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Another new year has begun. As usual, after writing the year-end summary of 2020, we should look forward to the world of cryptocurrency in 2021 and see what is worth paying attention to. 01
BTC There is no way, not only in summary but also in outlook, the first person to be mentioned has to be him. In the last one or two months of 2020, BTC has proved with practical actions that smart contracts, mainstream, copycat, BCH, BSV, are all inferior. Therefore, readers who do not have BTC in their hands are facing a very embarrassing situation at the beginning of 2021 - if you buy it, you will not buy BTC at more than 3,000 last year, and it is too hard to buy BTC at 30,000 this year. If you do not buy it, the institutional bull market in 2021 is basically clear, and a group of analysts all see 50,000 to 100,000 US dollars, or even higher. The messy tokens you have may not be able to outperform BTC. If you ask me what to do, to be honest, I don't know. I can only say that if you have cake in your hand, don't be easily deceived and get off the train. If you don't have cake, consider buying some when you encounter a big callback. If you don't encounter it, it depends on whether you are brave enough to rush in. As a well-known influencer said, this Bitcoin bull market may be different from the past. It is a "clear bull market from the West" . All financial report information is open and transparent, and all institutional wallet addresses are available. In a theme video at the end of 2020, the Wall Street Journal even shouted "That's made Bitcoin essentially a hedge against the dollar". So perhaps the 35% or more retracement in the previous two bull markets may no longer exist. The deep squat of more than 80% plunge in Bitcoin at the end of the previous two bull markets may no longer exist. The opening of the institutional bull market may be the same as the opening of gold through ETFs, which starts slowly and is a long-term but stable slow bull market. In 2021, whether your asset portfolio or a series of operations can outperform the full-position BTC hoarding is still an indelible "shadow" in the minds of every player in the circle. All in all, in 2021, hold on to the big pie in your hands! 02
ETH and DeFi If BTC is the winner in 2020, all cryptocurrencies will surrender to it. ETH’s 2020 brought all the “Ethereum killers” to their knees and turned them into “Ethereum friends.” Simply put, look at the prices of those public chains that are incompatible with ETH, especially the older generation of EOS, TRX, Quantum Chain, and IOST, which were once known as Ethereum killers, throughout 2020, and you will understand. The new generation of several star public chains: Polkadot, Near, Solana, will all be compatible with Ethereum EVM through Bridge. What’s even more exaggerated is that Binance Smart Chain BSC and Huobi’s upcoming public chain have both tried their own solutions. Binance started using Cosmos SDK, and Huobi cooperated with Nervos. In the end, they all chose to fork Ethereum. The wallet can directly use Metamask, the browser is exactly the same as Etherscan, the price query of tokens and Uniswap info is also 100% replicated, and DApp migration only requires a slight change in code... I saw a statement from a big V: “For any country to achieve financial modernization, it basically has to achieve the following: 1. A central bank (like the Federal Reserve); 2. Commercial banks; 3. Stock exchanges; 4. Electronic payments (like our UnionPay, credit cards, and Alipay, etc.).
Each blockchain has realized decentralized electronic payment. But only Ethereum has replicated a decentralized central bank (MakerDao), a decentralized commercial bank (Compound), and a decentralized stock exchange (uniswap).
