In December 2022, Messari released its highly anticipated annual report, "Crypto Theses for 2023," authored by its co-founder and CEO, Ryan Selkis. The comprehensive 168-page document delves into the latest developments across various crypto sectors, including Bitcoin, stablecoins, Layer 1 blockchains, rollups, DeFi, NFTs, and DAOs. Selkis emphasizes that 2023 will be a year to demonstrate the resilience and technological progress of the cryptocurrency industry, shifting focus away from the bad actors of 2022 and toward the innovators driving the space forward.
This article distills 33 pivotal predictions and outlooks from Messari's extensive analysis, providing a clear roadmap for what to expect in the coming year and beyond.
Bitcoin and Stablecoins
- Bitcoin's Monetary Role: Bitcoin's function as a currency will continue to be debated, underscoring the critical importance of building robust stablecoin infrastructure in parallel. Stablecoins act as a bridge to the future of money.
- Bitcoin vs. The Euro: Bitcoin is predicted to surpass the Euro in significance, posing a substantial challenge for European policymakers in Brussels.
- Sustainable Mining: The Bitcoin mining industry must prioritize becoming cleaner and more sustainable.
- Institutional Demand: In a rising interest rate environment, corporate treasurers may be hesitant to add Bitcoin to their balance sheets. The next major wave of demand is more likely to originate from sovereign governments rather than large corporations.
- Privacy Focus: The public nature of most blockchains will create significant opportunities for privacy-focused networks and Layer 2 solutions like Aztec and Polygon's Nightfall. Zcash and Monero are highlighted as top contenders in the upcoming "privacy wars."
- Stablecoins as a US Export: Stablecoins should be treated as a major US export. The country's leadership in tech and finance, coupled with over 50 million crypto-owning Americans, means the US doesn't need to do more to win—it just needs to avoid losing its lead.
- Over-Collateralized Stablecoins: MakerDAO's DAI has proven its resilience, acting like a "cockroach" in the best sense—surviving the brutal bear market without any substantive issues or de-pegging events, even as its supply halved from its peak.
- Algorithmic Stablecoins: The model of charging seigniorage to the system, as Terra did, remains viable but must be pursued conservatively. It requires "insurance" contracts backed by fees and a focus on slow, sustainable growth rather than aggressive expansion. The crypto space still needs a successful, inflation-resistant algorithmic stablecoin.
- The Threat of CBDCs: A central bank digital currency (CBDC) is presented as a worse outcome than the collapse of a $60 billion algorithmic stablecoin. A CBDC is likened to the FAA trying to pilot planes and build jet engines instead of simply defining safe, competitive airspace rules.
Layer 1 Blockchains and Rollups
- Ethereum's Roadmap: Ethereum will focus on cleaning up technical debt, solidifying the scaling and security of rollups, and ensuring the EVM remains resistant to censorship. The Merge has made liquid staking derivatives like Lido's stETH ubiquitous, but censorship remains a primary post-Merge concern.
- The L1 War: The Layer 1 blockchain war will mirror the historical browser wars. It's likely that only the EVM and one or two other players will emerge as long-term winners, making it impossible for dozens of L1s to succeed simultaneously.
- ZK-Rollup Proliferation: If their scalability advantages become more pronounced, ZK-Rollups could see massive growth due to their potential for offering users significantly cheaper transaction fees.
- Value Accumulation Questions: The economic value accrual for rollups and modular blockchains is still uncertain. It's unclear how much value will flow to the consensus and data availability layers compared to the execution and settlement layers. New tools will be needed to monitor fragmented liquidity across rollups.
- Newcomers like Aptos and Sui: While new L1s like Aptos and Sui have strong teams and backing, their ultimate value proposition in a crypto winter remains doubtful.
- Ethereum's Dominance: Sentiment on Ethereum's lead has shifted from unassailable in late 2020, to uncertain a year ago, and is now back to bullish on its continued dominance.
Decentralized Finance (DeFi)
- DEX Competition: Uniswap V3 is an unrivaled AMM protocol, but competition will arise around dynamic fees, oracle performance, and reliability—not through tokenomics or marginal price advantages.
- Liquid Staking: Lido is projected to become the highest-fee-generating dApp in crypto in 2023. Rocket Pool is expected to grow its market share by 5-10x.
- DAO-Focused Investing: Crypto asset managers will shift their investment focus toward DAOs. The ease of creating rules-based, on-chain asset management protocols will facilitate this growth.
