2021 was a crazy year to say the least. Let’s pause for a moment to wrap things up and see what the future holds by taking a sneak peek into next year’s top design fads. With Doge coin Mania taking over the world by storm to Elon musk crashing bitcoin 2021 was really a wild year for crypto.
If you want a quick summary of please checkout our youtube video:
Bitcoin’s All Time High
Bitcoin suffering 2 major corrections this year and closed in at all time high of $69,000. Ether exploded in value with over 500% increase stayed comfortably above $4000.
Crypto Adoption
In the US, the SEC allowed for the first Bitcoin ETFs to be listed. The mayor of Miami announced support for crypto in the city.
The City of Miami believes in #Bitcoin and I’m working day and night to turn Miami into a hub for crypto innovation.
Proud to say Miami is the first municipal government to host Satoshi’s White Paper on government site. @balajis @tyler @cameron @APompliano pic.twitter.com/DBOni23ynY
— Mayor Francis Suarez (@FrancisSuarez)
Microstrategy, the Nasdaq-listed business intelligence company, continued to buy additional bitcoin during the year and now has holdings worth about $6-billion. The move was widely viewed as a green light from corporate US for crypto.
Fintech and traditional payment providers began to adopt blockchain and crypto solutions, with giants PayPal, Venmo, Mastercard and even Twitter allowing customers to transact in bitcoin. In South Africa, Capitec and Discovery Bank formed partnerships to list crypto as a new product offering.
Coinbase announced its IPO – making it the first exchange to get listed in the history of the cryptocurrency industry.
Elon Musk and Crypto
Tesla unveiled a $1.5 billion Bitcoin purchase. Tesla also began allowing BTC as a method of payment.
Later, Elon musk announced that Tesla will stop accepting bitcoin because of its high energy usage which momentarily crashed bitcoin price
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk)
Elon also pushed Dogecoin throughout this year calling it the people’s crypto.
Dogecoin is the people’s crypto
— Elon Musk (@elonmusk)
Musk praised DOGE while replying to a tweet about a survey stating that nearly 33 percent of cryptocurrency owners in the US own the crypto asset.
Age of Memecoins
Dogecoin mania went mainstream with price reaching upto $0.68 which lead to the explosion of memecoins thanks push from Elon Musk Dogecoin also became one of the most googled keyword globally this year.
Dogecoin, launched in 2013 as a bitcoin spinoff, soared over 12,000% to an all-time high in May before slumping almost 80% by mid-December. Shiba inu, which references the same breed of Japanese canine as dogecoin, briefly muscled its way into the 10 largest digital currencies.
The memecoin phenomenon was linked to the “Wall Street Bets” movement, where retail traders coordinated online to pile into stocks such as GameStop Corp, squeezing hedge funds’ short positions.
Many of the traders – often stuck at home with spare cash during coronavirus lockdowns – turned to crypto, even as regulators voiced warnings about volatility. ockdowns – turned to crypto, even as regulators voiced warnings about volatility.
NFT Goes Mainstream
In January, we started the year with a trending topic that would last the entire year: non-fungible tokens (NFTs).
NFTs are digital tokens that represent something unique and linked to the blockchain. NFTs have value as they are able to prove the authenticity of digital or physical items. Most importantly, the NFT cannot be altered or replicated.
The most expensive NFT in 2021 was Everydays By Beeple, which was sold for almost 40,000 Ether (equivalent to almost US$69 million).
Gaming with NFTs has also gained traction in 2021, and the best example is Axie Infinity.
Axie Infinity is an NFT-based game inspired by Pokemon and Tamagotchi. You can play-to-earn by trading, battling or even breeding new adorable characters called Axies. Each Axie is unique and represented by NFTs.
Axie Infinity, an NFT-based game that took the world by storm in 2021 / Image Credit: Axie Infinity
To play the game, players need to assemble a team of three unique Axies to take part in battles. These Axies can be bought on the Axie Marketplace with Ethereum (ETH).
As of October 2021, there were over two million monthly active users using the game, which led to an impressive 953 per cent monthly volume growth. Furthermore, the price of the AXS token skyrocketed in 2021, from US$6 at the end of June, to an all-time high of US$150 in November 2021.
The game is so profitable that some players are able to make more than an average worker’s wage in their country by playing the game.
NFTs are mainly used in the art and gaming scene. Recently, NFT characters are also making rounds on the internet. Have you seen these pixelated cartoon characters as profile pictures on social media?
American rapper Jay-Z used a Crypto Punk image as his Twitter profile photo / Image Credit: Twitter
These “cartoons” are actually part of the limited edition NFTs that are released. The most popular series are the Bored Ape Yacht Club, Crypto Punks and Crypto Kitties.
For example, there are only 10,000 Bored Ape NFTs in circulation and no more of such NFTs are made on the blockchain. One of the rare Bored Ape Yacht Club NFT was even sold for US$3.4 million.
Usually, these NFTs are hosted on Ethereum networks. This means that you have to buy an Ethereum token (ETH) – which can be bought from a platform like Luno – to purchase NFTs on marketplaces like Opensea or Mintable.
Fortune 500 companies like Visa, Adidas and Coca-cola increasingly began using and investing in NFTs.
Enter Metaverse
The popularity of NFTs also fueled the rise of Metaverse – a new frontier for online interaction blending the physical and digital world seamlessly.
Virtual Gaming Crypto projects like Decnetraland and the Sandbox saw explosive growth with a plot of virtual land selling for $4.3 million
Adidas collaborated with Bored Ape Yacht Club for their “Into The Metaverse” project, allowing fans to buy limited edition Adidas merchandise as an NFT. Nike has also bought a company that makes virtual shoes and sneakers.
