The crypto ecosystem seems to reinvent itself every few months which means it can be quite difficult to take a longer-term view and place longer-term bets. There are plenty of examples of projects that failed miserably over the last few years even though they had a lot of hype during the first few months of their launch. So, given this context, I tend to bet on specific macro trends and then drill down to the projects within those trends to try and find the ones I think will be around for the next decade or longer.
Obviously I’m betting on Ethereum still being the leader of the crypto space in 10 years and by extension, I’m betting that a lot of the value that Ethereum generates will flow to ETH. On that note, I think that EIP-1559 was a turning point here because now ETH captures most of the fee revenue that the Ethereum network generates - though this isn’t the only value accrual mechanism for ETH (more on that here). Additionally, I believe it’s going to be difficult for most people to outperform a simple buy and hold ETH strategy over the long-term (that’s not investment advice, but my portfolio is mostly ETH for a reason).
Most of the DeFi ecosystem has taken a bit of a back seat lately after having a monster 2020 (I wrote more about this here). Though this doesn’t mean the innovation and building has stopped - on the contrary, there are new projects spinning up all the time and the old projects keep growing and adding new products/features. Regardless of all of this, it’d be pretty hard to find someone who could give an actual long-term bearish thesis for why DeFi would fail - even if it all becomes totally centralized, it still “succeeds” in that it’d be better than the existing system. DeFi’s total addressable market is the entire planet but my thesis is that it will sit in the background and most people will never directly interact with protocols - instead, they will use intermediaries to access DeFi’s benefits.
Scalability is probably the easiest bet to place over the next 10 years because without scaling, we quite literally will have a cap on how many people we can onboard onto Ethereum. I’ve written a lot about scaling lately (and will continue to do so into the future) but I can sum up all my writing by saying: scaling is here, it’s just not evenly distributed yet. Pay attention to not just rollup technology, but also other innovations like Validium/Volition (StarkWare), zkPorter (zkSync), Polygon Hermez, zkEVM and basically anything zero knowledge related. I believe that this technology has the power to change the entire computing and internet fields - not just crypto.
One thing that has seen little adoption to date has been privacy-focused technology which comes in many forms - from mixers like Tornado Cash to layer 2 zk-zk rollups such as Aztec Protocol to hybrid ZKR/OR solutions like EY/Polygon Nightfall. Each solution offers its own benefits and trade-offs but what they all have in common is that they are critical for the Ethereum ecosystem. Big enterprises and corporations are not going to want to use the Ethereum mainnet (or layer 2’s) if everything they do on there is publicly viewable to the world. While it’s still early days for privacy on Ethereum, I’m confident that over the next 5-10 years this will mature to the point where every transaction is private by default.
Cross-L2/cross-chain bridges are currently a huge theme within the crypto ecosystem with many projects like Connext, Hop, Celer, Synapse and others offering fast entries/exits between different L2’s/chains. I do actually believe that we will live in a multi-chain world but most of those chains will simply be secured by Ethereum (as layer 2’s or other sister constructions such as Validium’s/Volition’s). That’s why I’m betting on the bridging ecosystem seeing massive growth and adoption over the next years. On top of that, we also have arbitrary message relayers like StarkWare’s dAMM and Rari’s Nova that will allow for cross-L2/cross-chain asynchronous communication - imagine being able to execute a trade on Optimism via Uniswap with liquidity sourced from SushiSwap on Arbitrum.
We all know that NFTs are already absolutely massive and I don’t think this growth is going to slow down anytime soon. Of course, it’s basically impossible to place 5-10 year bets on individual NFTs given that most of them will end up being worth very little (if anything at all), so that’s why I’m personally betting on infrastructure projects (such as Immutable X) and some of the “grail” NFTs like CryptoPunks and Art Blocks. Of course, we’ve only really scratched the surface of the NFT ecosystem and I’m expecting things to get much crazier over the coming years.
Lastly, and related to NFTs, is crypto-gaming. Axie Infinity has showed the world just how massive a play-to-earn video game can be and I suspect that all of the AAA game companies have now taken notice. Over the next few years, we will see an absolute explosion in the number of crypto-games going live and they will all bring unique experiences, innovation and gameplay to the scene. As a passionate gamer, I’m extremely excited to see my 2 loves (Ethereum and gaming) come together in such an awesome way.
As you can see, it may be difficult to pick long-term winners out of individual projects within crypto, but focusing on the macro trends can definitely help to align your thinking for the longer-term. I’ve already dedicated my life to this industry and expect to be involved for decades to come - I hope that all of you will join me on this exciting journey - we’re really only just getting started!
Have a great day everyone,
Enjoyed today’s piece? I send out a fresh one every week day - be sure to subscribe to receive it in your inbox!
"I’ve already dedicated my life to this industry and expect to be involved for decades to come - I hope that all of you will join me on this exciting journey - we’re really only just getting started!"