2023 – the year for Web3
As we usher in 2023, the crypto market would be looking to turn the tide in search for greener pastures as it aims to recover from its losses in 2022.
An offshoot of the FTX fallout is the emerging decentralized identity trend in light of the increasing emphasis on self-custody and crypto regulation. Besides that, the worsening climate changes are set to propel the rise of regenerative finance (ReFi) whereas generative artificial intelligence (AI) would become more human-like through adaptive AI.
In 2023, there would likely be a shift in focus from anonymity and pseudonymity to reputation and identity in line with the increased regulatory transparency and enhanced customer protection in the decentralized finance (DeFi) domain. The rise in the use of decentralized identifiers (DIDs) would be facilitated by the introduction of MetaMask Snaps which offer a range of customization options including the enabling of authentication, privacy, and consent in ways that keep users in control.
An alternative is Chainlink’s DECO which is privacy-preserving plug-and-play option that combines the usability of legacy systems with the security of blockchain. It allows oracles to attest to the validity of information in trusted databases/systems without exposing it to the public or even the oracle itself using a cryptographic technique known as Zero Knowledge Proofs (ZKP).
MetaMask Snaps (Source: MetaMask)
Following the launching by the World Economic Forum (WEF) of the Crypto Sustainability Coalition in September 2022, ReFi is set to give global environmental conservation efforts to tackle climate change a boost in 2023. Tasked with spotlighting real life use cases for Web3 technologies, the Coalition would be harnessing the principles of regenerative economy under the ReFi framework to create economically viable systems that can help restore and preserve the physical resources essential for planetary well-being. Among the notable ReFi use cases and projects are:
Digital Carbon Offsets
Regen Network helps landowners generate on-chain digital carbon offsets through its sovereign, proof-of-stake blockchain. The ecosystem is supported by REGEN, a staking token which utility encompasses ecological data and climate markets. Similarly KlimaDAO has established a carbon offset tokenization scheme which helps reduce market fragmentation and accelerate the delivery of climate finance to sustainability projects globally.
Renewable Energy Credits (REC)
An early player in the peer-to-peer (P2P) decentralized renewable energy trading market, PowerLedger has built a blockchain for decentralised and distributed energy markets that is is both faster and less energy intensive than the existing proof-of-work blockchains, as it utilises Proof-of-History and Proof-of-Stake (PoS) consensus mechanisms. Similarly, Reneum is building the world’s first green marketplace which uses blockchain to fund renewable energy by verifying every clean megawatt-hour produced and trace the journey of every single dollar spent.
8 Principles of Regenerative Economy (Source: Medium/Letty Prados)
Global technological and research firm Gartner has identified adaptive AI as one of the strategic technology trends to look out for in 2023. In simple terms, adaptive AI is a technology which allows for model behaviour change post-deployment. It uses real-time feedback to continuously retrain models and learn within runtime and development environments. This enables the models to quickly adapt to the changing real-world circumstances based on new data and adjusted goals. A recent use case example is OpenAI’s ChatGPT which utlizes a language model that is optimized for dialogue by using Reinforcement Learning with Human Feedback (RLHF) – a method that uses human demonstrations to guide the model toward desired behaviour.
ChatGPT (Source: OpenAI)
Whilst the jury is still out as to whether crypto would be able to bounce back in 2023, what is certain is that the year ahead would be an exciting one for Web3 enthusiasts given the trends in store.