Aaron Wright, a professor at the Cardozo School of Law, believes Ethereum could “eat” Wall Street in the next 10 years.
The professor outlined three main reasons why Ethereum could compete against the traditional financial sector. They are decentralized autonomous organizations (DAOs), non-fungible tokens (NFTs), and personal tokens.
Why Ethereum Could Develop Rapidly in the Years to Come
Decentralized finance (DeFi) has taken Ethereum and the cryptocurrency space by storm. The DeFi protocols are now set to be worth over $ 14.9 billion, and the cumulative market capitalization of DeFi tokens has hit $ 18.8 billion.
But Ethereum goes way beyond DeFi. Wright stated that DAOs, NFTs, and personal tokens could massively improve the usability of Ethereum. He said:
“DeFi is not starting to eat Wall Street. Ethereum is. In the next 5-10 years it could eat: * Sillicon Valley with DAOs * Art / Gaming, Market with NFTs * Social networks, media and influencer networks with personal Token. “
DAOs in particular could become the focus of Ethereum’s next phase of growth as they can be customized in many different ways.
In its concept, a DAO is an organization that is managed decentrally. Members of the DAO would vote to make decisions so that the community can run the organization.
A DAO can be a fund, a project or a community. Usually, a DAO is based on a token called a governance token. This allows members of the organization to vote to approve proposals.
For example, a DAO could be used in a venture capital fund. In the case of a DAO-based fund, holders of the governance token could control the business of the fund.
If these decentralized governance systems are applied in both the financial and non-financial sectors, this could massively improve the usability and acceptance of Ethereum.
Eth2 just makes everything better
In the past, when Ethereum saw significant increases in user activity across both DeFi, DAO, and other decentralized applications, scaling issues often became an obstacle.
However, with the release of the main Eth2 network, Ethereum’s blockchain network could process thousands of transactions per second.
The activities in the chain show that the demand for stakes in ETH only increases, which would make Eth2 more stable.
1.08% of the ETH offer is tailored to the ETH 2.0 contract.
Show diagram ? https://t.co/MvovMDShNY#eth2 pic.twitter.com/rQbzGARZdw
– CryptoQuant.com (@cryptoquant_com) December 8, 2020
In the medium to long term, Eth2 would provide a strong foundation for decentralized applications. If Ethereum becomes widespread in the years to come, the blockchain network can handle the surge in demand.
Particularly at a time when the demand for ETH and the Ethereum blockchain is growing significantly, the likelihood of ETH general adoption can increase rapidly if current levels of user activity can be sustained.
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