Paul Veradittakit, Partner at Pantera Capital, one of the biggest crypto investment funds in the space, appeared on CoinDesk Insights’ Opinion section to make some predictions on what 2022 will bring for crypto.

First, non-Ethereum chains will continue to grow explosively following last year. Given the fact that Ethereum had 97% of all total value locked (TVL) across DeFi protocols at the end of 2020, but only 63% at the end of 2021, we can see that there is a surge in interest and demand for non-Ethereum chains, mainly due to the fact that Ethereum’s gas prices are continuing to rise, and that other chains offer cheaper and quicker transactions.

Second, the fact that blockchains such as Solana and Cardano are on the rise puts Ethereum in a spot where they need to improve their scalability and transaction prices/speed to remain in the top echelon of blockchain network for years to come. As quoted from Veradittakit’s article, “The biggest criticisms of Ethereum today involve its ridiculously high latency and gas fees, which inhibit the computational capacity of dapps and discourage users who lack substantial capital.”

And thus, Layer 2 solutions, which processes transactions off-chain and posting bundled transaction data on-chain, becomes increasingly crucial, since it massively increases the throughput of Ethereum’s processing capabilities. According to Veradittakit, “Both optimistic and ZK rollups will gain even more traction in the coming year, with optimistic rollups likely to dominate in the short term while ZK rollups, which are much more technically complex, advance as a long-term scalability solution.”

FInally, with the rise of NFTs and the metaverse, Veradittakit also predicts a firmer connection between users and digital assets, stating that “NFT projects in 2022 will show substantially more diversity in use cases and will reconfigure how we interact with and think about ownership of digital media more broadly.” Participants in the metaverse will have full control over their ownership and identity in the digital realm, and this will signify a transition from online social media profiles to a new age of digital representation of oneself within the metaverse.

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