TL;DR
As 2022 draws to a close, we wave goodbye to what will be remembered as a particularly challenging period for many players in the crypto and blockchain space. Crypto winter set in, but the turning of the seasons in trading markets did not diminish the adoption and development of blockchain technology. There is no doubt that the industry has made advances since 2021, despite some shrill voices that would prefer to focus on short-term drama.
The crypto market entered 2022 off the back of an all time high and fought to hold its level until Terra fell apart in May, dragging crypto prices down in the process. Confidence remained shaky as the fallout took down hedge fund Three Arrows Capital and crypto lender Celsius Network.
Then in November, Coindesk reported a liquidity crisis at FTX, triggering a sell-off that culminated in FTX filing for bankruptcy amid reports of lax financial controls, dubious loans, and personal use of customer deposits by FTX execs. This time, the contagion took down crypto lenders BlockFi and Genesis Global Capital.
In Context
It is true that there has been a pullback from the all-time-highs in a 12-month window. That said, Chainalysis has nonetheless observed in its 2022 Crypto Adoption Index blog post, it is “important to note that global adoption remains well above its pre-bull market 2019 levels.”
TVL in DeFi fell from a high of nearly $190 billion to $39 billion, with the collapse of Terra accounting for a single-event drop of about $75 billion. However, much of this loss of value may be attributable to the fall in crypto prices, so perhaps DeFi may still have its day in the sun again when the market recovers.
NFT trading activities have also waned, with trading volumes falling back to 2021 levels. The highs of April and May 2022 had set a high bar, and journalists were quick to pounce on the stark contrast between those heady weeks and the comparatively muted trading towards the end of the year. However, it may be argued that there remains strong use cases and as-yet unexplored applications relating to NFT. Should these materialise, NFT adoption could potentially still continue to advance.
Bright Spots
There were some rays of sunshine even through the tough parts of the year. Ethereum finally moved from its Proof-of-Work validation mechanism to Proof-of-Stake during the event known as “The Merge”. The transition went smoothly, ushering in a new era of more environmentally-friendly transactions and hope for lower network fees.
Even though NFT trading activities have waxed and waned, it appears that NFT adoption continues to move forward, especially in the social space. Twitter allowed users to upload NFTs as profile pictures. Facebook and Instagram permitted users to post and share NFTs. Several million Reddit users signed up for NFT wallets and minted an NFT avatar as the social platform’s NFT collections shot up to be among the most popular collections to date.
On the regulatory front, the European Union passed the Markets in Crypto Assets Regulation bill, providing clarity for crypto regulation in the EU. Even though the law only will come into force in 2024, it provides more guidance to centralized exchanges on custody requirements, the marketing of assets, and how risk is assessed and communicated to users. Regulation that protects the interests of investors will result in a net benefit for the industry.
India started trials for their retail central bank digital currency (CBDC) in 4 cities, with the pilot program extending to 9 more cities in the future. This could potentially improve the lives of more than 1 billion people, many of whom are unbanked. That brings the total number of countries that have launched a CBDC up to 11, while over 100 are in some stage of rolling out a CBDC.
Most importantly, teams are still building beneath all the market noise. More layer 1 protocols were launched to create better Web3 infrastructures. New promising technologies like zero-knowledge (zk) proofs are making progress. BNB Chain launched its zero-knowledge scaling technology zkBNB testnet this year, and a number of other projects’ zk-EVMs are planned to be launched next year. These will significantly improve scalability and interoperability across blockchains. Great technological advances often emerge during downturns, and it won’t be a surprise if blockchain technology continues to advance regardless of the market sentiment.
Take Shelter With Binance Academy This Crypto Winter
What better time than wintertime to brush up on your blockchain knowledge? We’ve launched the first of our free crypto education courses starting from November, and so far 200,000 people have invested into their blockchain knowledge and personal growth by completing a combined 8.3 years of blockchain course content (at an average of 22 minutes per user).
By January, we will have more than 120 minutes of self-directed video education available for everyone to learn the basics of blockchain, Web3, and trading. Anyone with a Binance account can also claim a free NFT certificate when they complete the whole series of 6 beginner track courses.
We’ve played host to 26 million unique visitors to our website in 2022, and our videos on YouTube and Binance Live have garnered 25 million views. We’ve also expanded our knowledge base to nearly 1000 articles and glossary entries. We gave away $7.3 million worth of rewards to over 6.5 million visitors through our Learn and Earn campaigns, where they were able to learn more about what makes different blockchain projects tick.
Binance Academy built partnerships around the world, and brought crypto and web3 education to more than 75 universities in more than 20 countries worldwide. Over 5,500 students and guests attended these educational events, and we’ve received nearly a thousand requests from interested individuals in over 35+ countries (and growing!), who wish to be student ambassadors.
Our Student Ambassador program was launched in the 4th quarter of 2022, investing in the next generation of blockchain industry leaders. Our selected student ambassadors will help organise and contribute to crypto education and literacy activities on their campuses, foster interactions and knowledge sharing opportunities amongst the blockchain communities, and have access to Binance Academy networks - and maybe even internship opportunities!
We have also deepened our cooperation at the national level with countries like Kazakhstan, where we will provide educational materials and support to develop and execute basic educational programs on blockchain and compliance for Universities across the nation.
What’s in Store for 2023?
We’re looking forward to teaching more people more about blockchain next year. Our partnerships will continue to expand as we reach out to more schools, governments, and institutions to deliver in-person training, hackathons, and workshops.
We’ve got partnerships in the works with some of the world’s leading education providers to make certified blockchain education available for those who want to pursue careers in the blockchain industry.
For those of us who just want to keep exploring this fascinating new technology, we’ll also be extending our offering of free online Courses in 2023 by aiming to deliver more than 20 hours of intermediate and advanced level video education through our Courses product. We want to make sure that everyone is able to access free education that will enable them to benefit from a decentralized future powered by blockchain technology.
Here’s to 2023 - hang in there!
Conclusions
Looking back at 2022, it’s clear that the blockchain ecosystem has experienced significant growth and development. Despite facing its fair share of setbacks, the crypto community has persisted and will eventually emerge stronger and more experienced. It may also be said that every market cycle clears out market players who have unsustainable business models, and perhaps the crypto industry is no different.
So while it’s true that the crypto market has been volatile of late, the continued proliferation of new crypto protocols and increasing mainstream adoption of existing ones, could perhaps be reasons for us to remain optimistic about the prospects of this industry. In any case, it’s always important to engage in continuous life-long learning about the world and technologies around us (market conditions regardless!), so keep on learning about this rapidly evolving blockchain industry! We look forward eagerly to the coming years, and can't wait to see what the next chapter holds for this industry.