Powerful Web3 Trends In 2024 You Need To Know About
We can all agree that 2023 was indeed a rollercoaster of a year for the Web3 space and many other industries, from major banks collapsing earlier in the year to speculating on the next crypto bull run less than 10 months later. All the things we’ve seen in the last year make us wonder what Web3 trends we can expect in 2024.
What Web3 Trends We’ve Seen in 2023
Before we jump into analyzing the hottest Web3 trends in 2024, let’s take a look at an overview of what exactly we’ve seen in the past year. This will allow us to better understand where the industry is headed and why.
Reflecting on the Web3 trends in 2023, at the start of the year, it seemed like DeFi was getting slowed down by a variety of factors it couldn’t control, such as the regulatory environment, many hacks, and dwindling investments in the sector.
After the last bull run, the total value locked in some of the biggest DeFi ecosystems remained stagnant for almost the entire year. That trend has only recently started to change, but it’s still nowhere near what it was in the years prior.
Graph Source: The Block
The graph shows us that not nearly as many individual investors and institutions are interested in DeFi at the time of writing. Why is that?
DeFi has experienced a lot of regulatory uncertainty in the past year, and it doesn’t seem like it’s getting better any time soon. This is one of the main reasons why institutions are hesitant to invest more in the more promising DeFi ecosystems.
Security Concerns & Trust
Another reason why DeFi has been stagnant is because of all the hacks and exploits we’ve seen in 2023. DeFi has been grappling with security issues. The nature of DeFi protocols, being open-source and operating on public blockchains, makes them attractive targets for cybercriminals.
While the amount of funds lost has decreased compared to 2022, it still hasn’t been enough to recover the trust users had in DeFi.
Since DeFi is just one piece of a much larger blockchain puzzle, it is susceptible to the influence of other sectors. Since the entire blockchain ecosystem has been on the decline for most of the year, so has been the case with DeFi.
Now that the market is recovering, so are some of the more promising DeFi projects.
Overall Trend Explained
While the situation hasn’t been perfect for DeFi projects, that doesn’t mean that there haven’t been real success stories in the DeFi Ecosystem. Many projects are continually working on improving their products and getting ready for the year ahead.
To attract more capital and mainstream investors, DeFi must prioritize security and consumer protection, integrating enhanced security features at the network level.
As DeFi aims for recovery in 2024, balancing decentralization with consumer trust is key to changing its perception and attracting more users.
In 2022, everyone was talking about NFTs and their huge potential. What has happened in 2023 with our favorite NFT apes, cats and punks?
Well, the situation hasn’t been good, to say the least. Some of the top NFT’s have declined in value more than 90% while some others are completely worthless.
There are countless examples of NFT investments gone wrong, like Jack Dorsey’s $2.9 million dollar NFT tweet having the highest bid of just $800, or Justin Biber’s Ape NFT purchased for $1.3 million with the current value of just around $60,000 dollars.
The decline is even more evident when we take a closer look at the Google search trends.
Does this mean RIP for NFTs?
Well, not really and here’s why.
Even though the initial hype has died down, that doesn’t take away the actual practical applications that NFTs can utilize in real estate, gaming, and digital identity fields.
Many projects are evolving and discovering new ways to utilize NFTs in their products, providing fresh applications for these types of tokens.
NFT platforms like eesee are gaining considerable attention in the last few months highlighting the importance of continual innovation and the potential of GameFi. We’ll cover the GameFi trend and its potential later.
What is Going on With Metaverse?
Another major buzzword in the last couple of years was “Metaverse” and it seems like we don’t hear it as often anymore.
It all started in 2021, when Facebook rebrand to Meta signaled a major commitment to the Metaverse, coinciding with the rise of remote work and virtual interactions.
However, the Metaverse hasn’t fully materialized as expected. The main blockchain metaverse project, Decentraland, struggled along with other similar projects. Technical challenges, and a lack of immersive experience are just some of the reasons why metaverse has been on the decline.
The technology, including VR, hasn’t matured enough, and there’s a disconnect between the vision and current user engagement.
Meta’s shift to focus more on AI and gradual improvements in VR and AR technologies indicate a slower, more incremental move towards the Metaverse concept.
We can expect improvements in virtual and augmented reality tech, making experiences more immersive and accessible. There might be greater emphasis on creating value-driven, user-friendly platforms and possibly more integration with AI, contributing to more dynamic and interactive environments.
How Will Regulations Affect Web3?
