Andrew Keys: 16 Ethereum Predictions From a Crypto Oracle


Every year since 2016, I’ve made predictions about what the next year will bring for the industry. If you pay attention to the incremental changes that occur year after year, you will see that everything is interconnected and you can predict some exciting results. 2021 will undoubtedly be a year where blockchain and crypto take center stage economically, politically and socially. I see this coming.

This post is part of CoinDesk’s 2020 Year in Review – a collection of posts, essays, and interviews about the year in Crypto and beyond. Andrew Keys is a Managing Partner at Digital Asset Risk Management Advisors and co-founder of LiquidStake, a solution to the Ethereum 2.0 liquidity problem. Prior to that, Keys was Head of Global Business Development at ConsenSys.

1. In 2020, the world began to understand the intrinsic value of Bitcoin as “digital gold”. In 2021 we will see the same understanding of Ethereum as “digital oil”.

In the next year, Ethereum will cement its place as the future substrate of the global digital economy through the conclusion of the worldwide contracts.

Contracts are the connective tissue of the world – sales contracts, college admissions, job vacancies, insurance policies, medical prescriptions, NDAs, ISDA agreements, etc. Yes, the earth has contracts (not dunkin ‘). With Ethereum, contracts can really be digitized. The digitization of the contract is the digitization of the global economy, valued at an estimated $ 270 trillion (compared to the $ 18 trillion market cap for gold that Bitcoin can track). Ethereum has the ability to improve entire economies, not just one asset class.

2. Ethereum 2.0 Phase 1 is being carried out successfully.

On December 1st, the Ethereum community successfully started phase 0 of Ethereum 2.0. By upgrading the network from proof-of-work to proof-of-stake, Ethereum is scaled and executed faster with less computing power. Phase 1 of Ethereum 2.0 will go live in 2021 and will dramatically improve scalability.

3. Bitcoin hits $ 50,000.

Bitcoin has a unique use case with a limited supply. As more institutional investors buy Bitcoin, the price will rise to $ 50,000.

The Eth 2.0 upgrade will catapult the power of the network and attract even more attention from corporations and institutional investors, propelling the price of the etheric currency to new levels.

5. The total number of DeFi banned will exceed US $ 150 billion, and 2021 will be the year of the DeFi cross chain bridges.

It cannot be denied that the majority of the decentralized financial activity takes place in Ethereum. However, other networks will invade space in more material ways, incorporating other native tokens into Ethereum’s DeFi ecosystem. With the increasing popularity of the various token bitcoin options (tBTC, ren, wBTC), Bitcoin’s market capitalization of USD 430 billion is secured in DeFi. This will increase the TVL exponentially in DeFi.

See Also: Why The DeFi Pulse Key Metric Is So Simple As To Be Confusing

6. As Web 3.0 gains traction, the value increases in the protocol layers rather than in the application layers.

In Web 2.0, most of the value lies in the application layer of the stack. The world’s largest internet company is not the company that manages the HTTP protocol, but the company that brings the most valuable and anchored experience to the end user. In Web 3.0, the application layer will become smaller and we will find that the protocol infrastructure is most beneficial.

In 2021, Ethereum will further consolidate its position as the leading Layer 1 blockchain. As with any technology stack, there are many layers that make up an application. With Ethereum as the base layer, we will see an explosion of Layer 2 solutions that add unique features to the Ethereum mainnet: scalability, data protection, interoperability and more.

DeFi has grown exponentially on Ethereum, which has resulted in an increase in gas fees and a slowdown in transactions. Advances in Layer 2 technologies offer a scaling solution for all microtransactions that are not required on the mainnet. So 2021 will be a breakthrough year for projects like ZK Rollups and Optimism (greetings to Jinglan Wang), as more and more dapps resort to Layer 2 solutions such as government channels to increase transaction throughput to 100 to 2,000 transactions per second (TPS). to increase).

8. IPFS and Filecoin come into global focus.

In 2016, IBM stated that 90% of the world’s data was created in the last two years alone. That was four years ago when the world generated 2.5 trillion bytes of files. Every internet-connected device on earth – smartphones, smart TVs, computers, cars – generates data. As the amount of data generated increases exponentially from year to year, the need for storage that is cheap, accessible, and without permission also increases. The options we have for data storage today are in stark contrast to the needs of tomorrow, and businesses and consumers will begin to understand the limitations of existing solutions.

