An in-depth exploration of the most significant advancements in cryptocurrency technology for 2024, featuring Ethereum’s Duncun upgrade, Solana’s revival, and the emergence of Layer-2 solutions. Additionally, we’ll discuss what to anticipate in 2025.
This special edition of The Protocol reflects on the revolutionary developments of 2024 while looking ahead to the potential future of blockchain technology.
Join us as we examine the key milestones, trends, and forecasts that are defining the next phase of cryptocurrency.
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- Reflecting on 2024: Key Crypto Tech Achievements Ethereum’s Duncun Upgrade: The year 2024 witnessed Ethereum’s most substantial network enhancement to date. The Cancun-Deneb (Dencun) upgrade was activated, representing a major leap forward aimed at improving scalability and lowering data costs, marking a crucial moment in the network’s development. Duncun introduced proto-danksharding, a strategy designed to reduce expenses for Layer-2 rollups by streamlining data availability and boosting transaction speed. Although the changes sparked considerable debate, they were intended to support developers and lay the groundwork for future innovations in Ethereum’s trajectory, solidifying its status as the premier smart contract platform.
Solana Secures Value: Solana’s decentralized finance (DeFi) total value locked (TVL) reached $9 billion for the first time in three years, with its DeFi ecosystem continuing to flourish. This milestone reflects heightened user engagement and the growth of decentralized applications on the platform, significantly aided by institutional adoption and major partnerships. Financial powerhouses like Franklin Templeton and Société Générale utilized Solana for tokenized asset initiatives. Additionally, Solana expanded its presence as Robinhood added SOL to its trading options and Cboe Global Markets filed for Solana-linked exchange-traded funds (ETFs), indicating growing confidence in its infrastructure.
Quantum Computing’s Alarm: Google’s breakthroughs in quantum computing, particularly with its groundbreaking quantum chip, raised concerns within the cryptocurrency community regarding potential threats to blockchain security. The chip’s capability to solve complex problems far beyond the reach of traditional computers reignited discussions about Bitcoin’s dependence on conventional encryption methods and the broader implications for the crypto landscape. Experts stressed the urgency of transitioning to quantum-resistant encryption to protect cryptocurrencies from future vulnerabilities. While current quantum computers are not yet capable of compromising blockchain networks, Google’s advancements highlighted the necessity for proactive measures to ensure the long-term security and resilience of digital assets.
Layer-2 Adoption Rises: The adoption of Layer-2 solutions surged as projects like Arbitrum, Optimism, and Base played crucial roles in tackling Ethereum’s scalability issues. Arbitrum maintained its dominance in the Layer-2 ecosystem, surpassing 1 billion transactions, fueled by robust developer support and DeFi integrations. Optimism expanded its influence with its OP Stack technology, enabling modular Layer-2 solutions and fostering collaboration across the ecosystem through its integration into Optimism’s Superchain. Base, a Layer-2 developed by Coinbase, gained significant traction by leveraging Coinbase’s extensive user base and on-ramps, with Franklin Templeton becoming the first asset manager to launch a tokenized treasury fund on the network.
DeFi Innovators Lead the Way: Aave became the focus of a new fund launched by Grayscale Investments in October, offering institutional and accredited investors exposure to its governance token (AAVE) through a traditional investment vehicle. Uniswap Labs announced Unichain, a decentralized Layer-2 blockchain built with Optimism’s OP Stack, aimed at enhancing transaction speed, reducing costs, and improving cross-chain interoperability, with plans for a mainnet launch in 2025. Meanwhile, MakerDAO rebranded to Sky as part of its Endgame Plan, introducing new governance (SKY) and stablecoins (USDS), autonomous “Sky Stars,” deflationary tokenomics, and a roadmap for a complete transition from MKR to SKY tokens.
- Trends to Watch in 2025 • AI and Blockchain Integration: The convergence of artificial intelligence and blockchain is poised to transform identity verification, predictive analytics, and smart contract automation, while also addressing potential negative impacts of AI. • Regulated Crypto Hubs: Regions like Hong Kong, Dubai, and Singapore are establishing themselves as crypto-friendly innovation centers, attracting both startups and institutional investors. • Cross-Chain Interoperability: Cross-chain protocols will take center stage, facilitating seamless asset transfers and collaboration among various blockchain ecosystems.
- Developer Highlights: 2024 in Figures The Electric Capital Developer Report: This report showcased a sustained increase in blockchain development, with a 35% rise in active developers. Ethereum, Solana, Polkadot, Base, and Polygon led the charge, demonstrating their robust developer communities. Solana emerged as the top choice for new developers, attracting 7,625 newcomers in 2024