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Crypto-concentrated venture capital company pantera capital, which has approximately $3.8 billion in assets under management, summarized its 2023 projections, and the future is decentralized finance (challenge).
The bear market that emerged early last year was worsened by a wave of headline-grabbing exploits and bankruptcies, including the implosion of multibillion-dollar centralized exchange FTX and last week’s filing by crypto lender Genesis, a sister company of CoinDesk’s.
"Pantera has managed blockchain funds in three previous "crypto winters," said Dan Morehead, Pantera's CEO and Co-CIO, in the foreword to his letter to investors, This is called "The Year Ahead".”
“Each one had supposedly catastrophic events. For example, when Mt. Gox has declined, accounting for 85% market share – well above ftx today," said Morehead. Blockchain will turn the world around. He's certainly going to survive this.”
2023 crypto market outlook
“Looking forward, I think it seems fairly evident that the historical arc of the world’s financial rails will end up as blockchain-based systems using smart contracts. The real questions are how and what to do about it," wrote Joey Krug, Co-CIO of Pantera, in a section of the letter.
He noted that scalability systems have increased transaction costs on Ethereum's blockchain to less than 10 cents. The Board expects future upgrades to Ethereum and protocol extensions for Layer 2 scalability systems to further increase transaction costs to approximately one cent, This would help decentralized fellowships to compete with larger central fellowships.
Krug views crypto's "end state" as a world where the "average person will have applications on their phone that give them access to challenge, where they can trade without banks/brokers, discounted, international liquidity and 24/7 markets.", krug wrote, The achievement of this end-state requires solutions to a number of current problems that fall into two categories: increasing challenge liquidity and facilitating challenge utilization, especially for new cryptos.
With respect to liquidity, Krug stated that it is important to obtain more challenging institutional capital in the form of more federal or government-regulated custodians that directly support the use of etheum. An alternative approach would be to pool cash across multiple chains, the second tier and the cash reserves of these channels, This would allow applications to scan essentially the best price and performance after users submit a transaction. However, such aggregation would require the construction of secure transverse bridges, which could appear an ambitious goal after the wave of exploits of these bridges in 2022.
With respect to user-friendliness challenges, Krug said they have improved, but there is still room for improvement with crypto portfolios in particular. User-friendly experience, or ux, design, The elimination of negotiation fees to be paid in ether (eth), regardless of the asset being negotiated, and the best ramps are all considered significant improvements.
Pantera Capital General Partner Paul Veradittakit outlined his 2023 predictions in a CoinDesk article in December, and forecast increased investments in DeFi, Ethereum scalability technology and non-fungible tokens (NFT).
