Hottest Trends In The Crypto Realm: From P2E To The Metaverse

Ever since Satoshi Nakamoto presented Bitcoin to the world back in 2009, the crypto ecosystem has grown non-stop as more and more brilliant developers combine their efforts to make the most out of one of the most revolutionary technologies brought forward since the dawn of the internet – the blockchain.

 Even though the Bitcoin network was initially conceived as a decentralized and trustless peer-to-peer (P2P) payment system, the underlying technology that powers it has been applied to different types of businesses and industries to make decentralization a more mainstream thing.

 In this article, we explore the hottest trends in the crypto ecosystem. These practical applications for the blockchain go from virtual realms to play-to-earn (P2E) schemes and they may disrupt how some multi-billion dollar industries currently operate.

Understanding some basic concepts about blockchain-based apps

 Applications that are powered by the blockchain typically function as layer-two (L2) protocols that rely on so-called “infrastructure blockchains”. One of the most popular and widely used networks for developing L2 apps is Ethereum.

 The Ethereum network allows developers to create smart contracts, which are pieces of code designed to execute a set of actions once certain parameters have been fulfilled.

 Blockchain-minted smart contracts are “trustless”, meaning that no intermediary is needed to guarantee that the actions will be executed as expected.

 Therefore, blockchain-based apps are considered safe as the code that powers their functioning can be easily audited to verify that they will deliver what they are promising. In the crypto ecosystem, these apps are also known as decentralized applications or dApps.

• Decentralized finance (DeFi)

Decentralized finance, also known as DeFi, is a growing segment of the crypto world that uses decentralization to remove the need for an intermediary to execute day-to-day financial transactions.

The easiest way to illustrate how this would work in practice is by explaining how decentralized lending and borrowing would work. Traditionally, banks have to act as intermediaries between savers and borrowers. Those who save money typically receive interest payments in compensation for “risking” their capital while the bank charges a higher interest rate from the borrower and keeps the difference.

By relying on smart contracts minted on a blockchain such as Ethereum, a decentralized application can eliminate the need for an intermediary by coding a program that regulates the relationship between individual lenders and borrowers.

The program would automatically execute all the necessary transactions such as deducting and crediting interest payments and liquidating the loan if the value of the collateral pledged by the borrower declines below a certain threshold.

 The DeFi space is quite ample and it has the potential to create blockchain-powered versions of stock market apps, wealth management solutions, P2P loan platforms, and other similar activities that currently require the participation of an intermediary to function properly.

• The metaverse

 The metaverse is a virtual realm in which individuals can interact with each other and participate in different kinds of experiences from going to a bar to having a meeting with some co-workers or potential clients.

 Many corporations have been working tirelessly to develop the go-to metaverse platform and a few blockchain-based projects have also been launched including one named Decentraland.

 A decentralized metaverse is one where users own parcels of land where digital properties can be built for users to enjoy. They can charge people for accessing their premises or even lease the space to a third party who develops these potentially profitable experiences for them.

 The project’s native token – MANA, in the case of Decentraland – is the currency used to pay for everything in this universe and creators can also design and mint non-fungible tokens (NFTs), which are digital assets that can be exchanged and used in this virtual realm.

• Play to earn (P2E)

 Play-to-earn platforms are an innovative approach to gaming where users are compensated for leveling up, interacting, completing tasks, and bringing new players, among other things.

 Traditionally, games have a native currency that is worthless in the real world. However, P2E blockchain-powered ecosystems changed that as the tokens needed to pay for things within the game have a transparent market where they can be bought and sold instantly and that creates the possibility of profiting from playing the game.

 Rewards are typically earned for completing certain tasks within the game and the tokens obtained can be sold to users who want to buy assets and items in the game. Therefore, this is a market with true monetary value and the fact that these digital assets can be easily converted into other cryptocurrencies or even into fiat money makes P2E platforms highly appealing to gamers.

Bottom line

Blockchain technology has a lot of positive things to offer, and the world is just starting to realize its potential. Some of these trends are in the earliest stage of their development and that means that investors could profit significantly if they have the patience to wait until more and more people start to engage with and rely on these decentralized applications on a daily basis.