Behind the explosion of ETH, DOT, and BNB, the investment logic of blockchain in 2021 is revealed

At the beginning of the new year, the crypto currency market has entered a state of skyrocketing, and the market has truly entered a bull market.

BTCAll the way madly, stood firmly above 57,000 US dollars. And it refreshed the price high for 5 consecutive days. As of writing, BTC rose to 57,000 US dollars. According to the QKL123 market, the total market value of Bitcoin also exceeded $1 trillion, setting a record high. People have long been accustomed to such results. Even many people in the industry have given higher price forecasts.

The world’s second largest cryptocurrencyETHIt 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%.

The most amazing is BNB from DOT.

DOT continues to hit new highs in the past few days. It has risen by 192% in the past month and by 17 times in the past year. Yiyue is also the fifth largest cryptocurrency by market value.

BNB has also been in a turbulent manner recently, continuously challenging historical highs, and its historical record on February 20 was as high as US$346. The increase in the past week reached 127%, and the increase in the past month was as high as 572%. This also makes BNB the third-ranked crypto currency in market value. And under the leadership of BNB,Platform currencyThe collective surge has also hit a record high. This has also become the hottest sector in the recent crypto currency market.

It can be said that in 2021, the crypto currency market has turned from a Bitcoin bull market to a full bull market.

Perhaps behind the soaring ETH, DOT, and BNB, the investment logic of blockchain in 2021 is also revealed .

The investment logic behind the skyrocket

In 2021, it is very beneficial for the blockchain development industry. The results of the past year indicate that there is no better time than now to launch blockchain-based projects.

Many recently implemented technical methods and upcoming blockchain solutions provide recommendations for blockchain trends in 2021. ETH, DOT, BNB boom is based on this logic.

Expectations of Ethereum 2.0

There seems to be at least two reasons for the rise of Ethereum this year. On the one hand, the skyrocketing of Bitcoin has attracted a large number of institutions and retail investors’ interest in cryptocurrencies. On the other hand, decentralized finance ( DeFi ) is booming.

Regarding ETH’s breakthrough of US$2,000, Paul Veradittakit, a partner at Pantera Capital, a crypto asset investment company, told Decrypt: “ETH reached US$2,000, verifying the surrounding DeFi andNFTThe app is hitting hockey stick growth, and Ethereum is proving itself to be a leader in creating decentralized applications. All of this has finally led to an institution-level asset class. “

In fact, in terms of institutional assets, there are more and more Ethereum financial tools available to investors.GrayscaleEthernet Square Trust to Toronto Stock Exchange 3iQ of ETH funds.

For several years, the issue of the enhancement of Ethereum has plagued people of cryptocurrency. The comments and inconveniences are mainly focused on scalability, slow TPS and the amount of transactions allowed in a block. 12 is too little for today’s blockchain.

The core concepts behind the new Ethereum 2.0 version can be found here. The main focus of the fourth quarter of 2020 is the launch of Phase 0. It represents the adoption of the beacon chain and the launch of the new Ethereum on December 1, 2020PoSIntegration.

The biggest and long-awaited update by 2021 will be the planned introduction of the first phase and integration of PoS and shard chains (expected to be carried out in the fourth quarter of 2021).

The world has never seen the transformation of such a huge ecosystem. Therefore, it seems reasonable that there are many doubts and uncertainties. With the future implementation of sharding, this will significantly increase the speed of network operability and increase transaction throughput. This is why the Ethereum transition will deserve to be one of the biggest blockchain trends in 2021.

PolkadotRetrograde

When everyone’s eyes were on Bitcoin, Polkado (DOT) quietly began to occupy the market. According to non-small data, the current market value of DOT has exceeded 35.665 billion U.S. dollars, surpassing ADA,XRPwithLTC, Ranked among the TOP4 in the market.

Polkadot has been regarded as a competitor of Ethereum since its inception, allowing smart contracts to operate in a parachain ecosystem. Through the network between parachains and various blockchains, Polkadot can process data more effectively and solve the scalability problem of existing blockchain networks. When Polkadot’s parachain is launched in the foreseeable future, it is expected to support large-scale DeFi protocols and decentralized applications.

The catalyst for DOT’s price surge may be related to the opening of the registration of Parachain test qualifications by the Polkadot test network Rococo on the 13th. On January 13, the Polkadot Parachain Testnet Rococo V1 officially opened the registration application. Only 5 hours later, the first parachain on Rococo V1 was born, and the second-layer expansion protocol Plasm Network took the lead, becoming the first parachain connected to the Rococo V1 test network. At present, 18 projects have submitted applications for registration of the Polkadot Rococo V1 parachain.

Boca (Polkadot) block chain is a slice, a plurality of chains which means it is connected in a network, allowing them to parallel processing of transactions, and have secure exchange of data between the security chain. Polkadot includes three parts: relay chain, parachain, and parallel thread. The relay chain provides card slots for other links. The number of card slots is limited and can only be obtained by auction. The process of bidding is that DOT holds users to pledge DOT to vote for the relay chain to help each project participate in the card slot bidding.

