This 12 months has confirmed to be an acceleration of a macro pattern that began in 2021: it’s much less about whether or not you’re in crypto and extra about which sub-sector your cash is in. That means nice returns will be earned by observing which sector investor sentiments are shifting in direction of and discovering a solution to “index” into the broader concept. This isn’t any completely different than conventional finance markets, and is an appropriate strategy for many who are usually not all-in and following each single growth available in the market.
As such, the thesis offered beneath offers a macro view that can assist analysts decide the place to spend their time within the subsequent six months. So with out additional ado, Secure Digital Markets (SDM) expects these 4 sectors to thrive in 2022:
1. Layer 1s
Each of those has already generated sufficient of the preliminary curiosity for the thesis to be partially validated. However, market capitalizations and adoption figures present there’s nonetheless loads of room for development.
The emergence of a multi-chain ecosystem has change into a foregone conclusion at this level. Everyone is aware of it’s going to occur—it’s only a matter of which chains will dominate which use instances. In the approaching months, it will likely be essential to have a look at what use instances should be crammed, the place the builders are and the place the expansion in pockets addresses is.
Four surprising winners of 2021 have been SOL, AVAX, LUNA and MATIC. In a number of methods, this “theme” is equally about not being ETH as it’s concerning the strengths of the choice chain in query. Users are in search of ETH options proper now.
Many customers are in search of a spot the place they will carry out DeFi transactions with out paying over $100 per transaction on the ETH chain. This is what initially pushed more cash to AVAX and SOL. MATIC matches into an analogous narrative and has onboarded more cash than every other Layer 2 resolution for ETH. It additionally features in some ways like a leveraged place in ETH.
On the LUNA entrance, they’ve performed effectively by having a built-in stablecoin. These sorts of utilities make a protocol way more engaging and present a maturity that brings potential converts from different ecosystems.
Some fascinating options SDM is monitoring are Fantom, Atom, Near and Harmony. Each of those is battling to select up complete worth locked (TVL) and developer motion. The manner SDM analyzes these is by day by day energetic customers, charges, and TVL. In the top, we’re in search of the battle-tested networks.
Strong communities will assist in the short- to mid-term, however in search of the dApps being constructed on every of those chains and determining the place the precise customers are going is the true indicator of long-term success.