2023 in Review: 5 Key Developments That Changed Crypto and DeFi

Reflecting on 2023, the crypto market saw a year of major developments and significant regulatory shifts. From innovative strides in the crypto and DeFi spaces to digital asset frameworks, the year was an important one for the industry.

2023 also saw the G20’s adoption of a unified regulatory framework for crypto assets. EU’s groundbreaking Markets in Crypto-Assets (MiCA) regulation was also given the green light in 2023. These changes, along with the heightened anticipation for the first Bitcoin spot ETF, contributed to a newfound legitimacy for cryptocurrencies globally.

As we look back at 2023, here is our pick of five defining moments for the crypto and DeFi market:

SocialFi

In 2023, the launch of Friend.tech on Coinbase’s Ethereum Layer 2 chain, BASE, sparked interest in SocialFi. Its August launch blended social media with cryptocurrency. This trend led to increased discussions about the potential of SocialFi for revolutionizing social media platforms. It enhanced user engagement and opened new financial avenues for influencers, thus integrating cryptocurrency more deeply.

AI Revolution

The concept gained momentum in 2023 following Chat GPT’s launch in late 2022. 2023 saw discussions and an expanded role for artificial intelligence and machine learning across various industries. From healthcare to entertainment, AI’s deeper integration opened up new business opportunities. This makes 2023 a year that will be known for the advancement of AI technologies.

Tokenization

In December, Bitfinex Securities Ltd., a platform specializing in security token trading, achieved a milestone with its first tokenized bond issuance, raising $5.2 million USDT. The year 2023 saw a notable shift as traditional banks and institutions embraced tokenization. This trend of tokenizing real-world assets in the crypto market will play a role in narrowing the divide between conventional financial assets and the digital asset space.

Bitcoin Revolution

The Bitcoin blockchain experienced a revolution in 2023, starting with the introduction of Ordinals in January and the launch of BRC-20 tokens in March. These innovations, leveraging the Ordinals protocol, brought Ethereum-like ERC-20 functionalities to Bitcoin. The emergence of these capabilities attracted other chains to follow suit, igniting new investor interest.

Ethereum Evolution

Ethereum witnessed significant evolution in 2023 following its September 2022 Merge. A major development was the ETH Shapella network upgrade in April, rejuvenating interest in Ethereum’s ecosystem. This upgrade marked a key milestone by enabling the withdrawal of staked ether for the first time, further enhancing Ethereum’s appeal in the DeFi ecosystem.