First my top 10 things that happened last year in crypto:

• The merge went off without a hitch. Pandas are a go, world is greener and graphics cards are cheaper.

• Centralised exchanges and bank-like entities ran off with other people’s money because they could. (If something can happen it will happen at some point.)

• An algorithmic stable coin lost its peg. Algorithmic stable coins are still an unsolved problem.

• 2021 we started having L2s. 2022 was the first year of bridges and they were messy. Lots of cheap multisig bridges appeared and predictably got hacked. Better bridges are being worked on (E.g. snowfork).

• A smart contract was sanctioned.

• Much crypto was sent to Ukraine very quickly after it was obvious that russia was invading.

• Tether announced that all its USDT was now backed purely by US Treasuries (a good move but took them years to realise that this is what they should have been doing all along. Maybe it’s only the relatively higher interest rates that treasuries are giving currently that enabled them to switch to this?)

• Twitter, Facebook, Instagram, Reddit all have integrations with NFTs.

• Nothing radical happened on the metaverse front this year. I still think metaverse art galleries (E.g. https://www.voxels.com/play?coords=S@432E,112N ) work pretty well. Other things need people and getting the right number of people is tricky.

• L2 Transaction costs got even cheaper.

• Polkadot launched it’s first parachains over the year. They then started building their own ecosystems and dapps on top of them. Kusama is still leading the way with more parachains and more developed building on top of those parachains. I guess people like living on the edge…

Here’s the top 10 things I am looking forward to in the year:

• zkEVMs will be live. Developers will realise that they can’t simply port optimised solidity contracts over to them as the gas optimisations are all in different places (Some easy things are expensive in zkEVMs).

• Someone in finance will twig towards the end of the year that the ethereum merge was a good thing and that ethereum as an inflation hedge (‘http://ultrasound.money’) is long term sustainable.

• Unbreakable Bridges. The young polkadot ecosystem that was spawned last year will continue to interweave and make connections between each others services, but this year rock solid bridges will finally arrive powered by light clients. (Will we see a consortium of banks creating their own parachain? Not yet, I suspect that will happen in 2024 - they probably are still fixated on r3 and private blockchains.)

• The dutch government will finally release the author of the tornado cash smart contract with no charges (they need evidence of a criminal offense to charge someone in a court of law and it’s pretty clear as months have gone by with no charges that they don’t have any evidence of his involvement in a crime). Law suits in the US by coincenter will be ongoing through the year - I doubt they will be quick.

• The great unlock of ethereum at the end of Q1 should happen where people can finally sell their staked eth as well as be able to stake more. I don’t think this will be that much of an event (with the possible exception of a flash crash), most people that staked eth did it because they believed in the returns that post merge are juiced further.

• In this constrained market I think we’ll see a lot more on-chain collatoralisation of off-chain assets. It’s not unbreakable finance but it’s no worse than the current financial system (if properly regulated).

• The SEC after chasing Kim Kardashian for promoting EMAX and missing FTX is going to have to go back to its roots and focus on systemic vulnerabilities in CeFI companies. Will we see them allow a physical bitcoin ETF this year? Probably not - they’ll allow the consumers to be fleeced for another year by the traders every time the futures roll.

• What of the ethereum roadmap: The idea that some subset of state can be shared between shards for zkrollups is a very intriguing idea. It will be interesting to see if they can achieve this without creating additional attack vectors. In almost every way ethereum is a long way behind polkaot’s sharding tech which has been in the wild for over a year now. I have long thought that ethereum L2 bridges are basic value bridges and that they will realise they should be able to do remote smart contract calls (like parachains can). Unfortunately each eth L2 is very different to each other so it’s unclear how they might achieve this. Maybe they will adapt cosmos’s interoperability standard?

• Rust is going to continue to grow as being the best language for coding cryptography and blockchain at the base and tools level. This will continue to annoy some of the rust community no end. The UK will have it’s first rust conference (finally!): https://www.rustnationuk.com/ . I think rustlang will push forward with async/await improvements now that GATs have landed.

• And lastly and by no means least, I’m looking forward to the people of the world continuing to donate to Ukraine and for russia to complete its withdrawal from Ukraine over the year. Last year it was clear that if you’re going to be in a war zone then at least knowing how to do crypto transactions can be very helpful in getting you out of a tight spot - think reporters / media. The idea of documenting/fundraising the war through NFTs was inspired: https://metahistory.gallery/collection/warline . A Bayeux tapestry of our time. There’s only so much that blockchains can do but it’s a big force for integrity and against corruption. Slava Ukraini.

And finally a review of last years predictions

We’ve started seeing ‘standard’ things start to appear on parachains but no black swans yet.

The eth merge did happen but markets haven’t priced that in yet.

“More people will understand that web3 means unstoppable apps. Other apps will as usual stop working when AWS has outages :-)”

People found out more that CeFi doesn’t have unstoppable apps and outages due to ‘RanOffWithMoneyException’ happened more than AWS outages.

“Governments and law enforcement will take the Al Capone route of trying to jail devs working on privacy coins on anything that will stick, trying to slow the inevitable. (Like Fluffy Pony.)”

Well that was inevitable. I did think they would have some evidence before locking people up though…

“L1 Ethereum will be a no-go zone by the end of the year, suitable for whales and rollups only. 2022 will be the gradual migration from Eth L1 to L2s.”

It’s happening but taking longer, more transactions are now happening on L2s than L1s. People are slow to embrace change.

“Hopfully one of the climate change protocols starts to gain traction or maybe a web3 social media?”

Nope. Not yet.

“The metaverse (we want) won’t I suspect arrive this year; but hopefully the next gen VR hardware will arrive this year that will allow people to be more immersed in VR. (Side note: I loved Somnium’s 360 degree picture bubbles as a metaverse try-before-you-buy metaverse link)”

Didn’t arrive. The quest headsets are getting better, and playstaion’s are coming soon TM.

“Zero Knowledge research and engineering will continue with breakthroughs and optimised techniques. Further attempts will be done to try and crack zkDeFi.”

I think Aztech could be said to have achieved this. They gain the cost reductions from L2 but interact with L1 smart contracts yet keep privacy. The best example yet of zkDeFi!

Looking forward to 2023, it’s going to be a corker. Let’s see if crypto speedruns this bear market…