Crypto adoption and market moving events in 2022

Key points: 

• The number of unique addresses on the Polygon network recently passed 200 million, hitting an all-time high of 205,420,908.
• The NFT market and metaverse industry continues to attract interest from several fashion and luxury brands such as Rolex, BMW, Reebok, Nike, and Adidas. 
• The total amount of Ether staked in the Ethereum ecosystem has grown steadily. 
• Meta started the integration of NFT and crypto wallets into Instagram and Facebook. 
• Starbucks announced the launch of its blockchain-based loyalty program and NFT community Starbucks Odyssey. 
• VCs such as Animoca brands and Daesung Private Equity continue to pour money into the Web3 ecosystem.
• JPMorgan Chase is teaming up with Ripple's core partner Al Fardan Exchange. 
• Reddit users have minted more than 5 million collectibles. 
• A lot of countries have introduced preferential crypto regulations for 2022 or plan to introduce them shortly.

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It’s no secret that bearish pressure has been hanging over the cryptocurrency market throughout 2022. However, amidst all the turmoil and chaos, there has also been a lot of positive news – especially related to the widespread global adoption of digital assets and crypto-related technologies.

Looking back on 2022, here are some key launch-related events that have helped drive the industry forward over the past year.

Polygon amasses 200 million addresses despite a challenging 2022

While financial uncertainty has gripped the cryptocurrency market since late 2021, Polygon — a layer 2 scaling solution that runs alongside the Ethereum blockchain and enables fast transactions and low fees — continues to hold its own in 2022 strong growth. The number of unique addresses on the network to date recently passed the 200 million mark, hitting an all-time high of 205,420,908 on December 31.

Additionally, the number of unique addresses in the Polygon ecosystem increased by 8,783,568 between Dec. 1 and Dec. 31, indicating that in the last month of 2022 alone, an average of 283,340 new Polygon-related network addresses were created per day. It is also worth noting that the number of transactions within the network continues to hover around the 3 million mark.

Polygon address count growth throughout 2022. Source - PolygonScan

Finally, the Proof-of-Stake project recently announced the release of its latest testnet, an enhanced iteration of its zero-knowledge Ethereum Virtual Machine.

Big brands continue to enter the Web3 field

The non-fungible token (NFT) market and metaverse industry continue to attract interest from several fashion and luxury brands. For example, Rolex — a popular watch brokerage with global operations — submitted multiple NFT-related brands in October, as well as one for a cryptocurrency exchange. Popular sporting goods giants such as Reebok, Nike, and Adidas have taken similar steps.

Nike launched a virtual world called .Swoosh, a Web3-enabled platform where customers can buy and sell virtual products. The platform will reportedly focus first on community building, while the company's first virtual collection — including footwear, apparel, and accessories — will launch sometime in January 2023. Once launched, the platform will only allow the use of cash, not digital currencies. All transactions are recorded on the Polygon blockchain.

Adidas released a new line of virtual gear last year, along with a picture-verified dress-up tool that allows them to dress up avatars from compatible partner series such as Bored Ape Yacht Club with their gear. Reebok has filed numerous trademark applications in the US covering a wide range of virtual apparel, including footwear, headgear, and athletic gear.

Finally, luxury automaker BMW announced that it, too, has decided to join the Metaverse fray by filing a trademark for its logo for use in its upcoming virtual cars, digital retail, and other related services.

The total amount of pledged Ethereum continues to grow

Throughout 2022, the total amount of Ether locked in the Ethereum ecosystem has grown steadily. From February to June, the amount of ETH staked increased from just over 9 million to nearly 13 million. As the chart below shows, the trend plateaued between June and September, but picked up momentum again in mid-September, just before Ethereum’s long-awaited transition to proof-of-stake.

Total value of ETH staked. Source - CryptoQuant

In the context of the Ethereum network, staking refers to the act of depositing 32 ETH into the network, which allows individuals to gain validator rights and allows them to earn additional ETH. As a validator, users must complete several tasks, such as storing data, processing transactions, and adding new blocks to the blockchain to secure the network for all participants.

Meta integrates support for NFT

In early May, social media giant Instagram unveiled its testing plan for select users in the United States to share NFTs. At the time, a company representative explained that this would create more monetization opportunities for influencers on the platform and introduce NFTs to a larger customer base. A few months later, in August, Instagram decided to expand its NFT business to more than 100 countries in Africa, North America, and Asia.

