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Cindicator: Defi, Ethereum and DAOs

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@bengy
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Image from Google Play store, press kit for Cindicator

I am really starting to enjoy these big picture crypto questions that are starting to appear in the Cindicator question feed. They really start to test the knowledge of the analysts and go further beyond the daily grind of price predictions which aren't that interesting to start off with!

This last batch dealt mainly with the Ethereum blockchain, and some of the larger protocols and questions that are about to confront the largest altcoin.

Will the Beacon PoW parallel chain go live before the end of the year (well, it actually says go live in Q4, but I'm taking that to mean also including before...)... well, in many ways, Ethereum needs the 2.0 version to start taking root this year. The huge lead that Ethereum has over the other general purpose smart contract/world computer blockchains is currently insurmountable... however, there are newer chains that have less decentralisation of governance, and that will start to erode the lead that Ethereum has... if only due to the fact that their more centralised governance models lead to faster evolution.

So, I think that Ethereum 2.0 NEEDS to happen this year... and I think this will be pushed quite hard.... despite the many problems with ProgPoW and Defi have had in the last couple of weeks. So a 100% affirmative on this one...

Tough to say... I think that 5 central banks could launch this year... but would they be major first world banks... possibly not... with the exception of maybe China who really has the incentive to uproot the USD as the world reserve currency. 100% yes, but with the idea that it won't likely be major economies that do this... except maybe China.

15 million ETH is a huge step up from the current standing at just under 3 million.... the recent week has seen that DeFi is still a very much untested and dangerous space for the wider population to trust. That also goes for smart contracts... after all, the blind trust in code and lack of central authority is recipe for disaster... especially if the users of smart contracts don't actually fully understand the consequences of entering the contracts.

The assumption that people won't game a system that they are invested in (due to holding tokens) is fast being invalidated due to the ability to take loans... and especially flash loans (loans that are repaid in the same on-chain transaction).... meaning that attackers of DeFi smart contracts no longer need a huge financial commitment to begin the attack... in fact, they only need the cost of the Ethereum transaction!

Now, a lot of these problems don't stem from flash loans... but the fact that the Defi contracts that were "attacked" failed in having some pretty bad assumptions in place... such as how many and what types of oracles were feeding them information! In a trustless de-centralised system, it appears that trust is a much more important commodity!

I want DeFi to succeed... but I'm not sure that it is going to reach 15 million ETH... in dollar terms it could exceed what it is doing at the moment, but only through the price appreciation of the ETH token. 0% for this one.

How strong is the lead that Bitcoin has?.... and how shaky will the altcoin space be?.... I don't think that we are going to see the huge amount of Bitcoin dominance that we saw in the last year. As some of the altcoin projects start to reach some sort of semblance of a product, there will be less reason to flee from them as speculative assets.

That said, we will see more and more projects fold... and crypto is at best an irrational market... Miota and the last couple of weeks being one hilariously terrible case of this!

0%...

Yes... I do think that DAOs are going to increase in popularity as a way to fund development. I see it more in the Ethereum space, but I guess that other chains will have their own equivalents if they don't have a central controlling entity. The fact that it is measured in fiat value means that I have more confidence in this... see the ETH DeFi question from above!

100%

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