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This year has been explosive for the crypto economy and the star of the show so far has easily been Ethereum and its burgeoning DeFi and NFT arenas.
This is interesting, given that in 2019 people had no shortage of predictions about the 2020 DeFi, but now it seems that in retrospect almost everyone has underestimated how far the Ethereum ecosystem and its sectors would have advanced this year.
That said, now is the time to start calibrating our forecasts for next year with the new information we now have at our disposal for the past few months (which feels like years, right?). So, as an Ethereum analyst, here are my predictions for 2021, which are 10 milestones that I think the Ethereum community has a great chance of scoring next year.
Uniswap hits $ 10 billion
As Ethereum’s leading decentralized exchange, Uniswap was right at the heart of much of the 2020 DeFi boom. This pushed the trading protocol to be DeFi’s largest dApp right now with total value locked (TVL) of + $ 2.6 billion.
I say that Uniswap’s superior service and location continues to push its growth to the point where the project’s TVL grows 4x from here and easily surpasses $ 10 billion in 2021. As of press time, the entire DeFi ecosystem’s TVL it was $ 11 billion, so if Uniswap manages such a fast growth it will truly be a sight.
Rai = Serious From Competitors
The main MakerDAO decentralized lending protocol was only used to back its Dai stablecoin with ETH as collateral. As the project has since embraced other tokens as types of collateral, new types of risks have been introduced that have disabled some users.
What attracts more than a few people to DeFi, then, is the idea of a more conservative Dai competitor. And this is where the new Rai project comes into play. In particular, Rai relies on reflected obligations (similar to a more stable version of ETH) for guarantees and has a governance structure that is reduced to a minimum. This model makes Rai ready to get serious adoption in 2021 (and beyond).
The miners will be officially eliminated
The Ethereum blockchain was started through proof-of-work (PoW) mining. But this mining won’t be here for long.
I entered the times @trent_vanepps .
Let’s get this thing on the road. # eth2 pic.twitter.com/JzzLtA4aiT– wolfofethereum.eth🐬 (@LUKACACIC) October 29, 2020
This is because Ethereum is kicking off its Serenity “ETH2” update at the end of 2020 with the launch of Phase 0. This puts Ethereum in step towards reaching Phase 1.5 at the end of 2021, where the ETH1 blockchain will be immortalized as a single. fragment on the Beacon of ETH2 Catena. At this point, Ethereum mining will finally be finished.
Of course, the Ethereum community is no stranger to development delays, so it’s entirely possible Phase 1.5 will be postponed to 2022. But I’ll go ahead and call it: Ethereum mining dies next year.
BTC on Ethereum reaches 5%
WBTC, renBTC, tBTC, HBTC, etc. – choose your taste, because the tokenized bitcoin projects on Ethereum are officially in vogue.
In fact, users have flocked to ERC-20 BTC implementations this year to use their bitcoin to utilize yield in DeFi like never before. The influx of new users has meant that around 1% of BTC’s total supply now exists as an Ethereum token.
However, this phenomenon is only just beginning. I think tokenized bitcoin projects will continue to see explosive adoption leading to 5% of the existing BTC supply on Ethereum at some point in 2021.
Governance projects double the defense
Governance tokens have come to the fore in DeFi this year. These resources allow holders to collectively decide on protocol decisions in a decentralized way, so they have been increasingly welcomed into the ecosystem in recent months.
The danger here, then, is if the whale voters maliciously influence the votes with huge token stakes. The stakes are now higher with the introduction of flash lending earlier this year, which allows traders to borrow as many tokens as they want if they can borrow and repay the debt in a single transaction. .
This week the MakerDAO Lending Protocol saw a governance vote influenced by a flash loan scheme for the first time ever. That said, I expect the protocols around DeFi to start strengthening against this type of attack vector in 2021.
Increases the tendency to more chains
Ethereum is the dominant financial system in the crypto economy and will be for the foreseeable future. That said, we’re also starting to see trends towards a multi-chain future where projects leverage hybrid infrastructure.
For example, Ethereum’s music streaming app Audius just announced that it will start leveraging the Solana blockchain for parts of its stack. Of course, Audius is still maintaining its core Ethereum-based infrastructure, so this is the kind of hybrid model that I think we’ll see a lot more in the future. Another low-flying fruit is seeing projects go serverless in 2021 by leveraging both Ethereum and Filecoin in combination.
Ethereum staking generates important assets
Staking has already arrived in the crypto economy, but once Ethereum begins its proof-of-stake pivot in ETH2 at the end of 2020, we will see the space staking industry really start like never before. This trend will only generate flows throughout 2021.
New companies will arise. New users will arrive. New innovations will please the throngs of new stakers. You can count on it.
DeFi hackers will get better
DeFi has seen its share of sophisticated attacks this year. But the ecosystem is still in its infancy and blackhats have only begun to think about how to leverage dApps accordingly.
Don’t get me wrong either. I expect that we will see dApps continue to strengthen and become much more defensible against attackers. But that’s because they will have to. And there will be some projects that will fall prey regardless of the good intentions of their mitigation systems.
The all-time volume of the NFT market reaches $ 5 million
Ethereum’s non-fungible token (NFT) industry, which encompasses things like digital art, digital territory, gaming assets, and beyond, began to catch fire in 2020.
In fact, the NFT economy’s all-time USD sales volume passed the $ 100 million mark earlier this year. I think with NFT markets in the spotlight like never before we will continue to see the trend of this sector to the upside. As a result, I think NFTs will collectively reach $ 500 million in all-time USD volumes by the end of 2021.
First $ 1 million NFT sale
Barring the latest forecast, NFT big sales price tags are expected to rise in 2021 as well. Space has not yet seen a $ 1 million NFT sale, but I think next year may be the first time that will happen. . And if it does, it will catalyze a wave of acute interest in space that should only reinforce the fact that NFTs are here to stay. The reality is that big sales lead to big attention and big attention leads to big sales, and the cycle goes on and on.
Conclusion
My 10 predictions here are what I think have a decent to high probability of happening in 2021. I have calibrated these forecasts trying not to underestimate the growth we will see next year because I foresee another boom year and perhaps the undeniable start of a multi-year bullish cycle led by Ethereum. In the meantime, we will have to relax and see what happens, but I think if you sleep on Ethereum in 2021 then you are on the wrong track.
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