Most chains now only have the functions of local currency and transfer, and there are few chains that can even issue tokens (i.e. securities), not to mention the central banks that will come later.” The popularity of DeFi this year has allowed ETH to find a completely different narrative from ICO in 2017. Although the price is only half of the high point in 2017, both the number of on-chain assets and the contract call data have increased exponentially compared to 2017. The bubble brought by ICO has been basically eliminated, and ETH is moving forward steadily step by step. Regarding ETH, there are two points that need to be paid attention to in 2021: 1. Rollup - Vitalik Buterin has basically decided that the original sharding plan of ETH2.0 will be "indefinitely shelved" and Rollup will be used for capacity expansion. 2. EIP1559 - There has always been a dream in the industry that there is a token that can dethrone BTC from the throne of the largest market value. At present, if there is a project that can succeed, it is most likely to be ETH. After all, the imagination brought by smart contracts will exceed value storage in the long run. However, despite the explosion of DeFi this year, the price growth of ETH seems slow. The fundamental reason is that ETH is too weak in capturing the value of the DeFi ecosystem, and ETH itself lacks the function of storing value. EIP1559 has been introduced in many articles before, so I will not repeat it again. In 2021, if we can see the implementation of EIP1559, I believe the price of ETH may soar again. As for DeFi, the previous article "Summary of the 2020 "DeFi Carnival", what is the new direction for the next year?" has already said too much. It is foreseeable that DeFi in 2021 will continue to evolve from the current 6th generation products, including fixed-rate lending, derivatives based on Rebase and Layer 2, etc. We will see more "blockchain-based" projects in the traditional financial circle, especially Internet finance, and more new DeFi projects that are purely crypto-native, and the latter is undoubtedly more worth looking forward to. 03
Layer 2 and New Public Chains Layer 2 has been in use for three years since 2017, and it still has no effect. Whether it is channels, side chains, or Plasma, you can hardly touch them in the world of DeFi. The only "large-scale application" is the domestically-produced Loopring, which is liked by Vitalik Twitter every day. However, it is useless. Look at the double-digit daily active users of LRC DEX, and the expensive and slow Uniswap next door but with five-digit daily active users. You can only sigh... The biggest problem with Layer 2 is that each company is fighting on its own, which is extremely chaotic . The technical features of each expansion plan are different, and even if the technical features are the same, there are various subcategories. For example, Rollup has Zk-Rollup, OPtimistic Rollup, and Validium. Under each subcategory, there are several different companies developing their own... The new public chain is essentially the same as Layer 2. Before its own ecosystem is established, it can only be a "friend of Ethereum" and use itself as an Ethereum side chain. Only when it has enough users, enough developers, and enough projects can it slowly get rid of the Ethereum ecosystem. In 2021, it is hard to imagine that DeFi will continue to operate with transaction fees of more than ten or dozens of dollars. The solution of Layer 2 or a new public chain is imminent. There is no hope for Layer 2 interoperability in 2021, so the dominance of 1-2 solutions may be the most likely scenario. Among them, there are several solutions worth looking forward to. 1. Near’s Rainbow Bridge - After ETH2.0 abandoned sharding, Near can be said to be the leader in sharding technology. 2. Polkadot bridges ETH - There may be no one in the world who understands ETH better than Gavin Wood. 3. Uniswap V3 and AC Empire - When Layer 2 is temporarily unable to communicate with each other, the voice of DeFi core projects in Layer 2 solutions will gradually become more prominent. The two largest forces in DeFi at present are undoubtedly Uniswap and the DeFi Empire created by AC. Uniswap V3 and the Layer 2 solution used by the AC Empire in the future are likely to be important chips in determining the direction of ETH Layer 2. Among the new public chains, Polkadot's parachain auction and Polkadot's native ecological projects have been launched one after another, which must be one of the highlights that cannot be missed in 2021. Polkadot can be said to be the only new public chain that acts as a "friend of ETH" and has never given up and is qualified to be called an "ETH killer". Another new public chain worth paying attention to is undoubtedly Dfinity . In today's world where DApp is ignored and DeFi is popular, the original dream of ETH, the world computer, may be realized by Dfinity. At the previous Dfinity press conference, the team demonstrated the "decentralized TikTok" open source software CanCan, which only used less than 1,000 lines of code. It was really shocking. We look forward to Dfinity bringing a completely different experience to the world of DApp. 04