Enter IPFS and Filecoin. IPFS and Filecoin are complementary Layer 1 protocols that work together to provide decentralized storage. Since the start of the main network in October, the Filecoin storage has exceeded 1 exbibyte of capacity (that’s a huge amount). Bridges between Ethereum, IFPS and Filecoin are already underway, and in 2021, entire workflows – from agreements and transactions to storing and sharing data – will be carried out using decentralized protocols.

9. ‘Ethereum killers’ must find a niche or be slaughtered.

For years, various layer 1 blockchains have been marketing themselves as “Ethereum killers”. Many have promised a faster, more sophisticated smart contract platform that has little to show for. In 2021, those who have made millions on the promise of capturing Ethereum’s market share will have to work out a niche use case for their platforms or they run the risk of becoming irrelevant before code is shipped. Ethereum’s dominance is akin to Google’s share of the search, and other protocols add to this hegemonic position by building cross-chain bridges as one of their first integrations. These Layer 1s are likely to gain momentum for certain use cases or technological preferences, e.g. B. NEAR for games or Dfinity when using WebAssembly instead of Solidity.

Ethereum could lose a small percentage of the projects, but even if new open source ecosystems emerge around these other protocols, all roads will lead back to Ethereum as the base settlement layer.

10. We are going to see the beginning of the Crypto IPO madness.

BlockFi, Celsius and Coinbase (it’s already happening!) Will apply for an IPO. Within a year, Coinbase’s valuation will increase by over $ 40 billion. These companies should mark some aspect of the IPO and implement digital security, as many of them built their success on the promise to usurp the very systems they are about to join.

11. China will go live with its electronic payment in digital currency (DCEP)..

Tens of thousands of people have already tried the new digital currency, and the rollout will continue until the 2022 Olympics. An international financial center like Singapore, Switzerland or Hong Kong will be the second country to issue a CBDC.

12. The US will continue to delay its work on a CBDC as a dozen other countries steadfastly seek digital currency.

Paralyzed by the COVID-19 pandemic and a tumultuous presidential election cycle, the US will spend much of 2021 grappling with the economic impact of the pandemic. The impulses continue to be distributed slowly and in an analogue manner, even as the use case for a government-issued digital currency becomes increasingly clear.

13. We will see the first areas of a significant takeover of companies in public blockchains.

Led by industry pioneers such as Microsoft’s Yorke Rhodes, EY’s Paul Brody, and ConsenSys’s John Wolpert, the open source baseline protocol uses the public Ethereum mainnet to communicate with corporate blockchains using peer-to-peer messaging and knowledge-free cryptography to connect to the Ethereum public network.

14. NFTs are becoming the leading use case for Ethereum among consumers.

In November, the record for the highest value non-fungible token (NFT) for a medieval interpretation by Vitalik Buterin was set at approximately $ 141,536.20. That record was broken just a few days later. NFTs have long been touted as a promising solution to counterfeit goods. In 2021 we will see the popularization of NFTs as a digital representation of unique merchandise, from art to music to collectibles. Innovators like SuperRare and Sorare will be leaders in their respective industries. Children will trade NFTs from European Football League stars the same way children used to trade baseball cards.

15. Crypto VC explodes.

Venture capital investments in Web 3.0 and crypto companies have grown steadily over the past five years, but 2021 will be a breakout year catalyzed by the next generation of crypto VCs. Consider the 100-person Silicon Valley VC, where some people specialize in blockchain technology. These individuals will leave their big companies, raise their own $ 50 million, and firmly establish the next generation of crypto VCs.

16. The largest futures exchange in the world.

In February 2021, the Chicago Mercantile Exchange, the world’s largest futures exchange, will launch Ethereum futures. This makes Ethereum the second crypto commodity registered by the Commodity Futures Trading Commission. This will pave the way for an Ethereum exchange-traded fund (although it was previously a slog for Bitcoin).

See also: Ajit Tripathi – Why I’m Long Crypto, Short DLT