Revisiting Some Predictions - The Daily Gwei #149

I'll give you all access to my crystal ball one day.

Back in January of this year I made a bunch of predictions about what I thought we’d see in 2020 for Ethereum and DeFi. As we’re now at the end of 2020, I wanted to revisit these predictions and see which ones I got right, which I got wrong and why!

If you’re relatively new to the space the predictions I made may seem obvious to you now but at the time they were anything but that. Let’s start with my first prediction about eth2 phase 0 having a strong launch - back in January eth2 still seemed like it was very far away for most people and there was no “official” launch date in sight. Fast forward a few months and we had a frozen spec, multiple testnets running, a more concrete rollout plan and a community eager to make eth2 phase 0 happen in 2020.

Next up is total daily DEX volume. At the time I made that prediction decentralized exchanges weren’t even doing $1 billion in trading volume per month and I made the crazy prediction that we’d see daily DEX volume at $1 billion this year. Well it turns out that prediction wasn’t so crazy after all as DEXs regularly do $1 billion+ a day now with total monthly volumes at $20 billion+. To be fair I’m still quite surprised that we achieved $1 billion per day in trading volume but I guess that’s thanks to yield farming (something no one predicted)!

For my next prediction I was way too conservative by saying that USD locked in DeFi would only exceed $5 billion - it ended up growing to $15 billion+. At the time I made the prediction TVL in DeFi was sitting at around $800 million so obviously I wasn’t bullish enough on DeFi here. Though as I mentioned above, I had no way of knowing that yield farming and liquidity mining would become a thing and that’s actually what ended up catapulting DeFi’s growth to insane levels. Maybe if yield farming didn’t happen we would’ve only gotten to $5 billion USD locked - I guess we’ll never know now (and to be honest it doesn’t really matter).

Next up I predicted that scaling/layer 2 would rapidly mature in 2020 and that’s exactly what it did. You can read the pieces I wrote about this here, here, here and here. Though, we didn’t see as much layer 2 adoption as I had hoped for but I think 2021 will be the year for that as we have Synthetix’s Optimism implementation going live, the Uniswap v3 launch that is rumored to come with some sort of layer 2 scaling and I know of many other top DeFi protocols that are formulating layer 2 scaling strategies. As for existing technology, we have the Dark Forest game living on the xDAI sidechain, prediction markets such as Polymarket and Augur living on Matic Network, Loopring and DeversiFi living on zkRollups and more. All in all 2020 was an amazing year for Ethereum scaling.

So the last prediction on my list is the one I got wrong and I was way too ambitious on by stating that I thought 20% of all Ethereum transactions would happen privately. Though this prediction went hand-in-hand with layer 2 adoption taking off because transactions on layer 2 are private by default (using certain technologies). I do expect privacy to become more widely adopted on Ethereum in 2021 especially with tools like Tornado Cash gaining increased usage via their liquidity mining program and the possibility of people taking privacy more seriously due to increased regulations from governments.

I’ll probably put out some 2021 predictions within the next few weeks as I want to sit on them for a bit before publishing - it’s becoming harder and harder for me to really predict where Ethereum is going to be in a month let alone a year - I guess Ethereum is finally all grown up!

Have a great day everyone,
Anthony Sassano

Join the Daily Gwei Ecosystem

All information presented above is for educational purposes only and should not be taken as investment advice.