2023 has proven to be a challenging year for cryptocurrency values and the market as a whole. However, it has also witnessed the emergence of numerous narratives and drivers for numerous cryptocurrency projects and ecosystems, with some witnessing more organic growth and others experiencing abrupt and explosive rises in total value locked (TVL).
It is a fact that resources, including money and R&D, are being allocated to innovative features and technologies that have the potential to revolutionise decentralised finance (DeFi). These technologies will be discussed in this article together with some of the most popular cryptocurrency tales and protocols.
Assets in the Real World – RWA
As the name implies, real-world assets (RWA) are actual and intangible resources that can be tokenized using blockchain technology. Stated differently, the RWA protocols enable DeFi to access previously unrealized revenue and resource potential by bringing off-chain assets onto the chain.
RWA protocols come in a variety of forms, including those used by on-chain credit providers, debt markets, loans, commodities, and real estate.
In 2023, RWAs outperformed the average DeFi APY, which is currently yielding approximately 3%. Furthermore, according to DefiLlama, RWAs make up about 6.3% of DeFi's total TVL. In contrast to other tales, which have experienced dramatic ups and downs, RWA protocols and service providers have expanded naturally.
Both benefits and drawbacks of RWAs are numerous. Let's begin with the benefits:
RWAs have the potential to open up untapped returns in the DeFi ecosystem by serving as a new source of liquidity.
widespread use in institutions
Reduced entrance barriers in a number of areas, most notably real estate Faster operations and exchange of goods without middlemen
The Drawbacks and Difficulties of RWAs
Regulation will have a big impact on RWA success. RWAs require enormous amounts of liquidity in order to access large markets, like credit, real estate, or lending, and the most obvious way to provide that liquidity is through large institutions.
SocialFi: POWERED IMPACT
One of the most popular cryptocurrency movements right now is social networking, with protocols like friend.tech and Stars Arena dominating the market.
When content creators monetise their social media following and engagement, influence matters in SocialFi (or SoFi). Cryptocurrencies are used to produce revenue, while an NFT serves as the digital identity. This might be viewed as a new iteration of Web3, combining NFTs, social media, cryptocurrency, and content production.
Users can benefit greatly from SocialFi in many ways, such as increased privacy, new revenue streams, improved user-creator interaction, and less centralised parties controlling data and censoring content.
But soon after friend.tech became Base's flagship product, SocialFi took off. Shortly after, additional applications and forks appeared in various ecosystems, such as AVAX's Stars Arena, which was successfully hacked for $3 million. The breach served as a reminder to cryptocurrency users that novel, experimental technology can be hazardous, and that rapid, exponential growth might draw in a large number of undesirable actors.
DErivatives of Liquid Steaking (LSD)
Perhaps the most anticipated story of 2023 has been liquid staking derivatives (LSD), particularly during the first quarter. Tokenized forms of deposit contracts or staking tokens are known as LSDs. Because of this, customers can make use of their tokenized ETH or other tokens without needing to release the real money.
As of this writing, there is about $33.8 billion in total value locked up in liquid staking, and Lido is the market leader with $21 billion in TVL, leading the way.
Approximately 20% of the total value locked in DeFi is now represented by LSD. The Shanghai Update, which switched Ethereum to a proof-of-stake consensus algorithm and saw a sizable portion of ETH locked up until the Spella upgrade, is credited with the ecosystem's success. projects and expose stakeholders to possible loss as a result of market conditions.
The answer? Tokenize these staked assets (e.g., Coinbase's Wrapped Staked ETH) and use them for other DeFi initiatives.
The way these protocols convert staked assets into more adaptable and dynamic return instruments may be the primary advantage of LSD. To put it simply, consumers get a tokenized version of their assets, such as a receipt, which opens up more yield possibilities in DeFi.
TELEGRAM MARKETING STOCKS
Because they provide an automated trading system on decentralised exchanges, Telegram crypto trading robots have grown in popularity in 2023, enabling users to trade and execute trades more quickly and efficiently.
In a decentralised exchange (DEX), users can purchase and sell tokens by copying and pasting the token address into the bot chat, eliminating the requirement for a computer to connect to their wallet. As a result, trading happens far more quickly than it would on the original DEX website. But trading robots don't end there. They also have features like liquidity sniping, take profit orders, MEV and anti-rug security measures, stop loss, and much more.
At the moment, the most well-liked trading robots are Banana Gun, Maestro, and Unibot. Compared to Uniswap's website, Unibot alone can complete transactions six times faster.
There are almost 124,000 unique users in this trading bot ecosystem, and they have made approximately $740 million in trades. It should be mentioned that user investments are at risk and that no trading robot can ensure profitable trading.
END NOTES
The tales included here centre on the most talked-about subjects, fads, and conventions of the year, but a few other stories are also emerging and picking up steam on their own.
Chinese tokens: When Hong Kong opened up the market to regular investors this year, the value of tokens associated to China, such NEO, BIT from BitDAO, VET from VeChain, and so on, skyrocketed.
Decentralised stablecoins: Unlike single central bodies like Tether or Circle, these stablecoins are managed by a decentralised organisation. As a result, a centralised party cannot manipulate the coin's supply or falsely assert that it has the resources to support a portion of the token that it does not truly possess. T.