- Green Crypto Protocols: Protocols like Nori, Flowcarbon, KlimaDAO, and Toucan, which bring transparency and liquidity to the carbon markets, are positioned to make a significant impact by overhauling a fragmented industry.
- KYC in DeFi: Most DeFi users and transaction volume will likely require KYC verification in the coming years.
- Security Audit Boom: The $3 billion in on-chain exploits in 2022 will ensure that security audit firms continue to be a sound investment in 2023.
Non-Fungible Tokens (NFTs)
- Belief in NFT Potential: The long-term potential of NFTs remains strong and is still believed in.
- Yuga Labs' ApeCoin: The ApeCoin community, while perplexing to some, was one of the few things that grew significantly during the difficult market of 2022.
- NFTs on Twitter: Expect to see increased NFT experimentation on Elon Musk's Twitter.
- Digital Fashion: NFT-based fashion, whether purely digital or phygital (physical/digital hybrid), will open new opportunities for brands in 2023, as demonstrated by Gucci selling digital versions of physical bags for $800 more than the real thing on Roblox.
- GameFi Outlook: GameFi is currently the most over-hyped sector in crypto, and a bearish outlook is advised.
- AR/VR Future: While still bullish on the long-term future of AR/VR, the report advises against making bets in the short term after a difficult year.
- OpenSea's Dominance: OpenSea is on a path to become a $100 billion company, a position solidified by the failure of competitors like Coinbase NFT and the disappearance of FTX NFT.
- NFT Design Space & Regulation: The design space for NFTs is far greater than for fungible tokens. Regulatory attention will likely focus on DeFi, privacy products, and DAOs before it seriously turns to NFTs. NFTs will become a universal standard for packaging financial assets, much like they are used for JPEGs today.
Decentralized Autonomous Organizations (DAOs)
- Crypto Infrastructure Growth: Crypto infrastructure will see exponential growth in regions with government crackdowns on dissent and free speech, presenting a massive opportunity to serve gray market customers. This infrastructure will become the backbone of a free and open internet.
- DAO Impact: Although it won't happen overnight, DAOs are expected to change countless aspects of the economy, politics, and society over the next few years.
- DAO Treasury Management: Currently, DAO governance structures are unsustainable. Many DAOs hold large amounts of their own native tokens and lack diversified treasuries, having missed the opportunity to diversify during the bull market. 2023 will be a brutal year for crypto startups, and the situation will be even worse for decentralized communities.
- Media DAOs: 2023 will be the best time to create a media DAO. A sum of $10 million could be sufficient to fund a crypto media powerhouse comprised of 50 top-tier researchers and journalists.
Frequently Asked Questions
What is the main focus of Messari's 2023 report?
The report focuses on highlighting the resilience and innovation within the crypto industry after a challenging year. It provides predictions and analysis across all major sectors, including Bitcoin, DeFi, NFTs, and DAOs, aiming to shift attention back to the builders and foundational technology.
Why are stablecoins considered so important?
Stablecoins are described as a "bridge to the future" because they provide a crucial link between traditional fiat currencies and the digital asset economy. They offer price stability and are essential for everyday transactions, trading, and DeFi applications, making them a cornerstone of the crypto infrastructure.
What is the outlook for Ethereum after The Merge?
Ethereum is expected to solidify its dominance by focusing on post-Merge upgrades. These include scaling with rollups, cleaning up technical debt, and ensuring censorship resistance. The success of liquid staking derivatives is also a key trend to watch. 👉 Explore more strategies for staking
Are DAOs a good investment in 2023?
The report suggests that crypto asset managers will increasingly look toward DAOs. However, it also issues a strong warning that many DAOs have unsustainable governance and poor treasury management, making them particularly vulnerable in the current market. Thorough due diligence is essential.
How will regulation impact NFTs?
The regulatory environment for NFTs is expected to remain unclear in the near term. Regulators are likely to prioritize DeFi, privacy tools, and DAOs before turning significant attention to the NFT sector. This provides a window for continued innovation and the development of new use cases beyond digital art.
What is the best way to get started with crypto investments?
The most important step is to educate yourself on the different asset classes and technologies, from Bitcoin and stablecoins to DeFi and NFTs. Start small, use reputable platforms, and never invest more than you are willing to lose. 👉 View real-time tools for market analysis