This excerpt is taken from the 100X.VC Startups Sector Outlook Report. Read it at www.100x.vc/research

Bitcoin is fast becoming the preferred mode of savings and payments in African / LatAm nations. These generally have weak fiat currencies and poor fiscal + monetary policy. Ethereum on the hand is on track to accomplishing the goal of being "World Computer". The future of the internet is being built on top of Ethereum - called Web3. Here are a few trends to be ready for 2023:

• Lightning Network:

   LN is a Payments Channel built on top of the Bitcoin network. LN makes BTC payments a lot faster than settling it through the Bitcoin network. The capacity of the network and number of payments are growing at a pace of 400% QoQ. The network has a current capacity of 5000BTC or about $85Mn.

• Taro Network:

  The Taro Network extends the functionality of the Lightning Network. Through TN, countries can now issue stablecoins on the Bitcoin Network. The Lightning network settles payments in these coins. The Bitcoin Blockchain keeps a ledger of all the transactions.

• Decentralized finance (DeFi):

  The DeFi ecosystem is a refactoring of the banking ecosystem. Financial transactions and functions that are deterministic are now run on the blockchain. Functions like Collateralised Lending, Market Making, Swaps, Derivatives Trading. No intermediaries, no uncertainty.

• The Ethereum L2 Ecosystem:

  Polygon, Arbitrum, StarkNet are Layer 2 networks for Ethereum. They settle transactions faster than Ethereum. The TXs are then ledgered back on the Ethereum chain. L2s play a critical role in scaling Ethereum while maintaing the trust of Ethereum.

• Zero Knowledge Proofs:

  zkProofs allow a party to prove they know a secret without sharing it. Complex cryptographic methods help do this. Chains use zkSNARKs and zkSTARKs to prove computation without sharing the exact computation. This allows L2s, for e.g., to communicate and add thousands of transaction on chain. All this without the chain having to actually verify the transactions.

• App-specific chains:

  AppChains are L2s built on top of Ethereum for a specific app. For example, ImmutableX, an NFT exchange, has a dedicated StarkNet chain. Through this dApps can have dedicated compute. All this while ledgering validated transaction on the Ethereum chain.

• Bridges:

  Bridges connect all different chains to each other. They allow movement of TXs and assets between chains. They play a crucial role in a multichain world.

• NFTs:

  Non-fungible tokens are unique tokens created on chain. Each NFT is unique, has clear ownership rights, and one can't replicate them. They play a function in IP and ownership management. NFTs are also used by brands to create a community of loyal fans. They are also evolving to gain utility. They play a huge role in the rising gaming ecosystem.

• Strongly On-Chain Gaming:

  Entire games are being built on the blockchain. For example, you have Topology GG, Dope wars, and Dark forest eth. These are games where entire physics layers, game engines, and rules are on chain. This allows sharing of the game's core assets, and leads to real interoperability. Today we see rule based and turn based games. We will see more AAA games as the infrastructure improves.

Web3 will transform the existing conventional processes of the different sectors. Using decentralised data and compute is good for businesses and individuals. Neither can a single entity wall you in with data, nor can they censor you.

We've covered Web3, and more Sectors that will shine in 2023. Read the entire report at www.100x.vc/research