There is a revolution happening in the financial world, an unbanked revolution.
Born out of this revolution, Bankless is part newsletter and part dynamic guide, keeping you updated on a weekly basis with the latest news from the world of open finance.The following is Bankless and its manager's predictions about the encrypted world in 2021, covering Bitcoin, Ethereum, DeFi, stable coins, NFT...ETH will cross the top and hit $2,500.Cryptocurrencies will become a multi-trillion dollar asset class. The total market capitalization of cryptocurrencies has just reached $1 trillion and will remain at this level in 2021 and far exceed it.The settlement value of Ethereum will exceed $3 trillion. In 2020, the Ethereum network is expected to settle over $1 trillion in value. In 2021, we expect more dollars, bitcoin, and capital inflows to the network than ever before.At least two DeFi protocols will reach the top 10 by market capitalization. Some of the assets in the top 10 are dumb (we won't name names...XRP). We think they will be replaced by DeFi assets, which have actually gained considerable valuation. Possible top ten candidates include: AAVE, UNI, YFI, COMP, SNX, MKR.The total market value of DeFi will exceed $100 billion. At present, it is only 28 billion US dollars. It's so low, it's ridiculous. Protocol upgrades, product improvements, and new protocol rollouts over the next year...$100 billion is what we think is the bottom line.There will be more than 2.5% of the total supply of BTC on the Ethereum network. By the end of this year, the number of BTC on Ethereum will reach 420,000, which is currently 160,000. The high yield and utility of the Ethereum economy will lead to an increasing number of new ecosystem participants who prefer to use BTC on Ethereum.Coinbase's IPO valuation will exceed $100 billion. This is largely driven by the huge winds behind the crypto asset mania, compare TSLA.
Ryan
The market value of stablecoins exceeds 250 billion. There are three growth engines here. First, DeFi protocols with collateralized coins and unsecured coins. Second, crypto banks with stablecoins like USDC and GUSD. Third, traditional banks will enter the game. These three engines will make the market value of stablecoins reach 250 billion US dollars.EIP1559 is implemented and ETH is started to be burned. With the efforts of Tim Beiko and others, we finally see the impetus to implement EIP1559, the scarcity engine of the Ethereum network, the final piece of the puzzle for ETH monetary policy. It means the protocol will start burning ETH with every transaction.ETH "Internet Bond" identity confirmed. Institutional investors will watch the price of Ethereum rise with curiosity. Some people will participate, and then after the launch of ETH futures, more people will participate. When they do, they upgrade their narrative to justify their ETH staking. They will describe the betting ETH as Internet bonds, just as they describe BTC as digital gold. Expect a Forbes or Bloomberg article to use that statement, maybe a Paul Tudor Jones type of guy to say it on CNBC.Central banks will buy Bitcoin. Either they're doing it in secret and we'll find out about it, or they're going to announce it for political ends.You will receive various consultation text messages. We’re going to get into 2017-like retail FOMO where friends and family who know you like crypto are asking you for advice, guide them well.
