based UBI.

It’s an initiative that’s likely to gain steam, because as 2021 has shown, the idea of specific purposes and identity-based DAOs that have the interest of their community at heart has already caught on. We can expect more DAOs to increase collaboration and act in the best interests of their communities as we move into 2022.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. This article is not intended to be used as investment advice. CoinQuora urges users to conduct their own research prior to investing in cryptocurrency.

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