Meta also announced that it will integrate support for third-party projects, including Coinbase Wallet and Dapper Wallet, while expanding its NFT offering to its other core social media platform, Facebook. In November, Instagram’s development team announced it was testing the ability to mint and sell NFTs with a select group of digital developers. The feature will go live on the Polygon network, with developers and collectors initially paying no gas fees.

Starbucks' blockchain-based loyalty program goes live

Starbucks announced the launch of its blockchain-based loyalty program and NFT community Starbucks Odyssey to a group of testers in the United States in September. The program builds on the company's existing loyalty program but uses a decentralized structure built on the Polygon blockchain.

Starbucks Odyssey is a rewards program that allows users to earn perks that go beyond earning free drinks. Odyssey allows customers to interact with various game-style products while earning NFTs (called Journey Stamps). These assets can be traded and redeemed later.

VCs continue to pour money into the Web3 ecosystem

In Q4 2022, Animoca Brands — the company behind several successful cryptocurrency projects, including The Sandbox — established a multi-billion dollar fund to invest in various Metaverse projects.

According to Animoca co-founder Yat Siu, the fund will increase the utility of the Metaverse and the blockchain gaming market. “Every day more and more people are getting into cryptocurrencies, especially in gaming,” he said, adding, “I hope this will also push forward the scenario where the digital property is recognized in the legal system like physical property. "

Along with Animoca, South Korean venture capital giant Daesung Private Equity is among other hot companies investing heavily in the nascent Metaverse economy. The company recently announced that it has committed a total of 1.1 million won ($83.9 million) to its Metaverse-focused fund.

JPMorgan Chase partners with Ripple

U.S. banking giant JPMorgan Chase is teaming up with Ripple's core partner Al Fardan Exchange in 2022 to provide faster transaction processing and remittance services for users in the UAE.

Al Fardan clients can trade cryptocurrencies against several popular fiat assets, including USD, GBP, and EUR.

Notably, this partnership comes amidst Ripple’s ongoing litigation with the SEC. The regulator went on to claim that XRP, the crypto product associated with the project, is secure and as such is subject to the legal and regulatory ramifications associated with such assets.

Reddit users minted over 5 million NFT avatars

Social sharing site Reddit has seen its users continue to rapidly adopt NFTs over the past year, even as their sales have plummeted. It is estimated that Polygon-backed initiatives have minted more than 5 million collectibles to date.

Also, it has to be mentioned that these avatars are not focused on high-value NFT collectors (ala whales), but are distributed across over 4 million unique wallets. Finally, most of the aforementioned minted NFTs were given away for free to high-value users of Reddit.

Tiffany enters the crypto space

Luxury jewelry and specialty retailer Tiffany & Co. announced in August that it would launch a limited collection of NFTs called NFTiff, each with a base price of 30 ETH (approximately $36,000). A total of 250 of these NFTs were produced.

In early March, Tiffany purchased the Okapi NFT from Tom Sachs for $380,000. The image has become the company's Twitter profile photo.

Positive law continues to gain importance

In late 2022, the Brazilian Congress passed a bill aimed at regulating the use of digital currencies for everyday payments within its borders, which could boost the adoption of crypto in the South American country. The bill gives legal status to cryptocurrency payments for goods and services but does not give them legal tender status.

Similarly, Abdellatif Jouahri, governor of Morocco’s central bank, Bank Al-Maghrib (BAM), announced that the country’s main regulator will soon finalize a comprehensive crypto governance framework. Competent authorities include the Moroccan Capital Market Authority and the Insurance and Social Welfare Inspectorate.

Jouahri revealed that BAM developed the document together with the World Bank and the International Monetary Fund.

Other countries that have introduced preferential regulations for 2022 or plan to introduce them shortly include India, Germany, Australia, and the United Kingdom.

Cryptocurrency adoption is on the rise in MENA, Asia, and Latin America

The Middle East and North Africa (MENA) region was the fastest-growing market for cryptocurrency adoption last year, according to a study by blockchain analytics firm Chainalysis.

Between July 2021 and June 2022, the region received $566 billion worth of cryptocurrency transactions, an increase of nearly 49% year-on-year. Objectively speaking, Europe grew by 40%, North America by 36%, and Central and South Asia by 35%.

Likewise, Latin America accounts for 9.1% of all crypto value received in 2022, totaling $562 billion, while growing by 40% between Q3 2021 and Q3 2022. A total of four Latin American countries are also participating in Chainalysis. List of top crypto adopters.

Finally, Vietnam currently has the highest crypto adoption rate in the world, followed by the Philippines and Ukraine. Other emerging markets to dominate Chainalysis' 2022 adoption index include India, Brazil, Thailand, and Pakistan.