Token Takeaways ✍️
✨ Token trends are difficult to spot, but they can have a huge impact on the market once they emerge.
✨ DeFi, Layer 2, AI, and cross-chain communication are examples of key trends in the space today.
✨ The Next Big Trends Collection highlights several niches that could become central themes in the future of tokenization.
The token ecosystem has always been quick to adapt to new innovation. However, the biggest trends can be difficult to predict. Few foresaw the decentralised finance boom of 2020 even though the space had been around for years. The NFT explosion of 2021 also took many people by surprise. But while spotting adoption waves can be difficult, some of today’s top trends could define the future of the token universe. For those looking to find out where the space may head in the future, we curated a Collection of tokens dedicated to The Next Big Trends. Learn more below.
Please note: Investing in cryptoassets is risky. Due to the volatile nature of the cryptocurrency market, investors run the risk of losing their funds when they make an investment. Returns from cryptoasset investing are not guaranteed, therefore users should always be aware of the risks.
How token trends have emerged 🌱
The crypto space has historically followed boom and bust market cycles. These cycles tend to attract new adopters during the frenzy and then flush out users as prices decline.
Due to the cyclical nature of the market, crypto’s major trends have followed a similar pattern. The world’s top cryptocurrency, Bitcoin, has remained the biggest force in the adoption trend. Bitcoin has previously experienced rallies roughly every four years following its “halving” events (when the amount of Bitcoin paid to miners gets cut by 50%), and each boom has been bigger than the last.
Beyond Bitcoin, crypto has seen several other key trends. Ethereum led the 2017 market rally, inspiring countless projects to launch their own tokens through Initial Coin Offering sales. The ICO boom started as projects discovered that they could raise funds in ETH; most of them died out as the market declined in 2018.
Ethereum has since become the focal point of two of crypto’s most important trends: DeFi and NFTs. In 2020, Ethereum saw a boom in decentralised finance activity when projects opted to use a “yield farming” model to distribute tokens to users and bootstrap adoption. The emergence of yield farming created a period of market mania that saw DeFi take the spotlight in crypto for almost a year.
The NFT boom 💥
After DeFi, NFTs boomed on Ethereum in 2021. There were several major factors that contributed to the trend. They included a market-wide crypto rally, Beeple’s historic $69 million NFT sale at Christie’s, and a wave of celebrities and musicians entering the space. While Ethereum became the main hub for NFTs, other networks like Solana benefited from growing interest in the technology.
Other trends such as the “alternative Layer 1” boom—where Ethereum competitors like Avalanche and Solana grew in popularity—have had a big impact on crypto in recent years.
While few anticipated these trends, they didn’t arise out of nowhere. There were signs that DeFi and NFTs would grow because many projects were experimenting with the technology early on. In the past, it has only taken a few small sparks to ignite a new trend.
Although it’s difficult to tell how the market will react to new innovations, there are several trends that are likely to impact the token ecosystem in the future. Some of them may take longer than others to arrive, but they could all change the way we interact with the token ecosystem.
How the future may look 🔮
The token ecosystem has already seen a few big trends in recent years, but the space is yet to reach its full potential.
While decentralised finance boomed in 2020, it only attracted a niche group of power users. But DeFi could be world-changing. While DeFi has already caught the attention of crypto natives, it’s currently in a slump. That could change if more institutions and major players from traditional finance take an interest in the technology.
Ethereum has established itself as the core of the token ecosystem, but it faces one big challenge: scaling. Ethereum has proven popular, but it suffers from congestion and high transaction fees when demand to use the network soars. As Ethereum isn’t going anywhere, the emergence of Layer 2 and other scaling solutions focused on onboarding new users will help define the token ecosystem over the next few years.
The emergence of Ethereum competitors ⛓️
While Ethereum has a stronghold over the token ecosystem, the 2021 boom proved that it has many viable competitors. Projects like Solana and Avalanche saw growth, attracting vibrant communities with their own DeFi and NFT ecosystems. As crypto evolves, “alternative Layer 1” networks could continue to establish communities and grab market share from Ethereum.
Along with the evolution of “alternative Layer 1” networks, cross-chain innovations look set to grow. Today, there are many different blockchains serving similar purposes. However, it is difficult to connect them. If someone has an NFT on Solana, for example, they can’t easily move it over to Ethereum. As more cross-chain projects aim to solve this hurdle, cross-chain communication should become a key trend in the token ecosystem.
While NFTs like Bored Ape Yacht Club went mainstream in 2021, the hype showed how the space could change with the emergence of crypto gaming, Web3, and the Metaverse. So far, NFTs have mostly taken the form of digital art and “avatar” images. But in the future, they could be ubiquitous as in-game assets in blockchain games. Crypto gaming has so far emerged as a clear use case for the Metaverse. But the Metaverse will also dramatically change the way we interact with blockchains and the Internet.
The token.com Collection 💫
The Next Big Trends Collection points to some of the major technological innovations that could shape the future of the token ecosystem.
In a nod to DeFi, the Collection includes two of the space’s leading projects—Aave and Uniswap.
The Collection also highlights Optimism and StarkNet, two Layer 2 rollup projects focused on helping Ethereum onboard the next 1 billion token users.
The Next Big Trends also predicts a potential rise for the Solana ecosystem. It features the high-speed Layer 1 project’s native token.
The Collection also features several promising cross-chain interoperability projects: Stargate, Cosmos, and Polkadot. We’ve also included the top decentralised exchange on Cosmos, Osmosis.
Crypto gaming and the Metaverse will dramatically change the token ecosystem. The Next Big Trends points to how the future of the space may look, adding leading Metaverse projects The Sandbox, Decentraland, ApeCoin, and Star Atlas.
The Next Big Trends also looks into where crypto token trading could head in the future, adding the fast-growing decentralised exchange GMX alongside the promising zero-fee trading platform WOO.
The Collection also includes Fetch and Ocean Protocol, two AI-focused projects leveraging blockchain to create an interconnected digital world. Interest in AI has recently surged thanks to products like ChatGPT. The space looks set to grow exponentially over the coming years.
Finally, the Collection includes several projects that could become disruptive forces in Web3. They include the Web3 music streaming platform Audius and the sports social token pioneer, Chiliz.
Discover more 👀
Spotting new trends emerging in crypto can be difficult due to the vast number of projects and the fast pace at which the space moves. However, with tools, data, and an observation of how the ecosystem is operating today, it’s possible to identify where things may head in the future. The Next Big Trends aims to celebrate the leading projects behind crypto’s most important innovations. Head to token.com to learn more about The Next Big Trends and discover the projects that we think could define them for yourself now.
Learn more about token.com here