As the Web3 landscape continues to evolve, so does the regulatory environment in which it exists. The past year has marked significant strides in regulatory frameworks. We’ll go over some of the main points that can impact the Web3 industry in 2024.
Across the globe, financial watchdogs are zeroing in on cryptocurrencies, setting the stage for a more regulated digital asset market. While regulating the industry should be good news for Web3 in the long run, the overly aggressive policies might significantly limit the potential for innovation in some of the Web3 niches.
We’ve seen that the fragmented nature of current crypto regulations underscores the need for a global consensus to foster a stable and reliable Web3 ecosystem. There might be a push to create a more globalized regulatory framework for Web3 in the future. The EU’s MiCA bill is a great example of how the regulatory landscape might be shaped in many other countries.
The integration of cryptocurrencies with conventional financial systems is blurring the lines, requiring novel regulatory approaches while Consumer Protection Takes Center Stage. With crypto’s volatility, protecting investors has become a priority, driving regulators to enforce stricter guidelines and transparency. This also means that adhering to Anti-Money Laundering and Know-your-customer standards in the decentralized world of crypto remains a complex yet vital endeavor.
If you’re interested in spending some more time to understand the regulatory environment of Web3, we’ve found this great detailed regulatory report provided by PwC.
Are CBDCs a Game Changer?
Yes, CBDCs have the potential to be a game changer for the Web3 industry. It isn’t clear how developments related to CBDCs will impact the Web3 industry as a whole.
On one hand,CBDCs can offer a government-backed, secure digital currency alternative, potentially enhancing financial inclusion and modernizing payment systems. However, their centralized nature contrasts with the decentralized ethos of cryptocurrencies.
The emergence of CBDCs could influence the crypto market and the entire Web3 by providing a stable digital currency option, prompting a reevaluation of digital assets’ role and regulatory approaches. Their impact on privacy, security, and existing financial structures is also a crucial consideration in their transformative potential.
What Trends Might 2024 Bring to Web3
Now that we’ve covered the most influential Web3 trends in 2023 and prior, we can explore the trends that are gaining significant traction in the industry.
A significant Web3 trend, RWA tokenization, refers to the conversion of tangible assets into digital tokens on the blockchain, such as buildings or artwork.
For example, a painting worth $1 million can be tokenized into 1,000 shares at $1,000 each, making it accessible to more investors. This trend democratizes investment, making previously unattainable assets accessible to a broader audience.
It enhances liquidity and transaction speed, with blockchain technology ensuring transparency and security.
Why RWA Tokenization Will Be a Big Web3 Trend?
To see the immense potential of RWA tokenization we need to understand the lengths financial institutions are going to in order to be prepared for this emerging market. It seems like more and more institutions are realizing that the future will be tokenized.
The tokenization of real estate, art, and commodities opens new investment opportunities, while in sectors like climate finance, it enables efficient funding and tracking of environmental projects.
Many amazing projects are realizing the opportunity of RWA tokenization, like the eCredits platform, which aims to provide an accessible entry point into tokenization, particularly for small and medium-sized businesses.
We’ll be posting an entire piece on how you or your company can benefit from tokenization of Real-World Assets, so be sure to stay up to date with our latest posts by following us on our social media.
Is DeSoc The Future of Social Networks?
This concept has gained significant attention in the last year. Fueled by blockchain technology, it aims to reshape how we digitally interact with one another, shifting power from centralized authorities to individuals and communities.
What is DeSoc?
Simply put, it’s a society where decision-making and power are distributed. It’s built on blockchain, ensuring transparency and security.
This approach is particularly significant in communication, where current social networks face issues like censorship and data control.
Poll source: Digital Information World
How can DeSoc Improve Social Networks?
DeSoc’s decentralized platforms offer a solution, allowing free and uncontrolled information flow, empowering users.
The four pillars of DeSoc – decentralized communication, law, production, and finance – collectively work towards a more equitable society.
Smart contracts and DAOs (Decentralized Autonomous Organizations) replace traditional legal systems, offering transparent and unbiased enforcement of agreements.
In production, blockchain facilitates sustainable and efficient practices, addressing current environmental concerns.
Decentralized finance (DeFi) is perhaps the most revolutionary aspect, providing inclusive financial services and reducing reliance on traditional banking systems.
This democratizes access to financial resources, a stark contrast to the current financial ecosystem, which often excludes marginalized communities.
One of the projects that aims to be a part of the DeSoc future is æternity’s SuperHero app. It allows users to send and receive tips in the form of AE tokens as a way to monetize content and support creators directly. The app operates without intermediaries, providing a peer-to-peer way to reward content on the internet, whether it’s a social media post, a blog article, or any other form of digital content.
