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Topic: The Crypto Proposition for 2022 - Key trends, people, companies, and projects in the crypto space worth watching, along with predictions for 2022.
Original report download link: https://messari.io/pdf/messari-report-crypto-theses-for-2022.pdf
We will discuss interoperability in Chapter 8, but for now, I think Udi is correct: if the future consists of hundreds or thousands of interoperable blockchains, end users may not know or care which blockchain a currency application runs on. Bitcoin holders will hold and use Bitcoin as a substitute for digital gold without worrying about which chain they use in the process or the technical details of anchored Bitcoin derivatives. As long as the underlying Bitcoin blockchain hums along every 10 minutes and produces blocks.
More than 1.5% of the Bitcoin supply has been wrapped via BitGo on Ethereum, more than double what was locked at the end of last year. But this could just be the tip of the iceberg, as millions of Bitcoins also begin to impact other blockchains.
Some demand drivers for Bitcoin:
BTC will become a reserve for other Layer 1s, while ETH will be their competitor.
Cross-blockchain bridge protocols like Rune will unlock more peer-to-peer exchanges.
Fear of stablecoin independence, censorship resistance, or collateralization may lead to greater interest in Bitcoin-backed crypto dollars.
Ethereum bulls might protest, arguing that these are precisely the reasons why ETH becomes premium money and capital assets: it is compatible with other EVM chains and Layer 2 rollups, and stablecoins like Maker's Dai have already been collateralized. But that’s looking backward. BTC leads by a market cap of 2.5 times, and today its usage as operating capital is much lower, meaning it is under-leveraged, and the cap for new BTC as DeFi collateral is much higher than ETH.
I believe that wrapped/synthetic Bitcoin tradable on other blockchains will double again in 2022 (at least 75% of people believe we will see a 3% wrapped share), as more and more long-term Bitcoin holders realize they can borrow at cheaper rates in DeFi than through centralized services.
(You can read more about DeFi assets that facilitate Bitcoin interoperability in our report.)