15 November 2022 • 10 min read
Ah, the power of hindsight. We often see with perfect vision when reflecting on the past, which is why so many articles and blog posts predicting the next hottest crypto coin or project can fall flat months or even weeks after they’ve been posted or published.
One of the problems with such lists is that they become arbitrary, unreflective exercises (“everyone else is doing it, so let’s put out our own list”). However, the world of crypto has its own logic and rhythms, which is one of the reasons why all of us should be keeping a close eye out for new projects throughout the year.
As we wind down an admittedly brutal 2022, it’s a good opportunity to take stock of some of the more promising crypto projects of the year, many of which relate to Ethereum. Given the fact that the crypto space changes in the blink of an eye, you should bear in mind that the overall strengths or weaknesses of some of these projects will likely change, while others will be right on point.
In the following article, we’ll look at some of the more important, prominent, or news-worthy crypto projects of 2022. There will be some familiar faces, especially for those of you who have read our article on the best cryptocurrencies to invest in this year (hint: Ethereum is mentioned more than once), as well as a few surprises, even for seasoned crypto veterans.
No surprises here. Anyone even remotely connected to the crypto space is aware of The Merge, Ethereum’s major network upgrade from a proof-of-work mechanism to a proof-of-stake one, or “the most significant upgrade in the history of Ethereum” as the Ethereum Foundation described it. And yet despite its importance, the price of Ethereum dropped 15% in the days following the historic upgrade.
So why all the fuss? According to Ethereum,
“The Merge was the joining of the original execution layer of Ethereum (the Mainnet that has existed since genesis) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the network to be secured using staked ETH. It was a truly exciting step in realizing the Ethereum vision—more scalability, security, and sustainability.”
Crypto has a bad reputation because it is seen as being bad for the environment, despite the fact that there are a plethora of energy efficient crypto projects. In Ethereum’s case, the transition is projected to result in a 99.9% reduction in the amount of energy used to power its blockchain, which translates into a drop from 112 terawatt hours/year to 0.04 terawatt hours/year. Another change? Adios, miners, who have been replaced by validators, or those who stake 32 ETH or more, where they can’t be bought or sold.
The next major Ethereum upgrade, referred to as “the Shanghai upgrade,” is expected to take place in 2023. Stay tuned.
If you’re looking for a powerful screener that allows you to scan the largest range of coins, blockchains, and DEXes, look no further than DEX Screener. Not only is it completely free to use, but there is also no sign up, no KYC, and no need to sign into a wallet.
Just what is a crypto screener, you may be asking? As its name suggests, a crypto scanner is a tool that scans publicly available data on cryptocurrencies. By adding a DEX screener into the mix, you'll have all of that crypto-related data across decentralized exchanges at your fingertips, giving you access to powerful analytics all in one convenient location. Although the project started in late 2021, we’re pulling it into the current year, since activity and market awareness of a new project at the end of the year is limited at best.
As you can see from their interface, DEX Screener is for people who absolutely love data. It includes prices for over 1,000 coins and tokens and covers the largest selection of DEXs of any scanner. Analyze cryptos and chains according to the usual metrics, such as price, volume, market capitalization, liquidity, transactions, price changes (5M, 1H, 6H, 24H)—all with customizable ranking and filtering as well as free access to technical analysis indicators and charts. Users can even benefit from DeFi-related data, including pool data for token pairs; create a watchlist; set up alerts; spot DEX market trends; devise multicharts for price comparisons; and follow new pairs.
With all of this free data, the ball is in your court!
Continuing in the spirit of decentralization, next up we have Sudoswap, an Ethereum-based decentralized NFT marketplace. If you use OpenSea for all of your NFT-related needs, then you’ll be surprised to learn that Sudoswap works quite differently. With OpenSea, trading is accomplished via an order book model that is off-chain, while Sudoswap uses liquidity pools for the buying and selling of NFTs.
During the summer, Sudoswap announced that they had been busy building an entirely new NFT marketplace powered by their SudoAMM, which, according to them, will change the way NFT traders buy and sell. Features include the following:
Sudoswap has three types of liquidity pools: buy-only pools, sell-only pools, and buy-and-sell pools. Now each of these pools can have one of two bonding curves, either a linear curve, in which prices move up or down in a linear manner, or an exponential curve, in which prices go up or down by a certain percentage as they occur.
In order to actually buy or sell NFTs, you need to navigate to their marketplace website and connect your wallet. Users only pay gas for approvals and swaps, and no transaction is needed to create an order. You can trade with any combination of ERC20, 721, and 1155, and assets remain in your wallet until both parties agree to the swap.
For some at the forefront of developments in Web3, the goal is soul. First proposed by Ethereum visionary Vitalik Buterin along with Puja Ohlhaver and E. Glen Weyl, so-called “Soulbound Tokens” (SBT) essentially refer to non-transferable digital tokens, which, if their vision is realized, will contain an individual’s social identity in a decentralized society.
In fact, the three co-authored a May 2022 whitepaper, entitled “Decentralized Society: Finding Web3’s Soul,” in which they described a decentralized society (DeSoc) where self-governing users can make use of Soulbound tokens (SBTs) as personal credentials in various aspects of their lives.