Algorithmic Stablecoins A few weeks ago, I wrote an article titled "In the endless rapid evolution of DeFi, are the skyrocketing algorithmic stablecoins just a carnival for a few people?" which gave a detailed introduction to the current popular generations of algorithmic stablecoins. Readers who have read that article and studied it carefully should have reaped great rewards in the past two weeks, especially those who participated in Basis and its imitations. The myth of 10 times a week and 10 times a day has long been spread in various groups. What’s even more exaggerated is that algorithmic stablecoins such as Basis and ESD, while enjoying price increases, will also receive dividends every day as long as the price remains above $1. There is an investor in the circle who bought nearly 1,000 BAS at a low price. In recent days, he wakes up every day to tens of thousands of dollars in Rebase deposits. He has been teased by everyone and has become a “waste man”. On the bright side, algorithmic stablecoins may be the "holy grail" of the crypto world . It can even be said that a successful algorithmic stablecoin will be more in line with the vision of a "peer-to-peer electronic cash system" outlined in the Bitcoin white paper than BTC. Especially with the SEC's recent allegations that USDT may be defined as a "security" and the current limited scale of DAI, the crypto world is eager to have a "pure crypto-native" and freely scalable stablecoin that is not collateralized by traditional assets or crypto assets. From a negative perspective, algorithmic stablecoins may be another wave of speculation . Many Basis imitations have a daily return of 20 to 30 points in liquidity mining, and the annual return is usually several thousand or even tens of thousands. Even the Basis master disk, the recent stable daily return of the BAC-DAI mining pool is 2-3 points, and the BAS Boardroom dividend is stable at around 10 points per day, not to mention the nearly 10-fold increase of BAS itself in two weeks... At the same time, all algorithmic stablecoins on the market, from AMPL to ESD to BASIS, have not yet found a use case as a "stablecoin". They are more of a speculative product that participates in the game of human nature. Of course, strictly speaking, BTC actually went through the same process in its earliest days. Therefore, in 2021, which algorithmic stablecoin can find a "out-of-circle" use case, be adopted by various DeFi protocols, achieve a market value of more than 1 billion, have massive liquidity, and gain the greatest user consensus are all "major events in the circle" that are definitely worth looking forward to. 05
Middleware, NFT, Storage, Privacy Middleware , Link, GRT, and KP3R may be the best representatives. Link Needless to say, in 2020, everyone knows the importance of oracles to the blockchain industry. GRT meets the huge demand of the Web3 builder community to query local information on the ETH blockchain in a fast and usable format. Kp3R is a work platform that helps developers create "continuous state machines", a new field that targets the natural flaws of smart contracts. In 2021, we will most likely see more of these tools and modular components. As blockchain middleware, these components often have great potential, because once they are widely adopted, they are equivalent to huge business support . Link's 100-fold growth in the past two years and GRT's several-fold return on investment after its opening are believed to be still vivid in the minds of many people. In the NFT field , when Pop Mart was listed and valued at nearly 100 billion, the term blind box has penetrated almost every field of society, including the crypto field. MEME has become the undisputed crypto version of Pop Mart in the circle. In 2021, we look forward to seeing more NFT applications, from virtual items in games to concert tickets, etc., as well as insurance projects like AC’s earliest work, policy NFTs, etc. I don’t know how the combination of STO and DeFi will develop in 2021. I look forward to seeing more off-chain assets mapped to the blockchain in the form of on-chain NFTs, or on-chain native NFTs projected to the off-chain in a similar way, either way. Storage, on the other hand, seems to have not made much of a splash since Filecoin went online. The reason is that there is still too little data on the blockchain, and it is not yet large enough to require distributed storage. Various storage projects are also relatively calm. In 2021, it may be too early to see storage take off. As for privacy , it seems that Monero is the only one that stands out with its gray usage scenarios in the past. With the widespread application of DeFi in 2020, the demand for user privacy protection will surely grow in 2021. Currently, the privacy application tornado.cash on ETH is becoming more and more well-known, and it is believed that AMM products with anonymous functions may also emerge in 2021. What are your thoughts and predictions about the blockchain world in 2021? Please leave your comments in the comment section. Previous article: Uni, 1inch and others are constantly giving away “big red envelopes” worth tens of thousands of yuan for free. Have you used DeFi this year? ▎Recommended Reading 2021 is likely to be Ethereum’s “highlight year” Summary of the 2020 “DeFi Carnival”, what is the new direction for the next year? Bitcoin 2020 year-end summary report: Even if it rises to 1 million US dollars, it may have nothing to do with most people DeFi can’t stop! Ethereum’s financial “building” is gradually taking shape In the endless and rapid evolution of DeFi, is the skyrocketing algorithmic stablecoin just a carnival for a few? DeFi Trust Empire? Multiple projects led by AC in "M&A" have seen sharp increases 4 projects in 4 months, is AC the "King of DeFi" or a "scumbag" who has deceived many people?
——End—— "Disclaimer: This article is the author's independent opinion and does not represent the position of Vernacular Blockchain. This content is only for popular science learning and communication among crypto enthusiasts and does not constitute investment opinions or suggestions. Please view it rationally, establish correct concepts, and improve risk awareness. The copyright and final interpretation rights of the article belong to Vernacular Blockchain. " | 
