Editor's Note: This article comes fromChain reference (ID: lianneican), Author: Internal Reference Jun, reprinted by Odaily with authorization.
Editor's Note: This article comes from
Chain reference (ID: lianneican)
Chain reference (ID: lianneican)
, Author: Internal Reference Jun, reprinted by Odaily with authorization.
At the beginning of the new year, the digital currency market has entered a state of skyrocketing, and the market has truly entered a bull market.
BTC ran all the way and stood firmly above $57,000. And refreshed the price high for 5 consecutive days. As of writing, BTC has risen to 57,000 US dollars. According to the QKL123 market, the total market value of Bitcoin has also exceeded 1 trillion US dollars, setting a record high. For such results, people have long been accustomed to. Even many people in the industry gave higher price predictions.
The world's second largest cryptocurrency ETH also hit a record high at noon on February 20, breaking through $2,000 for the first time, which means that since the beginning of this year, ETH has increased by 168%.
DOT has continuously hit new highs in the past few days. It has risen by 192% in the past month and 17 times in the past year, making it the fifth largest cryptocurrency by market value.
BNB has also been on a tear recently, constantly challenging new historical highs, reaching a record high of $346 on February 20. The increase in the past week reached 127%, and the increase in the past month was as high as 572%. This also made BNB the third largest digital currency by market value. And under the leadership of BNB, the platform tokens collectively rose sharply, and all of them hit record highs one after another. This has also become the hottest sector in the digital currency market recently.
It can be said that the digital currency market in 2021 has turned from a Bitcoin bull market to a comprehensive bull market.
Perhaps behind the surge of ETH, DOT, and BNB, there is also the investment logic of the blockchain in 2021.
secondary title
The investment logic behind the skyrocketing
2021 will be very favorable for the blockchain development industry. The results of the past year have shown that there has never been a better time to start a blockchain-based project than now.
Many recently implemented technological approaches and upcoming blockchain solutions offer suggestions for blockchain trends in 2021. The surge of ETH, DOT, and BNB is based on this logic.
Expectations of Ethereum 2.0
There seem to be at least two reasons for Ethereum’s rise this year. On the one hand, the skyrocketing price of Bitcoin has attracted a large number of institutional and retail investors' interest in cryptocurrencies. On the other hand, decentralized finance (DeFi) is booming.
For ETH breaking through $2,000, Paul Veradittakit, a partner at encrypted asset investment company Pantera Capital, told Decrypt: "ETH reaching $2,000 verifies that applications around DeFi and NFT are hitting the hockey stick growth, and Ethereum is proving itself as the creation of decentralized leader in globalization, all leading to an institutional-grade asset class.”
In fact, in terms of institutional-grade assets, there are more and more Ethereum financial instruments available to investors, from the Grayscale Ethereum Trust in the United States to the ETH fund of the Toronto Stock Exchange 3iQ.
Questions about Ethereum enhancements have plagued cryptocurrency folks for several years. Comments and inconveniences mainly focus on issues with scalability, slow TPS, and the amount of transactions allowed in one block. 12 is simply too little for today's blockchains.
The core concepts behind the new Ethereum 2.0 release can be found here. The main focus of Q4 2020 is the launch of Phase 0. It represents the adoption of the Beacon Chain and the integration of the new Ethereum PoS launched on December 1, 2020.
The biggest, long-awaited update in 2021 will be the planned introduction of Phase 1 and the integration of PoS and shard chains (expected in Q4 2021).
The world has never seen the transformation of such a large ecosystem. Therefore, it seems quite reasonable that many doubts and uncertainties arise. With future implementations of sharding, this will significantly increase network operability speed and increase transaction throughput. This is why the Ethereum transition will undoubtedly be one of the biggest blockchain trends of 2021.
Polkadot’s Retrograde
While all eyes are on Bitcoin, Polkado (DOT) quietly began to occupy the market. According to Feixiaohao data, the current market value of DOT has exceeded 35.665 billion US dollars, surpassing ADA, XRP and LTC, and ranking among the top 4 in the market.
Polkadot has been considered a competitor of Ethereum since its inception, allowing smart contracts to run in the parachain ecosystem. Through the parallel chain and the network between various blockchains, Polkadot can process data more efficiently and solve the scalability problem of the existing blockchain network. When Polkadot's parachain goes online in the foreseeable future, it is expected to support large-scale DeFi protocols and decentralized applications.
The catalyst for the DOT price surge this time may be related to the Polkadot test network Rococo’s open parachain test qualification registration on the 13th. On January 13, the Polkadot parachain test network Rococo V1 officially opened for registration applications. Just 5 hours later, the first parachain on top of Rococo V1 was born, and the layer-2 expansion protocol Plasm Network took the lead, becoming the first parachain to access the Rococo V1 test network. At present, 18 projects have submitted Polkadot Rococo V1 parachain registration applications.
