Why reinvent the wheel?
After promising to be the most transformative tech in a decade, crypto seems to have lost a bit of its edge lately.
Blame some of that on a down economy, blame even more on an uncertain regulatory climate. Either way, there’s a distinct impression that the crypto engine isn’t running quite as hot as it used to.
But take a closer look under the hood, and all is not as it seems.
Crypto innovation hasn’t slowed down, as much as it has matured. Two main trends within the tech look set to drive the next wave of applications forward – and possibly set the stage for the next bull market.
Here we go.
Why reinvent the wheel?
The old marketing adage goes that if you want to know what will sell in a particular market, look at what people are buying. With crypto, entirely new markets have emerged – but old ones are also making the jump to adapt crypto and web3 principles.
We’re seeing moves in two major areas recently – one older sector that’s making big waves with blockchain tech, and one cutting-edge tech that’s coming to prominence.
Social media crypto apps
A couple years ago, the big traditional vs. crypto crossover was gaming. Axie Infinity and others dominated the discussion, and the market, drawing millions in TVL.
Crypto gaming isn’t dead, but the downturn exposed the inherent weakness of Axie’s model. In the meantime, there’s a new market that’s drawing attention: crypto social media.
The big name to remember is Friend.Tech. Combination marketplace and social media app, Friend.Tech allows users to “buy” access to well-known influencers. The more followers an influencer has, the greater the price of new followers, thanks to a dynamic, bond-based pricing system.
Friend.Tech launched in August 2023 and immediately caught fire. Then it dived. Then it caught fire again. Then crashed again, then grew once more.
That’s a wild ride for a social media app that’s only 2 months old. But Friend.Tech is part of a rapidly-growing segment of social token-driven platforms. The idea has been around for a while, but Friend.Tech was the first to capture the imagination (and participation) of a broader audience.
The result? $14.4 million in revenue for users and influencers, on an app that’s still in beta! The app boasts a cumulative $294 million in trading volume since launch. And the competition is taking note, with imitators like Post.Tech and Words.Tech. The former notched its own victory, with over 60,000 cumulative active users in under a month.
The social media-to-web3 push comes on the back of increasing censorship concerns with current major social media titans. X (formerly Twitter) has its own issues, and OnlyFans once famously tried to ban porn, forcing a major outcry (and quick reversal).
Will Friend.Tech prove to be the model that works for everyone? It’s too early to tell, but the decision to take proven markets (social media) and integrate them with web3 tech may yet prove to be the right call.
It’s also worth noting that many of these social token-driven platforms are built on a diversity of platforms, including Solana and Arbitrum.
Pushing the frontier
But the crypto economy isn’t just about taking existing models and reworking them. The push to create something new, and to develop the tech as far as possible, is very much alive even in a tough market.
So let’s look at zk proofs.
The idea for zero-knowledge proofs is nothing new – the principle was first proposed back in 1985.
But the advent of technology that relies on real-world application of cryptographic principles – the blockchain – moved zero-knowledge applications from the theoretical to the practical.
The upshot? Zero-knowledge proofs allow users to provide vital information (bank account details, personal identification, etc) without having to pass on that information. No more trusting a financial institution to store your info securely somewhere; with a zk-proof, you can actually meet the data requirements without sacrificing privacy or security.
Hence the “zero-knowledge” part; at the end of the process, the institution (the verifier) doesn’t hold copies of the proof. There is no knowledge, directly, of the information – therefore, nothing to be compromised in a hack or data breach.
As expected, zk proofs are technically complicated to conduct. But the resulting applications can be remarkably simple. The idea has strong significance for social media apps, including the crypto-based ones mentioned above.
The maturing crypto finance market continues to draw heavy investment. Now, zk-specific apps and platforms are beginning to capitalise on the push. The zk-based DEX Brine Fi just raised over $16 million from Pantera Capital. Canto, a formerly overlooked Layer 1, has pivoted to become a zk-proof based Layer 2 on Ethereum.
And in recognition of the focus on zk-proof applications, Polygon recently released a ZK-based Chain Development Kit (CDC), to make it easier for developers to build custom ZK chains.
Going from “trad” to “crypto”
Here at Plexus, we see the shift first hand, as more and more traditional markets adapt crypto and web3 tech.
That’s why stablecoins keep growing and bridging the gap between crypto and fiat currencies.
It’s also why DeFi continues to mature as a sector, drawing increased attention from the traditional large institutional investors of the world of finance.
On the hiring side, this helps to explain why there’s a continued focus on experienced developers, even when new projects are less common than they used to be. It also highlights the emphasis on marketing professionals who can bring high-level crypto concepts down to earth and demonstrate the value of new projects with cutting-edge technology.
Crypto continues to transform even old-school industries, like traditional finance or modern social media, into web3-based platforms. And for professionals in those industries, that means the opportunity is ripe to be on the cutting edge of a move towards a high-growth environment with nearly limitless potential.