A16z Crypto, the cryptocurrency asset division of major venture capital firm a16z, has released a report on the latest situation in the cryptocurrency industry. The report highlights that the speculative fervor in the crypto market has subsided, and people are beginning to use Web3 consistently.
This is due to the increasing number of ways to use blockchain and Web3 apps, from DeFi to games, as well as the emergence of products equipped with a mechanism that can be used easily without having to download a wallet.
One of the key points highlighted in the report is the record high number of active addresses conducting transactions on the blockchain, with 15 million sending addresses in March, more than double the number from two years ago when cryptocurrency prices were soaring. The report attributes this to the improvement of various tools and the development of scaling solutions to solve scalability issues and lower fees. DeFi and NFTs are also on the rise again, with activity in these areas picking up again after a period of lull.
The report also notes that scaling solutions are being actively developed. An Ethereum L2 project is emerging that will lead to lower transaction fees. In 2022, L2 accounted for only 1.5% of fees paid across the Ethereum blockchain, but today that percentage has reached 7%, indicating an increase in the number of applications built on L2. Ethereum’s move from “proof of work” to “proof of stake” consensus mechanism with “The Merge” upgrade is also noted as a momentous event, as it will greatly reduce the environmental impact of Ethereum.
The report also highlights sustained developments across the cryptocurrency industry, with close to 30,000 monthly active developers contributing to cryptocurrency repositories on GitHub. This number has increased by 60% since 2020, indicating the growing interest and investment in the industry.
It is interesting to note that for the past two months, trading volume on decentralized exchange Uniswap has outstripped that of Coinbase, the largest U.S. centralized exchange, indicating the growing popularity and adoption of decentralized finance. The report predicts that expectations for DeFi innovation will continue to rise.
Overall, the report paints a positive picture of the cryptocurrency industry, with increased adoption and usage, sustained developments, and promising innovations in scaling solutions and environmental sustainability. It is clear that cryptocurrency is no longer just a speculative asset but is increasingly being used in various fields such as loans, remittances, art, various NFT collections, and on-chain game items for NFT. As the industry continues to mature and evolve, it will be interesting to see what other developments and innovations lie ahead.
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