With Ethereum 2.0 almost upon us and final preparations for the launch almost underway, Twitter user Croissant gave followers a peek at some developments that could provide ETH a much-needed push over the next couple of years. These are listed in no chronological order.
The Advent Of NFTs
While NFTs are at a very nascent stage, they are reminiscent of how DeFi was when it was up and coming. NFTs have already created a significant buzz in the crypto space and the digital collectibles market. To give you an idea of the frenzy around NFTs, a piece of digital art created by the artist Beeple was sold at an auction for $69 Million.
Billionaires like Elon Musk have also helped push NFTs into the mainstream, and this is just the beginning. Currently, there are thousands of Devs and multinational companies that are building their own NFT platforms. Companies like GameStop, Nvidia, and Twitter have all held discussions in implementing NFTs in some form.
EIP-1559 or Ethereum Improvement Proposal 1559 will simplify Ethereum’s free-market mechanism and change its monetary policy. EIP-1559 is one of the most important proposals in the history of Ethereum.
The proposal will make gas fees more stable and predictable, and the increase in transactions and the UX upgrade will transform ETH into a deflationary asset.
Low Exchange Supply
The ETH supply on cryptocurrency exchanges is currently at a three-year low, with this trend being the dominant trend for the past few years. With upcoming developments such as the EIP-1559 deflation, this trend of low supply is expected to continue.
Growth Of Smart Contracts
Ethereum is front and center when it comes to smart contracts, and at present, 26% of the total ETH is locked in smart contracts on various decentralized applications (dApps) on the network. The total valuation of ETH currently locked on the network is over $57 Billion, up 15% since the beginning of the year.
As more and more protocols are created that require ETH, the rate and amount of ETH locked in smart contracts is bound to increase.
Synthetics give users access to markets that are free of censorship, centralization, and regulation. ETH gives investors access to a wide variety of markets, which otherwise they would not be able to access.
Tokenization And Zero-Knowledge Proofs
Tokenization is one of the biggest use cases of Ethereum, more so with the advent of NFTs. With tokenization, any asset can be represented on the Ethereum network with ease.
Another promising scaling solution for ETH is zero-knowledge proofs, with an EVM compatible rollout expected in August. The rollout will increase security on the network allowing it to scale up to 10,000 transactions per second.
Several projects with the sole focus of taking Ethereum to the next level when it comes to scaling have been created or are in the process of being created. Compared to the current transactions per second, these solutions offer the capacity of processing 100,000 transactions per second when combined with sharding.
Shift To Proof-of-Stake
Proof-of-Stake will require validators to stake their ETH, allowing them to earn greater rewards when they lock up their token. The shift to PoS will also see less energy consumption and faster transaction speeds.
At present, several teams are working on PoS blockchains to unlock their potential. Ethereum smart contracts will be used by the billions through interchain accounts and interoperable liquid staking derivatives.
Smart Contract Wallets
Smart contract wallets are maintained by code instead of private keys and will allow users access to several features such as gasless transactions, multi sig, and more.
Sharding will split the Ethereum network into individual shards, allowing it to store even more data. It will also increase transaction speeds drastically.
The Triple-Halving Event
Thanks to changes such as the shift to Proof-of-Stake, low liquidity, and deflation, Ethereum will undergo a supply shock that is equal to three BTC halving events.
Ethereum has already set itself up as the go-to option for DeFi. In the future, protocols will offload smart contract capabilities to Ethereum, reaping the benefits of a more efficient ecosystem.
Currently, Ethereum has the largest number of developers on the blockchain. In fact, since 2019, Ethereum has been adding 300 more developers every month. We also see a growth in institutional interest in Ethereum.
Ethereum currently has over 3000 decentralized applications and 200,000 ERC-20 token standards. Over 90 of the top 100 crypto projects are based on Ethereum.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.