However, the path to a fully decentralized society is not without challenges. Technical limitations, scalability issues, and the need for widespread adoption still stand as hurdles that challenge all DeSoc projects. Despite that, the potential of DeSoc to create a more transparent, fair, and autonomous society is immense.
As we navigate through 2024, the evolution of DeSoc will be a key trend to watch. It promises to address many flaws of our current systems, from social media censorship to financial exclusion, marking a significant shift towards a more empowered and equitable global society.
GameFi is The Newest Among Web3 Trends
We touched upon NFTs and the dwindling interest in them. That might be the case because more and more people are interested in the practical applications of NFTs offered by GameFi.
GameFi, short for “Gaming Finance,” is one of the emerging Web3 trends in the gaming industry that combines gaming with blockchain technology, especially decentralized finance (DeFi).
The current situation
In the traditional gaming world, AAA games have faced criticism for declining quality, increased costs, and persistent bugs. These issues are pushing players and developers towards alternatives like GameFi, which offer new models of engagement and monetization.
The potential lies in merging the current blockchain technology with the ever growing traditional gaming industry.
Blockchain can introduce new levels of ownership and economic models to gaming, such as true ownership of in-game assets and play-to-earn structures.
This integration could lead to more immersive and economically rewarding gaming experiences, potentially attracting a broader audience and creating new revenue streams for developers. The combination of blockchain’s secure, decentralized nature with gaming’s widespread appeal could revolutionize both industries.
The GameFi ecosystem comprises various applications, ranging from simple play-to-earn games to complex virtual economies. These games not only provide entertainment but also enable players to earn income through activities like battling, trading, and crafting in-game items.
Also, it’s worth keeping in mind that the gaming industry is projected to hit more than $300 billion dollars in revenue in 2026 and has been growing steadily for the last several decades with its roots tracking back to the 1970s.
Convergence Between Web3 & AI
We’ve seen significant advancements in the AI fields in 2023, yet it also faced a range of challenges. While the public’s understanding and excitement about AI grew, there were issues around privacy, ethics, and the limitations of the technology.
The need for public education about AI’s potential and limitations became more obvious. AI’s disruptive effects were felt in education, recruitment, and creative fields, raising concerns about its ethical use and the biases it might reflect from its training data.
Potential Web3 Solution
Once again, Web3 might provide a way for AI to advance even further in 2024.
Decentralized Infrastructure in Web3 and AI refers to the shift from centralized cloud computing to a distributed network of computing resources. This transformation is crucial for the advancement of Web3 and AI applications. Decentralized infrastructure allows for more efficient data processing, improved security, and reduced reliance on centralized entities.
The Decentralized Infrastructure Web3 Trends?
Akash Network exemplifies this shift by offering a decentralized marketplace for cloud computing resources essential for AI operations. It enables users to rent out idle computing power, challenging traditional cloud computing providers and supporting the growth of AI applications requiring high-performance computing.
Akash Network’s introduction of its GPU “AI Supercloud” in Q3 2023 addresses the surge in AI applications requiring unprecedented computing power, targeting underutilized GPU resources, including those from crypto miners, for its marketplace.
Dfinity’s Internet Computer Protocol (ICP) is another project in this space. It provides a decentralized architecture for hosting various AI applications, addressing data privacy and security concerns inherent in centralized systems.
This approach not only enhances the decentralization of AI services but also addresses concerns related to data privacy and security inherent in centralized systems. The partnership between Dfinity Foundation and SingularityNET, a platform for AI services, further indicates the potential of this technology in creating a more robust, efficient, and secure AI ecosystem in the Web3 environment.
These developments in Web3 and AI, including projects like Akash and Dfinity, highlight the growing synergy between decentralized technologies and artificial intelligence, shaping a new era of digital innovation.
Conclusion on Web3 Trends in 2024
As we venture into 2024, the Web3 landscape continues to evolve, driven by innovative technologies and shifting market dynamics. This year’s trends in decentralized finance, regulatory frameworks, and technological advancements, including AI integration, set the foundation for a transformative future.
While challenges remain, especially in security and adoption, the potential for growth is immense. The interplay between Web3 and emerging technologies will undoubtedly shape not just the digital world, but also impact various sectors globally, paving the way for a more interconnected and decentralized future.
We hope that this year brings you joy, innovation, and success. Let’s embrace the future with optimism and continue to shape the world of technology with our shared passion and creativity. Happy New Year from all of us at RZLT! 🌟🚀🎉