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Web3 space is now experiencing its first “crypto winter”. While building new products never stopped, a favorable crypto market climate is key to a new wave of interest in Web3.
Play2Moon compiled indicators to watch while waiting for the next bull market. As BTC recovered above $27,000, more signs may be added for an eventual 2024 return to a bull market, or at least more active blockchain usage.
1.Increased Decentralized Application (dApp) Adoption
The growth of dApps, which run on blockchain networks and offer various services, is a critical metric for Web3 adoption. A surge in the development and use of dApps across different sectors, from finance to gaming and social networking, signifies a maturing Web3 ecosystem.
The tracking of Web3 activities can be done through Dappradar, or through blockchain explorers. Specialized networks may give indication of increased traffic, such as the blockchain explorer for Avalanche C-Chain.
2. Interoperability and Cross-Chain Solutions
Web3 is built on the concept of blockchain interoperability, allowing different blockchain networks to communicate and share data seamlessly. The emergence of robust cross-chain solutions, bridges, and interoperable protocols fosters a more cohesive Web3 ecosystem and can indicate its progress.
Checking the health of bridges can give hints at a potential comeback.
3. Widespread Decentralized Finance (DeFi) Growth:
DeFi has been a driving force in the Web3 movement, offering decentralized financial services like lending, borrowing, and trading. An increase in the total value locked (TVL) in DeFi protocols, as well as the expansion of DeFi products and platforms, points to Web3’s growth.
The TVL of DeFi in Q3, 2023 is close to $40B, with smaller fluctuations.
4. Demand for user-controlled data:
One of the best use cases for blockchains is private identity and data ownership. Growth in privacy apps is indicated through a new class of tokens. So-called Identity Tokens belong to projects that use blockchains for an immutable ID, used in a Web3 ecosystem.
Worldcoin is the leader of the group, but others have pivoted to identity-based Web3 projects.
5. Expansion of Play-to-Earn Ecosystems:
A robust play-to-earn ecosystem includes not only the games themselves but also related platforms, marketplaces, and supporting infrastructure. This can be seen in the development of new P2E games, the growth of secondary markets for in-game assets, and the emergence of tools and services that enhance the P2E experience.
NFT trading is also an indicator, with the potential for value to return. NFT and games are strongly connected, as games give NFT as prizes, or issue their own collections.
While a bull market can have many triggers, the above signs can also indicate niches where there is still robust trading and liquidity.