The cryptocurrency industry has experienced no shortage of big ups and and big downs in recent years. With the next one now just around the corner, it’s a sure bet 2020 will bring its fair share of intrigue to the space, too.
And while the future is ever inscrutable, one can already make some educated guesses about trends in the ecosystem that only seem set to continue blossoming over the next 12 months and beyond. Namely, these trends are 1) growing use of decentralized exchanges, 2) increased proliferation of DAOs, and 3) more adoption of DeFi solutions.
Projects that facilitate one or more of these trends, particularly Ethereum as the arena’s reigning smart contract platform, stand poised to gain from ensuing network effects in kind.
DEX Volumes Spike, More Traders May Transition
Decentralized exchanges may be a fledgling innovation, but some of the space’s most prominent ones have started coming into their own over the last year — especially where user experience (UX) around non-custodial trading is concerned.
Accordingly, the popularity of DEXes has been rising. In recent days, that dynamic has been illustrated by the fact that volume on Ethereum community favorites like Uniswap and Kyber Network has been notably uptrending.
For example, last week the Uniswap team reported that its DEX had achieved a new record for daily trading volume on the heels of $7.9 million USD worth of crypto being exchanged on the platform in a single day.
And decentralized exchanges are continuing to technically evolve and advance all the while, so their best days seem yet ahead. Continuing to focus on Uniswap as an example, the platform’s coming v2 upgrade will forge it into a decentralized price oracle that will further entrench the DEX’s position as a majorly useful “money lego” within the wider DeFi scene.
The project’s backers are also at the forefront of testing the new “optimistic rollups” innovation that could make DEXes and beyond that much more useful — testing that offers a glimpse into the near future.
— Hayden Adams 🦄 (@haydenzadams) November 23, 2019
With all that said, DEXes in general — though especially the top ones — appear poised to win over more trading volume in 2020.
DAO Efforts Only Just Starting
Decentralized autonomous organizations are not a new thing in the cryptoverse, but the launch of grassroots Ethereum development funding group MolochDAO earlier this year spiked a resurgence of DAOs that’s looking like the beginnings of a kind of Cambrian explosion.
Indeed, in the wake of MolochDAO has arrived a whole slew of similarly inspired experimental organizations, including groups like YangDAO, MetaCartel, Trojan DAO, Marketing DAO, and Stake DAO. All are focused on different things, and all of them are only the firsts of many more to come.
These groups and their underlying tech open up news kinds of coordination that have never been possible before. Look for more experimenters to take up DAOs in 2020 accordingly.
DeFi March to Continue
Decentralized finance, or DeFi, was as ascendant meme in the cryptoeconomy in 2019, but that wasn’t without good reason.
DeFi projects may be fledgling, of course. But the top solutions have already advanced far enough as of this year that the biggest ones seem inevitably poised for more widespread adoption, to say nothing of the many more DeFi “money legos” yet to be devised and built out.
Maker just launched Multi-Collateral Dai (MCD), part of the project’s bid to make the Dai stablecoin a mainstream, DeFi-powered global currency. The other biggest crypto lending dApp, Compound, just raised a war chest of $25 million to help bring its services to everyday users.
These projects and other related ones in the arena aren’t planning on slowing down any time soon. As such, DeFi should become an even bigger factor next year.