Dispatch #120: 2022, Part 2 aka The Rock to Build Upon

In this patch of your weekly Dispatch:

• The resurgence of crypto-first principles
• The year of the Merge
• Regulatory allies

2022: The Good

A Return to Fundamentals & a Year to Remember

In part one of this year’s Dispatch recap, we discussed the things that we would most like to forget from this year (but should not). Indeed, it would be easy to get lost in pessimism but our guess if you are still here reading, you are not the type to sit and wallow.

And this gets us to what we believe the story of 2022 will ultimately be: a return to the foundations and fundamentals that responsible players have been adhering to since day one.

This year has rocked crypto, but not because its underlying principles were found to be false. Instead, this year's plight has been the stories of hucksters, cons, charlatans, and fakers who were always more interested in their own gain than building a fairer financial system.

Their downfall has prompted a resurgence in principles-first thinking and a revisiting of essential lessons like overcollateralization, prudent risk management, and “don’t trust, verify.” What is more, we are now, more than ever, looking beyond hyped-up venture-fueled crypto to see how it is impacting communities around the world in ways large and small.

To the people who remain in the space – thinking, reading, learning, debating, and building – we salute you, and we are here to serve you. Without further ado, the best of 2022, in no particular order.

The Inspiration In…

Ethereum

This year, Ethereum undertook the most ambitious transformation in the history of a crypto project. In September, Ethereum flawlessly and without incident transitioned from Proof of Work to Proof of Stake in the Merge. Even the most optimistic of commentators would have hardly predicted it to go so smoothly, and the community is still trying to grokk all the implications. In 2023, ETH will begin the year as a near-deflationary PoS currency, and that’s something to celebrate.

(currency-data: eth button: Buy)

The Inspiration In…

Bitcoin

Bitcoin is – as it always does in times of crypto strife – seeing a resurgence of interest. Many of those fundamentals we mentioned come directly from the genesis of BTC itself. As many in the industry shift their focus back to Bitcoin, they are discovering just how many communities around the world are using it to improve their lives right now. With Lightning, Taro, and a raft of new startups, Bitcoin is poised for one of its best years ever in 2023.

(currency-data: btc button: Buy)

The Inspiration In…

NFTs

NFTs were one of the new kids on the block during the last bull run, so it is fair to ask how they are doing in their first down cycle. On the one hand, NFT prices are down like everything else after OpenSea hit its record $5B in monthly trading volume back in January. But dramatically, NFT communities have not abandoned the field as the prices have shrunk. There remains incredible energy, excitement, and long term interest in NFTs and the broader metaverse. The President of Activision/Blizzard even just left that company to become CEO of the Bored Ape Yacht Club. The NFT and NFT finance world is still just beginning.

The Inspiration In…

Regulation

This year saw the rise of a new class of political allies that really get it. People like Congressmen Tom Emmer and Patrick McHenry are fierce and knowledgeable. Senators Lummis and Gillibrand are serving as examples of how a bipartisan group can come together and tackle thorny issues (like a better framework for which digital assets are securities) in a thoughtful way. Such alliances come on top of other major breakthroughs in regulating digital assets, such as the Markets in Crypto Assets Regulation (MiCA) – the crypto legislative package which the European Union finalized in October – and US President Biden’s Executive Order on Ensuring Responsible Development of Digital Assets—the first "whole-of-government" approach to regulating our industry.

The Inspiration In…

Nexo

2022 was a rollercoaster, but we at Nexo transformed challenges into opportunities for our clients. Here are just some of our team’s 2022 milestones:

• More than 5 million people are now Nexo users
• We launched a Web3 fund and invested in 70+ companies
• Our product team debuted the Nexo Card, Nexo Prime, Nexo Pro, the Booster, smart staking, and more
• We opened the gates to DeFi and Web3 identities with the Nexo Wallet

In 2023, we will build products that drive adoption through transparency and innovation!

The Year’s Most Interesting Data Story

Ultrasound Money (+1,243,393 vs +4,708 ETH)

In a world where the Merge never happened, it is estimated about 1.24 million in ETH would have been added to the total supply. Instead, around 4,700 have. At various points following the Merge, Ether was actually deflationary – with more supply being destroyed through fees than being created. No statistic so dramatically demonstrates the shift in the dominant smart contract platform in the world.

Tweets of the Year

One for the Ethereum history books.

Our 2022 reminder that Bitcoin has survived multiple “50%+ corrections with no bailout.”

rubs eyes

What to Watch for Next Year:

• Will meaningful industry regulation shape the crypto path forward?
• When will the first new exciting NFT project break through, and who will it inspire?
• What does the Nexo team have in store for you?