It’s strange to think that anyone could look forward to a downturn in the cryptocurrency market, but that is exactly the position held by many developers and project creators who enjoy the low stress environment that exists during a bear market.
As the saying goes, bear markets are for building, and now is one of the best times to survey the landscape to see which market segments are most active in designing platforms that will rise to new heights in the next bullish cycle.
Here is a look at five sectors of the blockchain ecosystem that may offer some of the best opportunities for accumulation while prices are low and demand is lacking.
Layer 1 protocols
Layer-1 (L1) protocols such as Bitcoin (BTC) and Ethereum (ETH) form the basis on which much of the cryptocurrency ecosystem is built and enable most other sectors of the market to exist.
However, there are currently not many options available to launch other protocols on the Bitcoin network, and Ethereum has known limitations in terms of scalability, which can lead to high transaction costs and slow processing times.
Because of these factors, there is still a great opportunity for other L1 protocols to establish themselves and gain a good slice of market share. The total revenue generated by the protocol is one metric that can be used to determine the most frequently used networks.
The total cumulative revenue of the top L1 chains over the past 180 days. Source: Token Terminal
According to data from Token Terminal, the top five L1 protocols in terms of total revenue over the past 180 days, excluding Bitcoin and Ethereum, are BNB Smart Chain (BNB), Avalanche (AVAX), Helium (HNT), Fantom (FTM), and Solana. (SOL).
Layer 2 protocols
As noted above, the Ethereum network has limitations in terms of scalability that will not be resolved during the upcoming consolidation, leaving room for Layer 2 protocols to fill the need by helping to reduce activity occurring directly on the Ethereum blockchain.
According to L2Beat, which tracks stats on top of the Ethereum L2s, Arbitrum is ranked first in terms of Total Locked Value (TVL), followed by optimism and dYdX.
Top 8 L2 networks by total value unlocked. Source: L2Beat
One network that was strangely left out of the list presented by L2Beat, but remains the most adopted L2 network in terms of wallets and active protocols launched is Polygon Network (MATIC), which currently owns a $1.59 billion TVL, according to data from DefiLlama.
For the Bitcoin network, the main L2 solution that is currently seeing increased flows is the Lightning Network, but there is no token included in the protocol. Alternatively, users can choose to run a node if they want to support the network as well as earn passive income.
The gaming sector of the cryptocurrency ecosystem has proven to be one of the most resilient sectors in terms of keeping users engaged during the current crypto winter.
The emergence of play-to-win games such as Axie Infinity (AXS) helped highlight the potential of blockchain-based games during the revolutionary cycle of 2021 and led to the emergence of many “to-to-win” genre protocols such as the movement to earn and the learning to earn.
Data from DappRadar shows that some of the top games in terms of active users include Alien Worlds, Splinterlands and Farmers World, all running on the WAX network while Axie Infinity is the game with the best asset value in Smart. a necklace.
Top six games in terms of currently active users. Source: DappRadar
There are also a handful of other games still in development but nonetheless attracting a lot of interest, including Illuvium and Aavegotchi, as well as tokens representing gaming ecosystems such as Enjin Coin (ENJ), Gala (GALA), and Ultra (UOS). )) ).
One segment of the cryptocurrency landscape that has not yet been established in a notable way but presents a good opportunity to help increase adoption is social sharing platforms similar to Twitter, Facebook or Reddit.
Previous contestants on the social media scene include Steem and its community-driven offshoot, but neither protocol has achieved widespread adoption so far.
While no other protocols currently in operation have been able to crack the code that attracts so many users who remain engaged in the long run, events in the wider world including the ongoing drama over Elon Musk’s purchase of Twitter show that social media still needs to a community-focused platform that is openly accessible.
Related: 34% of gamers want to use cryptocurrency in the Metaverse, despite the backlash
Metaverse and NFT launch pads
One last sector worth pursuing due to its broad appeal with mainstream society including efforts already underway to integrate it into everyday life is Metaverse.
To help simplify things, the Metaverse is a virtual reality representation of all the data and interactions that occur on the Internet, created