This year has proven to be an acceleration of a macro trend that started in 2021: it’s less about whether you are in crypto and more about which sub-sector your money is in. That means great returns can be earned by observing which sector investor sentiments are shifting towards and finding a way to “index” into the broader idea. This is no different than traditional finance markets, and is a suitable approach for those who are not all-in and following every single development in the market.

As such, the thesis presented below provides a macro view that will help analysts determine where to spend their time in the next six months. So without further ado, Secure Digital Markets (SDM) expects these four sectors to thrive in 2022:
1. Layer 1s
2. Stablecoins
3. Metaverse
4. P2E

Each of these has already generated enough of the initial interest for the thesis to be partially validated. However, market capitalizations and adoption figures show there is still plenty of room for growth.

Layer 1s
The emergence of a multi-chain ecosystem has become a foregone conclusion at this point. Everyone knows it’s going to happen—it’s just a matter of which chains will dominate which use cases. In the coming months, it will be critical to look at what use cases need to be filled, where the developers are and where the growth in wallet addresses is.

Four unexpected winners of 2021 were SOL, AVAX, LUNA and MATIC. In a lot of ways, this “theme” is equally about not being ETH as it is about the strengths of the alternative chain in question. Users are looking for ETH alternatives right now.

Many users are looking for a place where they can perform DeFi transactions without paying over $100 per transaction on the ETH chain. This is what initially pushed more money to AVAX and SOL. MATIC fits into a similar narrative and has onboarded more money than any other Layer 2 solution for ETH. It also functions in many ways like a leveraged position in ETH.

On the LUNA front, they’ve done well by having a built-in stablecoin. These types of utilities make a protocol much more attractive and show a maturity that brings potential converts from other ecosystems.

Some interesting alternatives SDM is tracking are Fantom, Atom, Near and Harmony. Each of these is battling to pick up total value locked (TVL) and developer movement. The way SDM analyzes these is by looking at daily active users, fees, and TVL. In the end, we’re looking for the battle-tested networks.

Strong communities will help in the short- to mid-term, but looking for the dApps being built on each of these chains and figuring out where the actual users are going is the real indicator of long-term success.

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