In order to connect to the Polkadot ecosystem, or build your own blockchain in it, users need to link to the relay chain, which is the main blockchain of Polkadot. So far, five of the 100 parachain slots have been successfully connected. Although 100 was originally defined as the main goal, there are still some ideas for voting to expand the allowed quota.

It is expected that the maximum number of slots will be gradually added in the next few years. In addition, previously deployed toKusamaA large number of projects on the testnet will begin to transition to the Polkadot environment.

This change will definitely have a major impact on the crypto market, because the vast majority of projects established on Substrate (Acala, Moonbeam, Halva, Edgeware, Centrifuge, etc.) will join Polkadot as one of the main goals. 

The leader of BinanceChain

BNB is undoubtedly the leader of the collective skyrocketing of platform coins, and the breakthrough in its market value has closely linked it with Ethereum, and has triggeredBinanceWill it surpass the new topic of Ethereum.

The talk about Binance and Ethereum’s battle for hegemony is not only triggered by the skyrocketing market, but the market value breakthrough. The real reason behind it is the expansion of Defi!

The main reason why BNB is able to have such a big surge and drive the collective explosion of platform coins is the outbreak of the Defi ecology established by its Binance smart chain, which makes the market form a mutual promotion and echo.

On the one hand, Defi based on Ethereum has been continuously optimized, improved and innovated, providing Defi with more complete basic services and construction, and becoming a representative of decentralized finance. On the other hand, the performance of other public chains has improved the experience of Defi. And scale, has obtained unprecedented development opportunities.

BinanceChain has launched the smart chain in the fourth quarter of 2020. This release attracted wide attention and positive feedback from the community. Therefore, it has greatly accelerated the development speed through the launch of a dedicated community environment and very promising projects such as PancakeSwap DEX .

In addition, the chain is supported by Trust Wallet, which is a very reliable participant in the blockchain market. Not long ago, in order to support Binance and its smart chain, they invested in the largest airdrop.

The prosperity of Binance Defi is not only the result of Binance’s endorsement. Although the current market is more speculative, it also reflects the performance of the continuous expansion of Defi market demand.

What other investment opportunities are there?

The skyrocketing of ETH, DOT, and BNB made many people feel that they had missed investment opportunities. Is there really no new opportunity?

Forecast of the blockchain DeFi market

Billionaire venture capitalist and Bloq co-founder Matthew Roszak said that decentralized finance (DeFi), which has a current market value of $40 billion, may “add another zero within a year” (a 10-fold increase). He said that the DeFi innovation cycle happens in real time. Most notable are the yield opportunities presented in the DeFi stack. Although financial institutions have not invested funds in liquidity mining. But there is “macro demand” for return on capital. Now, early adopters are accumulating this value.

The beginning of the decentralized financial market marks one of the greatest initiatives, with potential for development throughout 2021. However, such a promising market will undoubtedly attract many unstable projects and scams. We expect that DeFi hype will gradually decrease in the next year. With the implementation of real projects, these projects have a wide community and are supported by large governments.

Since last year, a series of irresistible factors have had a major impact on today’s crypto market. First, due to the continuous accumulation of capital, the market has become tense and liquidity has been greatly saturated. Therefore, we will bring huge prosperity to projects based on small and medium-sized blockchains.

On the other hand, the pandemic of the covid-19 epidemic has put cybersecurity issues at the highest priority. Therefore, another upsurge of DeFi projects will focus on solving security issues.

Blockchain technology trends in 2021

Based on continuous market research and analysis of upcoming changes, we can 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, providing more convenience for programmers. In addition, OpenZeppelin released Defender and renewed the contract in the last quarter of last year. The adoption of these new implementations and a more convenient tool set has further promoted the stability of blockchain development.

(2) The growth of the Brownie development platform

However, on the other hand, Brownie is strengthening its position in trade. It turns out that Viper is becoming more and more popular. For example, Year 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 the main smart contract development framework, or turn to it.

(3) Higher demand for Rust programmers

As mentioned earlier, the upcoming Polkadot parachain will have a huge impact on the market. The Polkadot relay chain is built on the Substrate framework with Rust. In addition, Rust is the programming language of Parity, one of the main nodes of Ethereum.

Therefore, the project will be connected to multiple chains in the near future, and further realize numerous advantages and protocol enhancements, which will promote the demand for developers to have rich expertise in Rust.

(4) Decentralized identity management

Current issues related to KYC and identity management, especially in DeFi, have laid a solid foundation for development trends. Blaize CEO Sergey Onyshchenko has the same view on this topic.

“In the KYC market, there is a gap in development opportunities. For decentralized exchanges, this is a very sensitive topic; therefore, sooner or later, large companies will come here to provide a new method of identity management.

Another thing that is about to happen is the tokenization of real commercial assets such as real estate or artworks. Projects such as Centrifuge have begun to move in this direction and have provided the introduction of tokenized invoices, allowing you to loan with the guarantee of such invoices. “

in conclusion

With the global influenza pandemic, drastic market changes have opened up many new markets and promoted the development of alternative technologies. Last year was quite beneficial to the blockchain market, and it was fruitful in terms of new technologies and very promising projects.

But the recent growth of major cryptocurrencies (such as Bitcoin and Ethereum) shows that it has not reached its limit.

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