2022 Recap: A Wild Ride for Web 3.0

2022

Looking back on 2022, cryptos, NFTs, Metaverse and Web 3.0 have taken the world by storm. And with no doubt, this year has been a wild ride for the entire Web 3.0 industry. As the year comes to an end, let’s recount some of the biggest events in the space.

The Fall of the Giants

Among all the things that happened in the Web 3.0 space this year, the fall of Terra LUNC (Previously known as LUNA) and FTX probably caught the most eyeballs. In May, Terra LUNC first crashed 99.9% from US$120 to US$0.02 within 48 hours. The crash continued further, and LUNC was eventually delisted by several crypto exchanges. The LUNC meltdown brought catastrophic impacts – tanking the price of Bitcoin, causing an estimated loss of US$300 billion in value across the crypto space, and forcing crypto leaders Voyager and Celsius to file for bankruptcy and Three Arrows Capital into liquidation. Fast forward to four months later, a court in South Korea issued an arrest warrant for Do Kwon, the founder of Terra LUNC. Along with five other people, Do Kwon is now accused of violating local market laws.

While the cryptocurrency space is still struggling to recover from the collapse of LUNC, in November, FTX, one of the largest crypto exchanges also collapsed over a period of 10 days. A report published by CoinDesk questioning the financial health of FTX and Alameda Research, a trading firm founded by FTX leader Sam Bankman-Fried (SBF), brought the problems of FTX to light. It was revealed that Alameda had been using FTX customer assets to cover trading losses. Eventually, FTX, Alameda, and dozens of subsidiaries filed for bankruptcy, and SBF stepped down from his position as CEO. Since Dec 12, SBF has been held in Bahamian custody after being charged with eight criminal counts by the US attorney’s office for the Southern District of New York. These criminal charges include wire fraud, commodities-fraud conspiracy, and securities-fraud conspiracy.

The World’s Weirdest NFT Project’s Surprising Success

Goblintown, also known as “one of the strangest NFT collection the world has ever seen”, was born in the midst of the NFT market crash. The free-mint project was so weird that its creators were anonymous during the launch; it had nothing to be considered as a promising NFT project – no roadmap, no Discord and no utility; and their marketing events were unconventional – hosting an almost-three-hour Twitter space where speakers made goblin noises.

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Image: Screenshot of Goblintown Website (https://goblintown.wtf/)

Yet, Goblintown went viral immediately after its launch and minted out in just a few days. The floor price of the project reached more than 2 ETH (~US$2,500) and rocketed up to 4 ETH (~US$4,800). Jaw-dropping, right? About a month after the project went live, the creators of Goblintown finally revealed themselves to be Truth Labs in a Tweet.

More Web 2.0 Brands Come into Play

In the Web 2.0 era, user behaviors are recorded which allows brands to reach their targeted market more efficiently and effectively. In the Web 3.0 era, online community building is emphasized which shows the potential to foster brand loyalty. Many brands have seen this potential and are developing Web 3.0 initiatives to interact and engage with their customers innovatively.

These brands span across a wide range of industries, including banking, fashion, food & beverage, entertainment and more. For example, Nike has unveiled .SWOOSH, a Web 3.0-enabled digital platform that allows Nike fans to learn about, collect and eventually co-create virtual creations with Nike, such as interactive virtual shoes or jerseys. Starbucks has also launched the Odyssey program, a Web 3.0 extension to its Starbucks Rewards program which combines customer loyalty rewards with NFT collecting and other gamified elements.

NFT Art Remains Strong

Last year, the rise of NFTs shook up the art world. Since then, there is growing interest in NFT art from the crowd. Throughout 2022, we have seen more digital art exhibitions being held, more galleries featuring NFT and digital arts, and more artists combining art with blockchain technologies, providing the public with more exposure to NFT and digital art. For instance, the world’s leading international art fair Art Basel exhibited numerous NFT and generative art pieces and hosted Web 3.0-themed panel discussions at their fairs in Basel, Hong Kong and Miami Beach; the innovative Web 3.0 fine art fair Digital Art Fair returned to Hong Kong with its Xperience show and welcomed more than 10,000 visitors over 18 days; American digital artist Beeple’s hybrid NFT sculpture HUMAN ONE made its Asia Premiere at M+ in Hong Kong.

What about the art collectors? A survey co-published by Art Basel and UBS shows that collectors are spending more on NFT art. Just in the first half of 2022, the average spending on art-based NFTs of high-net-worth collectors was US$46,000, higher than that of 2021 (US$44,000) and 2020 (US$35,000). Digital art accounted for 17% of their overall expenditure, including 10% linked to an NFT. It is safe to say that NFT art has proven itself not just a flash in the pan.

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Beeple’s hybrid NFT sculpture HUMAN ONE is now on view at the Focus Gallery of M+ Museum Hong Kong until April 30, 2023. Image: M+

It has been a year full of ups and downs. Besides learning from the failure of LUNC and FTX, let’s not forget there are still many market players working around the clock to build the Web 3.0 ecosystem for the better. We are proud of everyone in the space for holding out against the toughest time ever and excited to see more people kickstarting their journey into Web 3.0. Cheers to 2022, and to a brighter, smarter, and stronger new year!