Polkadot is a sharded blockchain, which means it connects multiple chains in a network, allowing them to process transactions in parallel and exchange data between chains with security guarantees. Polkadot includes three parts: relay chain, parachain, and parathread. The relay chain provides card slots for other links to enter. The number of card slots is limited and requires bidding to obtain them. The auction process is that DOT holders mortgage DOT to vote for the relay chain, helping various projects to participate in the card slot auction.
In order to connect to the Polkadot ecosystem, or build your own blockchain within it, users need to link to the Relay Chain, which is Polkadot's main blockchain. So far, five of the 100 parachain slots have been successfully connected. While 100 was initially defined as the main goal, there were some ideas for voting to expand the number of places allowed.
The maximum number of slots is expected to gradually increase over the next few years. Additionally, a large number of projects that have previously been deployed to the Kusama testnet will begin transitioning to the Polkadot environment.
This change is sure to have a major impact on the crypto market, as the vast majority of projects built on Substrate (Acala, Moonbeam, Halva, Edgeware, Centrifuge, etc.) will join Polkadot as one of their main goals.
The leader of BinanceChain
BNB is undoubtedly the leader of the collective skyrocketing platform currency, and its breakthrough in market value has closely linked it with Ethereum, and it has also triggered a new topic of whether Binance will surpass Ethereum.
The discussion about the hegemony between Binance and Ethereum is not just caused by the skyrocketing market value and the breakthrough of market value. The real reason behind it is the expansion of Defi!
On the one hand, Defi based on Ethereum is constantly optimized, improved and innovated, providing more complete basic services and construction for Defi, and becoming a representative of decentralized finance. On the other hand, the performance of other public chains improves the experience of Defi and scale, has obtained unprecedented development opportunities.
BinanceChain has launched the smart chain in the fourth quarter of 2020. The release has attracted a lot of attention and positive feedback from the community. Hence, it speeds up development tremendously with a dedicated community environment and very promising project launches like the PancakeSwap DEX.
Also, the chain is backed by Trust Wallet, a very reliable player in the blockchain market. Not too long ago, in support of Binance and its Smart Chain, they put in the largest airdrop ever.
The prosperity of Binance Defi is not only the result of Binance’s endorsement. Although it is more speculative from the market point of view, it also reflects the ever-expanding demand for Defi market.
secondary title
What other investment opportunities are there?
The surge of ETH, DOT, and BNB has made many people feel that they have missed investment opportunities. Are there really no new opportunities?
Blockchain DeFi Market Forecast
Decentralized finance (DeFi), currently valued at $40 billion, could “add another zero in a year” (a 10x increase), according to billionaire venture capitalist and Bloq co-founder Matthew Roszak. He said that the innovation cycle of DeFi happens in real time. Most notable are the yield opportunities presented within the DeFi stack. Although financial institutions have not yet invested funds in liquidity mining. But there is a “macro need” for returns on capital. Now, early adopters are accumulating that value.
The start of the decentralized finance market marks one of the greatest moves with potential to grow throughout 2021. However, such a promising market will undoubtedly attract many volatile projects and scams. We expect the DeFi hype to taper off over the coming year as real projects take off with broad communities and large government backing.
Since last year, a series of irresistible factors have had a major impact on today's crypto market. First of all, due to the continuous accumulation of capital, the market has become tense and the liquidity has been greatly saturated. Therefore, we will bring great prosperity to small and medium-sized blockchain-based projects.
On the other hand, the COVID-19 pandemic has placed cybersecurity issues at the highest priority. Therefore, another upsurge in DeFi projects will be to emphasize addressing security issues.
Blockchain Technology Trends in 2021
Based on continuous market research and analysis of upcoming changes, we are able to make some predictions about blockchain technology trends.
(1) Strengthen solid language
The latest version of Solidity 0.8 has made some major changes to the language structure to provide more convenience for programmers. Additionally, OpenZeppelin released Defender and renewed its contract in the last quarter of last year. The adoption of these new implementations and more convenient toolsets further promotes the stability of blockchain development.
(2) Growth of the Brownie development platform
On the other hand, however, Brownie is strengthening its position in trade. Viper is proving to be more and more popular, for example Yearn Finance (the largest DeFi platform after several mergers) chose Brownie to host all the development process. From this perspective, we can expect that more and more projects will choose Brownie as the main smart contract development framework, or switch to it.
(3) Higher demand for Rust programmers
As mentioned earlier, the upcoming release of Polkadot parachains will have a huge impact on the market. The Polkadot relay chain is built on the Substrate framework with Rust. Additionally, Rust is the programming language of Parity, one of Ethereum’s main nodes.
Current issues around KYC and identity management, especially in DeFi, provide a strong foundation for the trend to develop. Blaize CEO Sergey Onyshchenko shares the same opinion on the topic.
in conclusion
“In the KYC market, there is a gap of opportunity for growth. This is a very sensitive topic for decentralized exchanges; therefore, sooner or later, a big company will come here to offer a completely new approach to identity management.
Another thing that is on the horizon is the tokenization of assets in real business areas like real estate or art. Projects such as Centrifuge have started to move in this direction and offer the introduction of tokenized invoices that allow you to take out loans against the secured amount of such invoices. "