David
At least one unsecured/algorithmic stablecoin will have a market cap of $1 billion. And staying above that level in the first half of 2021, the unsecured stablecoin will become stable enough to eventually be included in Curve.At least one uncollateralized/algorithmic USD stablecoin would also explode and enter a death spiral.Tokenization of real-world assets will continue to underperform. We have yet to find an effective legal process to do this. This will be a boon for native assets on Ethereum, as there is less competition for capital and they are easier to create.Ethereum’s yield in USD will remain >10% APY for most of the year. At some point, they might even top 30% during periods of volatility. As yields in traditional markets continue to dry up, the availability of those yields to anyone will be one of the key drivers of interest in Ethereum.At least one major game studio will announce their intention to integrate some components of Ethereum within the game for NFT asset integration. Layer 2 rollout provides the infrastructure for tradable game assets with the latency speed needed to deliver a compelling gaming experience.None of the L1 versions of the following protocols will suffer from hacks, bugs, or loss of user funds due to protocol design errors. Qualified candidate protocols here include Maker, Aave, Compound, Synthetix, Uniswap. Note that questionable ERC20 tokens from third-party teams do not count!Yearn will lose some users' funds due to a wrong strategy.USDC will come close to competing with Tether (USDT) in total USD supply. Tether will face strong regulatory headwinds, which will benefit USDC's growth.Stablecoin supply for all other non-Ethereum blockchains will be a later story. Almost all of the crypto stablecoin supply will be on Ethereum. There is almost no way to use it elsewhere.Tron will go the same way as XRP, either way. Maybe regulators will take action and start kneeling.There will be an unsustainable social token mania. Celebrities and influencers will mint tokens named after themselves and airdrop them to fans, and they'll have ludicrous market caps.There will be no important new Layer1 (public chain) launch, so I won’t say much here.There will be significant hype surrounding decentralized blockchain service providers. This may be premature as they won't really matter until ETH 1 and ETH 2 merge, which won't happen in 2021.Interacting with Ethereum and DeFi on the desktop will lose its dominance in favor of mobile as newcomers to the ecosystem are less inclined to use PCs and more accustomed to the mobile environment.Desktop DeFi usage will continue to be dominated by MetaMask. MetaMask’s dominance will only be diminished by growing mobile DeFi usage, not by competing desktop apps.Discord will become the dominant platform for discussing crypto, dethroning Telegram (thank God).
Lucas
The annualized transaction volume of Uniswap will reach 1 trillion US dollars. The daily transaction volume of the protocol is already close to 1 billion US dollars, which means that the daily transaction volume only needs to reach 3 billion US dollars. With the current growth rate and the upcoming V3 upgrade, this goal is not difficult.The value of encrypted art sales will exceed $1 billion. For reference, digital art from major platforms trades around $24 million per year (excluding Nifty Gateway), which is not enough. The digitization of this asset class has resulted in much higher liquidity than ever before. Ownership can now be transferred instantly to anyone, anywhere, anytime. Just as importantly, the breadth of digital art is much wider. A piece of art can have not only visual aspects but also audio. What if the NFT was the cover of Taylor Swift's new album, while playing the title song from the album? What price will it sell for? Once a handful of popular creators realize the potential, the stories write themselves.There will be a DAO-like black swan event. Smart contract auditing firms are completely crowded right now. We're talking months before you can get an audit arranged by any reputable company. It sucks to say it, but mistakes are more likely to happen in this case, and one of those mistakes will be costly. Hope it's not ETH2.0...sorry.The market value of DPI (DeFi Pulse Index) exceeded 1 billion US dollars. The index industry is starting to take shape, and the DPI of index cooperatives has only been around for a few months, most of which in the DeFi bear market. This will be the asset of choice for new crypto investors entering DeFi. All DPI needs to do is acquire enough liquidity for major exchanges like Coinbase and Binance to list it. Once that happens, it should be enough to propel DPI into unicorn status through (1) increased liquidity and (2) price increases in the underlying assets of the index (another DeFi bull cycle).Retrospective dividends will be a highly profitable source. There are many projects that can be tokenized. And the retroactive allocation of past users of the protocol has become an industry standard. I wouldn't be surprised if more untokenized projects launch their native tokens next year and allocate a significant percentage of the supply to historical users. And that doesn't include new projects looking to reap some benefits (think Mirror and Badger), or even existing tokenized projects looking to reward past users for doing a particular action in the past (reward migration to L2 users, or once migrated to V2, etc., the project rewards V1 users).DeFi derivatives will thrive. In 2019, we had stablecoins and lending; in 2020, we had AMMs; in 2021, we will see the derivatives space finally take off. We have reached the point where mainnet finally has a robust ecosystem of derivatives protocols. Highlights include: Synthetix and UMA for synthetic assets, Hegic and Opyn for options, FutureSwap, dYdX and Perpetual Protocol, and others for leveraged trading products. My guess is that we will eventually see these protocols start cannibalizing the $400 billion derivatives market.
