IOBC Capital's 10 Predictions for 2023: L2 Scaling, Ethereum Modularization, Appchain/RollApps...
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IOBC Capital's 10 Predictions for 2023: L2 Scaling, Ethereum Modularization, Appchain/RollApps...
At the beginning of 2023, the IOBC team made 10 predictions for 2023.
Navigating Web3 tides with focused insightsThe crypto industry spent most of 2022 in a bubble-deflating phase, with Terra's collapse, 3AC's bankruptcy, and FTX's implosion... the bear market chill lasted nearly the entire year. At the start of 2023, the IOBC team has put forward the following 10 predictions for 2023:
1. The Layer2 scaling sector will ignite in the secondary market as major ZK Rollups launch on mainnet
zkSync, StarkNet, and Scroll are all scheduled to launch their mainnets in Q1 and Q2 of 2023. The primary market narrative for crypto in 2023 could center around Layer2 and related Layer2 infrastructure projects.
2. Modular blockchain projects focused on Ethereum's data availability layer will emerge
After ETH2.0, the BeaconChain serves as Ethereum’s consensus and settlement layer, while the original Ethereum mainnet and Rollups function as execution layers. Blobs replace calldata in handling part of Layer2's data availability needs. This shift will give rise to leading projects dedicated specifically to Ethereum's data availability layer.
3. MEV will become a significant profit source for validators post-Ethereum's PoS transition, beyond block rewards
In Ethereum 1.0's PoW era, miners had real-world costs such as hardware and electricity, making mining an industry closely aligned with traditional business models. With Ethereum 2.0’s shift to PoS, mining is now done via staking ETH. As the Ethereum ecosystem grows and on-chain activity increases, MEV (Maximal Extractable Value) will become a key additional revenue stream for validators beyond block rewards.
Throughout 2023, the total MEV value captured through wallets and applications—by acquiring order flow, arbitraging, and extracting MEV—will exceed $10 million. As application-layer traffic and transaction volumes grow, along with the emergence of private transaction pools tailored for smart contract wallets, MEV searchers and MEV-focused projects will increasingly partner with consumer-facing apps to access user order books, enter private pools, capture potential MEV value, and share a portion of that value back with the app or project.
4. Unicorn-level "fat applications" will emerge among Appchains/RollApps
If dYdX achieves greater success after migrating to Cosmos as an Appchain, it may spark a broader trend toward Appchains and RollApps at the application layer.
5. The DAO space will see a new financing paradigm akin to ICOs or yield farming
The ICO model in 2017, DeFi’s liquidity mining in 2020, and GameFi’s play-to-earn in 2021 each triggered waves of fundraising. Today, Investing DAOs built on platforms like Syndicate are gaining momentum, and many projects are beginning to explore raising funds through these DAO structures. This could lead to a new blockchain-native fundraising model emerging within the DAO space.
6. A "wallet war" will emerge
In 2023, we’ll likely see the first smart contract wallet with over 500,000 daily active users or more than 2 million wallet addresses—or an MPC wallet processing 6–8 million signature requests per day. At the same time, total asset losses from hacks targeting MPC and smart contract wallets will exceed $10 million throughout the year.
As trust issues continue to plague centralized exchanges and CeFi platforms, and as dapps drive narratives to bring web2 users into crypto, wallets featuring social login/recovery, multi-chain EVM gas sponsorship, built-in DeFi yield or DEX functions (smart contract wallets), or MPC wallets widely adopted by B2B clients will become the next focal point for user adoption and traffic aggregation.
Alongside the rise of numerous wallet projects, code security and operational safety will become critical concerns, with more than one new wallet project suffering asset theft incidents.
7. The first crypto game with over 500,000 daily active users will emerge
2023 will witness the first crypto game achieving over 500,000 daily active users, maintaining stable token economics for 8–12 months post-token launch without experiencing a crash exceeding 90%.
In the space combining hardcore casual games (tower defense, card games, roguelikes, SLG, etc.) with crypto elements, multiple high-quality titles will enter public testing in Q2 and Q3. Among them, we expect at least one standout game that successfully balances gameplay quality, economic design, and tokenomics.
8. Vertical data analytics + AI applications or components will emerge
With the explosion of application-layer trends like GameFi and SocialFi, on-chain data is becoming richer and more specialized. This will give rise to professional data analytics platforms, modules, or tools tailored to specific sectors. These vertical analytics solutions will enable industry participants to build detailed user profiles, analyze behavior patterns, and extend insights across the broader crypto market.
9. X-to-earn models will evolve into new paradigms
In 2022, X-to-earn was widely criticized as a death spiral mechanism. However, it did help cultivate user habits and engagement to some extent. Leveraging this accumulated user base, such models may undergo transformations similar to those seen in internet product evolution. These shifts are worth watching in 2023, particularly StepN and Axie’s new approaches and their derivative models.
10. The DeFi derivatives sector will experience a "double squeeze" moment
Wallets carry credit, and credit has value. As on-chain application data becomes richer, analyzing user behavior and deriving meaningful insights becomes increasingly feasible. In 2023, we may see the emergence of new credit scoring models that gain standardization within certain scopes, eventually permeating across DeFi derivatives and other crypto applications—potentially triggering a "Davis Double Play" moment for the DeFi derivatives sector.
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