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The current year was quite favorable for the blockchain development industry. The outcome of the passing year shows there has never been a better time to start a blockchain-based project.
This review presents an analysis of the most significant events in the crypto market and tells how this will affect the blockchain development industry. In this piece we will also share some predictions about blockchain technology for 2021.
Upcoming blockchain platforms
A number of recently implemented tech approaches and upcoming blockchain solutions offer suggestions for blockchain trends in 2021.
Ethereum 2.0 launch
Questions regarding Ethereum enhancement have been circling crypto people’s minds for several years already. Comments and inconveniences were mainly focused on the issue of scalability, slow TPS and the amount of transactions allowed for one block – 12 is just so little for today’s blockchains.
The core concept behind the new Ethereum 2.0 version can be found here. The main focus of 2020 4Q was the launch of Phase 0. It stands for Beacon Chain adoption and the integration of the new Ethereum PoS which launched on the December 1, 2020.
The biggest and long-anticipated update for 2021 will be the planned introduction of Phase 1 and integration of PoS and shard chains (expected in 2021 Q4).
The world has never seen a transition of such a big ecosystem. Therefore, the emergence of numerous doubts and uncertainties seems quite reasonable. Along with the future implementation of sharding, this will significantly improve network operability speed and increase transaction throughput. That is why this Ethereum transition will deservedly become one of the biggest blockchain trends in 2021.
“Polkadot is a sharded blockchain, meaning it connects several chains together in a single network, allowing them to process transactions in parallel and exchange data between chains with security guarantees”. – Polkadot lightpaper
In order to connect to the Polkadot ecosystem, or build your own blockchain within it, a user needs to link to Relay Chain which is a main blockchain for Polkadot. Until now five out of 100 parachain slots have been successfully connected. Although 100 was initially defined as the primary goal, there are some thoughts about voting to extend the number of allowed slots.
The biggest number of slots is expected to be added gradually over the next few years. In addition, a significant amount of projects previously deployed to Kusama testnet will start the transition to the Polkadot environment.
This alteration will surely have a great impact on the crypto market because the overwhelming majority of projects built on the Substrate (Acala, Moonbeam, Halva, Edgeware, Centrifuge etc.) establish joining Polkadot as one of the main goals.
BinanceChain has started its smart chain in the fourth quarter of 2020. The launch gathered a lot of attention and positive feedback among the community. Thus, it resulted in enormously fast development by the dedicated community environment and the start of very promising projects like PancakeSwap DEX.
In addition, this chain is supported by Trust Wallet which is a very reliable player in the blockchain market. Their involvement was justified by one of the largest airdrops to support Binance and its smart chain a few weeks ago.
The total value locked in DeFi (TVL) started to grow and show very promising results at the end of December. Moreover, the cross-chain ecosystem of Polkadot, along with a renewed and scalable Ethereum 2.0, will surely make a real industry revolution.
Prediction for blockchain DeFi market
The DeFi TVL is currently over $20 billion (according to DeFi Pulse). This is a strong base for the sector’s future growth.
The beginning of a decentralized financial market marks one of the greatest initiatives with proven potential to develop throughout 2021. However, such a promising market certainly attracts many unstable projects and scams. We expect the gradual downfall of DeFi hype in the coming year along with the survival of authentic, true projects that have a broad community and support from big authorities.
A list of factors (with Covid pandemic at the lead) have a big impact on today’s crypto market. First of all, due to the continuous accumulation of capital, the market became pumped and significantly oversaturated with liquidity. Therefore, we shall assume a big boom for small-to-medium-sized blockchain-based projects.
On the other hand, the pandemic issue has raised the question of cybersecurity to the highest priority. As a result, the other boom covering decentralized projects will be the emphasis on security problem solving.
Blockchain technology trends to come in the 2021
Based on the continuous market research and analysis of the coming changes we are able to establish a few predictions about blockchain technology trends.
Strengthening of Solidity language
The recent release of Solidity 0.8 brought a few major changes to the language structure, providing more ease for programmers. In addition, OpenZeppelin released Defender and renewed their contracts in the last quarter of the past year. Those new implementations and the adoption of more convenient toolsets pushed blockchain development towards Solidity even more.
Growth of Brownie development platform
However, on the other hand, Brownie is strengthening its position in relation to Traffle. This is justified by the fact that Viper is becoming more and more popular and, for example, Yearn Finance (the largest DeFi platform after several mergers) chose Brownie to host all development processes. From this perspective we can expect that more and more projects will choose Brownie as a primary smart contracts development framework or move to it.
Higher demand for Rust programmers
As we have mentioned before, the upcoming release of Polkadot parachains will make a huge impact on the market. Polkadot Relay Chain is built on the Substrate framework with Rust. Moreover, Rust is the programming language of one of the main Ethereum nodes – Parity.
Therefore, the will of projects to connect to the multichain in the near future and further implementation of numerous advantages and protocol enhancements will push the demand for developers with great expertise in Rust.
Decentralized identity management
The current issue with KYC and identity management, in DeFi in particular, builds a solid ground for development trends. The CEO of Blaize, Sergey Onyshchenko, shares the same view regarding this topic.
“In the KYC market there is the empty field for development opportunities. This is a very sensitive topic for decentralized exchanges in particular; therefore, sooner or later a big player will come here to offer a completely new approach to identity management.
Another important thing that’s coming is the tokenization of assets from the real business sector such as real estate or art. Such projects as Centrifuge have already begun development in this direction and offer the introduction of tokenized invoices which enable you to take out a loan on the security of such an invoice.”
Drastic market changes along with the worldwide pandemic opened up many new niches and has boosted the development of alternative technologies. Last year was quite favorable for the blockchain market and fruitful in terms of newborn technologies and very promising projects. But the recent growth of main cryptos like Bitcoin and Ethereum show that it has not reached its limits.
Zlata Parasochka is a tech writer and crypto believer. She also has her own blog on the Hacker Noon website.
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