As Buterin, Ohlhaver, and Weyl explain in the abstract to their whitepaper,
“Web3 today centers around expressing transferable, financialized assets, rather than encoding social relationships of trust. Yet many core economic activities—such as uncollateralized lending and building personal brands—are built on persistent, non-transferable relationships. In this paper, we illustrate how non-transferable “soulbound” tokens (SBTs) representing the commitments, credentials, and affiliations of “Souls” can encode the trust networks of the real economy to establish provenance and reputation. More importantly, SBTs enable other applications of increasing ambition, such as community wallet recovery, sybil-resistant governance, mechanisms for decentralization, and novel markets with decomposable, shared rights. We call this richer, pluralistic ecosystem “Decentralized Society” (DeSoc)—a co-determined sociality, where Souls and communities come together bottom-up, as emergent properties of each other to co-create plural network goods and intelligences, at a range of scales.”
The tokens themselves are not designed to be bought or sold and research into the idea is ongoing, but possible use cases include medical records, digital ID cards or memberships, and certifying an individual’s job history or educational credentials, among other things.
From its very inception, the crypto space has had a heady dose of idealism and it will be interesting to see if SBTs manage to gain traction in 2023 and beyond.
Ethereum was synonymous with expensive gas fees and low transaction speeds, which is why in early 2022 Offchain Labs developed Arbitrum, a layer-two (L2) rollup technology offering high speed in order to address scalability.
In their Gentle Introduction to Arbitrum, the dev team behind the project describe it in the following way,
“Arbitrum is a technology suite designed to scale Ethereum. You can use Arbitrum chains to do all things you do on Ethereum — use Web3 apps, deploy smart contracts, etc., but your transactions will be cheaper and faster. Our flagship product — Arbitrum Rollup — is an Optimistic rollup protocol that inherits Ethereum-level security.”
Among its touted advantages are low cost, a good ecosystem, powerful dev tools, and high EVM (Ethereum virtual machine) compatibility. Arbitrum is considered an “optimistic rollup,” meaning that it makes it possible for smart contracts from Ethereum to scale by sending messages between smart contracts and the Arbitrum second chain layer, with transaction processing being completed in layer 2 (L2) and stored on the main chain, thereby increasing the efficiency and speed of the process itself.
Arbitrum launched its Beta version at the end of May 2021 and just over a year later, in August 2022, the Arbitrum Nitro update went live.
However, with Ethereuem’s aforementioned Merge, Arbitrum has lost some of its raison d'être, but it nevertheless remains an important crypto project for 2022.
There are two types of rollups, optimistic rollups (such as the above-mentioned Arbitrum) and zero-knowledge rollups or Zk rollups. According to many in the space, one of the most exciting answers to the question of Ethereum’s scalability is what is known as a zero-knowledge Ethereum virtual machine (zkEVM).
What’s a zkEVM and why is it important? Well, we’re glad you asked. Let’s get the answer straight from the proverbial horse’s mouth:
“zkEVM is a virtual machine that executes smart contracts in a way that is compatible with zero-knowledge-proof computation. It is the key to building an EVM-compatible ZK Rollup while preserving the battle-tested code and knowledge gained after years of working with Solidity. Our zk-EVM keeps EVM semantics, but is also ZK-friendly and takes on traditional CPU architectures.”
Another piece of the puzzle is zkSynch 2.0, which is an EVM-compatible ZK rollup being built by Matter Labs and powered by zkEVM (version 1.0 is already being used for payments). The benefits include reduced transfer costs by up to 50x.
Given the complexity of zkEVM and ZkSynch, it’s beyond the scope of this summary to provide in-depth explanations, but curious readers who are interested in the fine print should definitely check out zkSynch’s own overview along with zkEVM’s FAQs.
The Across Protocol is a cross-chain bridging solution that supports fast, secure, and cost-efficient transfers. More specifically, it’s been described as “a new bridging method that combines an optimistic oracle, bonded relayers, and single-sided liquidity pools to provide decentralized instant transactions from Rollup chains to Ethereum Mainnet”.
The team behind Across describe its many benefits, particularly when it comes to speed, efficiency, and cost savings. For example, there is almost instantaneous bridging and availability of assets for use on mainnet and L2s and users can typically receive funds in two minutes or less.
In response to Ethereum’s prohibitively high gas fees, optimistic roll-up solutions aimed to provide some relief, but a lengthy delay (approximately seven days) meant that transfers from from L2 to L1 were inefficient. The innovation provided by Across means that transfers across chains could now happen at speeds heretofore impossible.
There are three types of fees associated with it:
In sum, Across is a combination of bridge methods using a bonded relayer, a single-side pool, and UMA's Optimistic Oracle, enabling near-instant, decentralized transfers of assets from Layer 2 to Ethereum at low cost.
If we had to pick a word that encapsulates the nature of new crypto projects in 2022, then it would be Ethereum. From the Merge to scaling solutions and a few other things in-between, 2022 was very much a year for all things Ethereum, even if it wasn’t reflected in Ethereum’s price.
As the year draws to a close, we’re unlikely to see the same kind of bull market frenzy that the space experienced last year around this time. Nevertheless, countless new crypto projects for 2023 hold a great deal of promise, as the crypto space continues to develop and mature.