• Despite investor scare, top crypto trends this year lend hope to investors.
• Top trends to watch out for include Liquid Staking, Artificial Intelligence, etc.

Many investors in the digital currency ecosystem recorded a lot of significant losses in the past year owing to a number of negative crypto trends including hacks and bankruptcies that rocked the industry. Despite this, the promise of a better year has been masked by the showcase of the aftermath of the bankruptcy of FTX Derivatives Exchange and the Digital Currency Group’s subsidiary, Genesis Global.

Besides this, a tougher regulatory push has been introduced by the United States Securities and Exchange Commission (SEC) as marked by the crackdowns on Kraken Exchange as well as Paxos Trust, the issuer of the Binance USD (BUSD) stablecoin.

Amidst all these, there remains some form of positive in the ecosystem with respect to trends that are worth investing in. Here are some of the top trends with prospects for massive profits this year.

1. Layer-2 Protocols

Layer-2 (L2) protocols are arguably one of the most common focuses for investors as the infrastructure they embody is considered the next generation of crypto transactions. Layer 2 are blockchain networks in their own right but they are built on a parent chain.

Top examples of L2 protocols include Polygon, Optimism, and Arbitrum, all resident on the Ethereum protocol. Based on their current perception, L2s are now being built on the Bitcoin blockchain with the Lightning Network being the most prominent thus far.

L2s help make transactions faster and more cost-effective, and by their promise, Coinbase Exchange has recently introduced its own protocol dubbed Base.

2. Liquid Staking Derivatives

Liquid Staking Derivatives (LSD) platforms are now very popular and are currently being primed for a massive upshoot this year. This sentiment is hinged on the upcoming Shanghai Upgrade on the Ethereum network which will allow stakers to withdraw their assets.

As a Proof-of-Stake (PoS) platform, Ethereum allows users to stake their Ether coins for an opportunity to earn rewards. This staking venture was supported by LSD platforms including but not limited to Lido Finance (LDO), RocketPool (RPL), and Frax Finance (FXS). 

With the ability to withdraw staked tokens, these platforms will be more attractive to investors, thus boosting their overall valuation over time.

3. Decentralized Exchanges

Decentralized Exchanges like Uniswap, SushiSwap, and PancakeSwap are some of the current raves of the town. As one of the legacy innovations in the Decentralized Finance world, DEXes have continued to evolve to make themselves more attractive to users and investors.

They remain one of the prime contenders for investors looking to inject cash into the crypto ecosystem this year.

4. Zero Knowledge Proofs

Zero Knowledge-zk-Proofs remain one of the most hyped technologies in the digital currency ecosystem and it is being actively invested in by Binance CEO, Changpeng “CZ” Zhao as well as other top players including Mina Protocol, Immutable X, and Dusk Network. With security at the heart of its innovation, ZK remains a go-to innovation for cash injection this year.

5. Artificial Intelligence

Artificial Intelligence (AI) remains a fast-growing and most hyped technology which has been gaining traction as one of the key crypto trends lately. With the advent of ChatGPT, the hype surrounding AI is even more and protocols like Flux, and SingularityNET are making moves to create blockchain-backed solutions in this regard.