Cryptocurrencies have come a long way from the early days of bitcoin (BTC-USD) adoption. And as more cryptocurrencies have developed, the future of the space will be one that continues to grow as a multi-player arena, according to Ava Labs President John Wu.
“I think this is the third generation of crypto already. The first generation was bitcoin, the second generation was ethereum, and the third generation has been this new group of, call it ‘layer ones’ and other crypto companies that have improved upon the previous generation of technology,” Wu said during an interview with Yahoo Finance Live.
“It’s no different from, call it Friendster, MySpace, and then Facebook,” Wu said. “I think this group of new cryptocurrencies, blockchain companies have the right timing in terms of both technology and interest from the greater populous.”
“With that said, I do believe it will be a multi-chain world. It’s not going to be just one winner-take-all,” he added. “It will be more like, kind of social media. It would be maybe a winner-take-most, but then you still have a whole bunch of other dedicated specialists social media platforms out there.”
Ava Labs, backed by firms including Andreessen Horowitz and Polychain Capital, is the company behind the Avalanche blockchain, which allows users to launch and scale decentralized applications and digitize assets. Like Ethereum, Avalanche serves as a smart contracts platform, and has as many daily transactions as ethereum, Wu has said. And according to data from CoinMarketCap, AVAX (AVAX-USD), the token used in the Avalanche ecosystem, is the eleventh largest cryptocurrency by market capitalization.
While Bitcoin remains the largest and most widely known cryptocurrency, some other pundits in the space echoed Wu’s assertions of a decidedly multi-chain future.
“We’re seeing this Cambrian explosion of new applications of crypto — DeFi, Web 3.0, the metaverse, NFTs — all of which are being built on non-bitcoin blockchains: On the Ethereum blockchain, on the Solana blockchain, on other blockchains like that,” Matt Hougan, chief investment officer for Bitwise Asset Management, told Yahoo Finance Live.
“Ultimately, I do think the addressable market captured by those more performant blockchains could arguably be bigger than bitcoin,” he added. “Will it get there this year? I don’t know. Will it get there eventually? I wouldn’t be surprised.”
Gaming will be a ‘very, very powerful adoption mechanism’
After a breakout year for NFTs, ethereum and alt-coin prices, and the early notion of the metaverse, the expansion this year for crypto and decentralized finance projects will build on 2021’s momentum, Wu said. And the intersection between these and gaming specifically are likely to be a key driver of adoption, he added.
“We saw DeFi [decentralized finance] create a lot of interest, and now financial services firms are very interested in it. The NFTs created a lot of adoption — and right now it’s about gaming,” Wu said. “Gaming companies and AAA publishers are looking for their Web 3.0 strategies and talking to all the top players in this space.”
The number of non-crypto native companies hastening to get involved in the space soared last year, between Facebook’s (FB) rebrand to Meta Platforms, Microsoft’s (MSFT) record purchase of Activision Blizzard (ATVI) as an inroad to the metaverse, and Nike’s (NKE) purchase of digital collectibles developer NRFKT Studios.
“Facebook’s going to go about their metaverse in their way, more of a closed loop ecosystem. I think one of the things that will attract people to a metaverse environment on a blockchain is because it’s open,” Wu said. “More and more of these traditional tech companies in Web 2.0 are having a hard time retaining the trust of the users, and that of other companies.”
“I think what you’re going to see, though, is that the gaming companies [like] Activision and other AAA publishers, they’re probably going to start doing a lot of things not necessarily what you would think the ‘metaverse’ is, but just in pure gaming,” Wu said. “And that’s very exciting, because you get quality gameplay like that, and imbue that with the NFTs that give you a unique character that you can carry over and then a play-to-earn concept around that, then you have a very, very powerful adoption mechanism.”
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter