Stacy Muur, a well-known DeFi and Web3 researcher, recently shared her analysis of August crypto trends on Twitter.
In his post, he highlighted two main trends he believes will shape the future of the crypto space: liquidity flow to new layer 2 (L2) networks and the adoption of account abstraction (AA).
1- New Layer 2 Networks
According to Muur, one of the most important developments in 2023 will be the move of liquidity from existing L1 and L2 solutions to new L2 networks that offer faster, cheaper and more scalable transactions.
The analyst noted that the past week has seen impressive growth in the total locked values (TVL) of several new Ethereum scaling solutions such as Base, Mantle and Linea.
He also presented a detailed breakdown of the best protocols according to TVL in each of these new L2 networks and their predictions for the future outlook of their ecosystem. He noted that some of the top-tier protocols expected to launch in these new L2 networks include Aave, Balancer, Rhino Fi, Magic Eden, EigenLayer, Ankr, PolyhedraZK, Pendle, Rarible, Orbiter Finance and more.
It also monitors the likes of Volmex Finance, Perennial Labs, Pike Finance, Farcaster, Moonwell DeFi, Gauntlet Network, Myso Finance, StraDefi.io, Stratum Exchange, Pinnako Dex, Script Network, Lynex Fi, Velocore XYZ, Star Protocol, Bounce Finance and Cashmere Labs. He also mentioned some lesser-known protocols that he thinks are worthwhile.
Among the new L2 networks, Muur cited Mantle as one of the most powerful solutions. He explained that Mantle has many unique features that set it apart from the rest, such as EigenLayer MNT dual staking, Mantle LSD (Layered Security Design) and a diverse ecosystem spanning GameFi, DeFi, NFTs, Social and more.
2- Account Abstraction
The second trend Muur highlighted in his analysis was computational abstraction (AA). He described AA as a significant advance in improving the user experience (UX) of DeFi products. UX ensures that the underlying technology of the blockchain is decoupled from the UI.
This means users can interact with DeFi products without having to worry about complex details such as gas fees, nonce management, transaction signing.
Muur noted that MetaMask is currently working on ways to provide its users with the benefits of account abstraction.
It also listed a few key developments that have taken place in this area or are expected to take place in 2023. Among them are:
- Fuel Network – a local account abstraction modular execution layer
- Holdstation – a smart contract wallet for futures trading on zkSync
- Plena Finance – an abstraction wallet
- Fuse Network – A business and consumer friendly blockchain for mainstream adoption of Web3 payments
- Argent – another account abstraction wallet
*Not investment advice.
