Everything wrong with Ethereum in 2020

Image from Ethereum.org

Previous Year: Everything wrong with Ethereum in 2019

Let’s look at what is working incredibly well on Ethereum as well as what is not. In this report we analyze the Ethereum ecosystem and see how things have improved, and also highlight completely new developments.

Everything the Ethereum community does is dramatic with much fanfare, and I have been there every step of the way, contributing and participating in some capacity since its inception. I treat digital assets as a distinct asset class to highlight how they fit into a broader economic picture, and have been an advisor to several financial technology firms because of it.

Although Ethereum is a payment system, like other leading cryptocurrencies such as Bitcoin, it has a more robust programming system which allows people to develop things more easily, without requiring changes to the payment system or any other kind of gatekeeping. This has resulted in a snowball of infrastructure and tools being developed that allow people to build even bigger and robust applications. Over the last year, Ethereum has evolved into a financial hub of the digital asset space and this has subsequently changed the outlook of the Ether asset, which does become more and more scarce in its use now.

Decentralized Finance

Half a decade ago, Ethereum was built to offer the stability of an organization but without the hierarchy. Basically, launch corporations without requiring them to be bound to a natural person and the state. Decentralized autonomous organizations (DAO) that accomplish what they need to, without the infrastructure and assurances only guaranteed by the state.

Without robust trade routes and assets with liquidity there are limitations to what this concept can do, and that is where decentralized finance (DeFi) has come to fill the void for all of DAOs.

The concept of “DeFi” takes front and center now.

Specifically, what is different this year, compared to prior years is the concept of “composability”. Composability makes smart contracts interoperable with each other, most similar to how “interchangeable parts” heralded the industrial revolution. No longer were metalsmiths working in silos recreating rudimentary trinkets in competition with each other, instead they were combining their trinkets in infinite permutations to build more and more robust machinery.

This has been a long time coming amongst developers in the Ethereum ecosystem and this has been birthed under the term composability.

The Ethereum blockchain has become the epicenter of a lot of activity and projects once again, as a permissionless commerce center.

This changes the speculative nature of the Ether asset. In prior years the primary criticism was based on how much the Ether asset could ever become scarce. This was because very little Ether was necessary to launch a complex smart contract, or to pay for any transaction on the Ethereum blockchain, combined with the reality that many more Ether were created per block every 12 seconds as the block reward. All of that calculus has changed over the last year with the block reward decreasing, and the usage of Ether increasing. Including much of it being intentionally locked and destroyed forever by various communities and users.


Macroeconomics, Fintech, Emerging Markets, Digital Assets, Crypto, Derivatives | Director @ STS | Seen in TheStreet, INC, Entrepreneur #BUIDL

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