Nike bought RTFKT, a company that makes virtual sneakers / Image Credit: RTFKT
This might seem bizarre – afterall, why would we even need virtual shoes? Like a pair of Nike shoes in the real world, the limited edition shoes are a status symbol and a way to stand out from the crowd.
Facebook also announced its foray into the Metaverse by changing the name of the parent company to meta
The Growth of DeFi
The market cap of DeFi gained more than 300% this year closing in at almost $100B
Some of the most talked about names are those involved in decentralized exchanges (Uniswap, 0x); interest rate protocols (Aave); lending protocols (MakerDAO); are creating synthetic assets like tokenized Tesla shares (Synthetix, UMA); automated investing (Yearn Finance), and numerous investment Decentralized Autonomous Organizations (that’s what DAO stands for), just to name a few.
Uniswap, Aave, Curve, MakerDAO, and Compound dominated the of DeFi market this year, with the five protocols accounting for 29.4% of TVL
DeFi protocols like Compound and balancer suffered significant financial loss due to hacks.
A total of $1.5 billion were hacked this year across all protocols.
Sidechains Exploding
Ethereum’s high gas fees saw several EVM-compatible chains emerge.
Polygon led the way, with its PoS sidechain gaining TVL of more than $10B after attracting top DeFi protocols including Aave, SushiSwap, and Curve.
However, the Polygon network lost market share later to Solana, Terra, and Avalanche all boasted TVL of more than $10B.
AVAX reached an all-time high in mid-November just after announcing a partnership deal with Deloitte to build more efficient disaster-relief platforms using the Avalanche blockchain.
Another alternative blockchain, Terra, saw its LUNA token rise 28% on the month, followed by Solana’s SOL, which rose about 5%. Notably, the gains came during a month when bitcoin, the largest cryptocurrency, slid 4.5%. Ethereum’s native cryptocurrency, ether (ETH), rose 7%.
Polkadot recently launched its first parachain auctions, which saw almost $3.5 billion collected by 10 hopefuls. The first coveted Polkadot parachain slot was won by decentralized finance (DeFi) platform Acala, which edged out Moonbeam for the first slot. Parachains are the individual layer 1 blockchains that run in parallel on Polkadot.
Airdrops
SuperRare (RARE)
In August, influential NFT marketplace SuperRare dropped 15% of its $RARE token supply to early users of the platform. Multiple users reportedly received seven-figure airdrops.
DYDX
In one of DeFi’s largest distributions, decentralized derivatives protocol DYDX airdropped over $1B in $DYDX tokens to early users. Users in the U.S. were excluded to avoid regulatory scrutiny.
At the lowest tier, simply depositing $100 on the platform and making a single trade was rewarded with 310 $DYDX, worth $3700 at the time.
Larger traders reaped huge rewards, with 9529 $DYDX tokens ($105K) awarded to users whose trading volume exceeded $1M.
Ethereum Name Service (ENS)
Christmas came early for owners of .eth domains with the $ENS airdrop announcement on Nov. 2.
Eligible users were able to claim tokens based on the age of their .eth address and time remaining until expiry.
According to this Dune query, the average claim was roughly 150 tokens, with the maximum airdrop being around 1100 $ENS.
$ENS traded as high as $85 in the days following the launch, making the airdrop worth $12K-$93K at the peak.
That’s a fantastic return on an initial investment of less than $100.
Adventure Gold (AGLD)
Loot NFTs were launched in September by Vine creator Dom Hoffman at the peak of the NFT bull market. Minted for free (plus gas), traders couldn’t get enough of the text-based NFTs and the concept was quickly copied, with new variants launching almost daily.
Adventure Gold (AGLD) was a derivative token airdropped to holders of Loot NFTs, with each NFT eligible to claim 10K tokens.
$AGLD has seen extremely volatile price action, but early sellers were able to cash out anywhere from $20K-$70K per Loot NFT held.
Ribbon Finance (RBN)
Ribbon Finance is a DeFi protocol that offers automated strategies in which OTM options are written to generate yield.
It airdropped 30M RBN tokens to early users in May, and those tokens were unlocked in October.
According to the distribution, over 100 early Discord members received six-figure airdrops.
Users who deposited $100 worth of assets in the project’s Option Vaults received 12K $RBN tokens. In addition, 10M $RBN tokens were distributed pro-rata based on deposit sizes.
$RBN traded around $4 at launch, making the smallest airdrop worth more than $50K. Many Ribbon users were eligible for sig-figure airdrops.
Though generous, this airdrop was marred by controversy as it was discovered that crypto VC fund Divergence Ventures claimed $2.5M worth of $RBN tokens using multiple wallets to interact with the platform. The proceeds were later returned to the Ribbon treasury.
Web3
Web3 is the concept of a new version of the internet based on public blockchains like Ethereum or Binance Smart Chain. The term was initially created in 2014 by Gavin Wood, co-founder of Ethereum and founder of Polkadot. However, it hasn’t been until this year that the concept has started to gain traction, especially with the endorsement of large investment firms like Andreessen Horowitz around October 2021.
Web3 aims to use decentralization as a base for new developments for the internet. But how is this different from the metaverse? Well, the metaverse wants to create a 3D, connected world. Web3 concentrates more on how we’re using the internet in its current form to control our identity, personal information, and interactions. Websites and applications will also use big data in meaningful ways to enhance the online experience.
NFTs, DAOs (decentralized autonomous organizations), and DeFi all look to become essential parts of how we use the internet, similar to how emails, PayPal, and 2FA (two-factor authentication) were key to Web 1.0 and Web 2.0.
Conclusion
The crypto markets in 2021 set a new standard for innovation, mainstream adoption and wealth creation. Next year is all set for big changes such Ethereum’s Eth2 chain-merge and polkadot’s parachain ecosystem and of course more metaverse!
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