The early cryptoeconomy is the house that bitcoin built, and the space grew rapidly in 10 years. As the arena enters its second decade, it’s Ethereum that’s taking the baton and is poised to usher in a new era of unprecedented activities around cryptocurrencies.
Yet the million-gwei question now is: how exactly will all the coming crypto bustle unfold?
Of course, it’s hard enough to guess what will happen tomorrow in the cryptoeconomy, much less what will happen years on from today. But there are certain macro trends already coming to the fore that can give us clues as to what the future of crypto holds. In today’s post, we’re going to draw some of these trends out to imagine, both analytically and for fun, what the cryptoeconomy may look like circa 2030.
Optimized Ethereum on the World Stage
In our hypothetical 2030, Ethereum 2.0 has already been around for years and offers users around the globe the full promise of Ethereum’s original vision: a superior platform for open applications and payments.
Ethereum’s early community, development, and DeFi moats ensures the project is still safely the cryptoeconomy’s top smart contract platform, though other smart contract projects are still around and popular in different regions for different reasons. Interoperability reigns, though many chains are effectively sidechains with Ethereum serving as a central activity hub.
At this point, Ethereum’s scaling pillars, like sharding and layer-two sidechains, make it so the platform easily powers more throughput than mainstream giants like Mastercard and Visa. Moreover, this scaling tech will also make it so it’s cheaper and faster to transact on Ethereum than basically all traditional alternatives.
DEXes Go Mainstream
Decentralized trading projects like Uniswap have been having breakout success in 2020, and it’s no mystery why: users like to be able to access new assets permissionlessly and trustlessly around the clock, all without needing to sign up for an account.
I see the popularity of these trading protocols only continuing to ramp up from here precisely because of their open and free nature.
That’s why one of the most obvious predictions for 2030 is that DEXes will be vastly more ingrained in mainstream society and their crypto-centric complexities abstracted away by then. These solutions will go from bright stars in a rising niche ecosystem to a new paradigm for global finance, period. It’s already happening now.
The ERC20 BTC Exodus Is Significant
Tokenizing bitcoin as Ethereum-based ERC20 tokens has exploded in popularity this year and in no small part thanks to the multiplying prospects for putting these tokens to productive use in DeFi.
That said, at the time of this post’s writing there were 68,500 BTC tokenized on Ethereum, i.e. 0.326% of the total 21 million BTC supply. By the time 2030 rolls around, I predict a major spike so that more than 33% of that supply living on Ethereum, i.e. +6.9 million BTC.
In this sense, it may end up that none other than Ethereum becomes BTC’s de facto scaling solution. That possibility may rankle some bitcoiners in the here and now, but over time I suspect more and more users won’t care — the relationship will just work.
Stablecoins Are Hits
The current market cap of all stablecoins combined is +$17.5 billion. This market cap will be decidedly over $1 trillion by 2030.
Why? Stablecoins can be saved and put to use via crypto-native earning opportunities, e.g. liquidity providing or lending, in ways that ordinary fiat can’t.
Additionally, stablecoins will only continue to give rise to, and complement, central bank digital currency (CBDC) efforts. Over time, the lines between fiat-pegged tokens and CBDCs will continue to blur, except in the case of truly decentralized currencies like MakerDAO’s Dai stablecoin.
NFTs Become a Multi-Billion Dollar Market
Non-fungible tokens, or NFTs, are a popular rising use case on Ethereum that can be used to provide unparalleled provenance over digital assets like art, collectibles, gaming pieces, tickets, and more.
Moreover, since these assets are digital tokens on Ethereum, they can be programmed and extended to in essentially limitless ways.
DeFi : Money Legos
NFTs : Media Legos
— Jesse Walden (@jessewldn) September 3, 2020
In 2020, the NFT economy hit its first $100 million in total sales. Yet as these assets continue to pave the way to new kinds of creative economies, sales will only continue to climb. Look for the NFT market to be powering billions of dollars of sales by 2030 accordingly.
DAOs Become Significant Forces
Decentralized autonomous organizations, or DAOs, saw a resurgence in the Ethereum community in 2019 and then started really blooming in 2020.
These digital, democratic, and transnational co-operatives offer a new paradigm for organizing communities online, and we’re going to see lots more of them — small, medium, and large — in the years ahead.
And across the board will be touched, as there will be venture DAOs, esports DAOs, lobbying DAOs, social DAOs, and so on. Basically if you can imagine any kind of group now, someone will likely have DAO-ed it, or something akin to it, by 2030.
Social Money No Longer an Experiment
Social money, or personal tokens, are one of the newer sectors to rise atop Ethereum. They can represent income sharing agreements (ISAs), community currencies, the memetic value of a creators’ brands or content, all of the above, or something else entirely.
We’ve already seen dozens of personal tokens start to take flight through social money platforms like Roll, e.g. the entrepreneur Alex Masmejean’s $ALEX token. Expect this trend to continue to the point that it’s a normal and mainstream thing to invest in “people” as part of a regular portfolio circa 2030.
DeFi Is Now Just … Finance
Ethereum users call the decentralized finance arena “DeFi” because it’s novel and works completely differently to traditional finance. But this distinction will decrease over time.
Why? Because the crypto-native earning opportunities in DeFi are going to grow and attract so many users that in the future many DeFi activities will become fundamental and typical elements of personal finance.
By 2030, swathes of users ranging from consumers to large institutions are managing non-trivial parts of their finance through DeFi platforms. And by this point, all of the UX problems that plagued these young platforms are long gone.
Crypto Privacy Is Considerably Enhanced
One of the biggest early problems with popular public blockchains like Bitcoin and Ethereum was there lack of satisfactory privacy solutions.
Yet this problem will certainly be a thing of the past in 2030. At that point, mixer tools and projects based on zero-knowledge proofs (ZKPs) will be widely adopted atop Ethereum and beyond, meaning privacy will be the space’s default in the future and not opt-in (like how things generally are now).
Indeed, crypto users in 2030 will look back on users today and be flabbergasted by the level of privacy they enjoy compared to us.
The contemporary cryptoeconomy’s top projects hold within them incredible promise. And, while things are still early for now, all that they’ve been able to achieve to date gives lots of reasons to be optimistic that they will reach and help billions of users going forward.
Of course, there will be ups and downs along the way, just as the cryptoeconomy has seen its share of market cycles already. But all the recent advancements around scaling and DeFi make it seem like a tipping point has been reached, and that it’s all but inevitable that mainstream adoption will be reached. My guess is that mark will be handily achieved within the next decade.