The Block Research 2023 Digital Asset Outlook Report

Larry Cermak unpacks The Block Research's 2023 Digital Asset Outlook Report. It's a podcast.

You can read the actual The Block Research's 2023 Digital Asset Outlook Report pdf, without having to subscribe.

Here are a few non-obvious insights from the Executive Summary.

The digital asset derivatives market primarily declined over the past year. Last-twelve-months, Bitcoin futures volume decreased by 52%, more than Ethereum futures’ 28% decline. For the first time, Ethereum futures exceeded Bitcoin futures volume in August 2022 with a 7% margin, before contracting in the subsequent months.

Even so, important that Bitcoin derivatives volume is larger than spot - the tail does wag the dog now.

Emergence of application-focused chains. Although EVM continued to dominate among smart contract platforms, there is a high demand in abstracting away blockchain complexities, as reflected in Cosmos ecosystem, Avalanche subnets, and Polkadots’s parachains.

Value locked in cross-chain bridges has fallen significantly in 2022. The metric peaked at over $58 billion in January, declining by ~90% to $6 billion as of end November. The decline was primarily because the value of assets held in bridges fell in prices, and numerous bridge exploits happened throughout 2022, including the $600 million Ronin hack, the $323 million Portal exploit, and the $100 million Horizon bridge attack.

mmm... I have warned about the dangers of current bridges; looks like I'm not the only one.

Proliferation of X-to-earn. As Web3 gaming evolves from Axie Infinity’s play-to-earn model, developers create novel gameplay mechanics in an effort to attract diverse audiences. Various “X-to-earn” spawned, such as move-to-earn, sleep-to-earn, and learn-to-earn.

Enjoy, but be aware of games masking terrible tokenomics.

You can read the rest.