Ethereum has gone from $197.15 on April 28th 2020 to a whopping all time high of $2,715.22 April 28th 2021, which is an increase of 1283.6%. This massive price increase is a result of how Ethereum is able to utilize its smart contract technology to allow Solidity developers to create DEFI dapps (decentralized applications). Ethereum's infrastructure will also be upgrading to Ethereum 2.0 along with a minor upgrade of EIP 1559 in the Summer of 2021. Here, we'll make a case for Ethereum to rocket to the moon in the coming years.
The DEFI summer of 2020 definitely opened Pandora's box for a new distributed financial system that is trustless and permissionless. Investors no longer needed to gain access to massive capital in order to reap the benefits of earning yield on their assets. If someone wanted to take a loan out to increase leverage, Aave is a platform that can now be used to deposit your crypto and take a loan out based on the current market valuation of that collateral. You can also take a flash loan out and increase your leverage on Aave in order to participate in arbitrage opportunities that you have spotted, either manually or through a discovery bot. This type of revolutionary access proves that decentralized finance opens doors for the smaller retail investors and allows them to significantly have more exposure to market price action.
The upcoming EIP 1559, which will stabilize and allow traders to understand gas prices more accurately, is slated to launch in July 2021. EIP 1559 should increase predictability of how much a network fee will cost and this will allow a much smoother experience using the DEFI ecosytem on Ethereum. This will allow Eth to onboard more users and possibly increase its market cap.
Ethereum 2.0, which is expected to go live some point later this year, is also another indication that Ethereum's price will skyrocket since it will enable users that can't afford the high gas fees to also participate. This will open the floodgates to a lot of capital in the Ethereum ecosystem and the price of Ethereum can definitely increase. Ethereum 2.0 shifts from Proof of Work (PoW) to Proof of Stake (PoS), this significantly lowers network fees and also secures the blockchain by distributing the consensus mechanism.
The Beacon chain is the first upgrade in Ethereum 2.0 and allows for staking on Ethereum. Although there's quite an initial investment in order to be a staker on Ethereum, it's a very sound investment - or even an ultra sound investment.
After the beacon chain is launched and staking is live, the next step will be sharding - with a 'd'. Sharding introduces 64 new chains and decreases the hardware requirements in order to run a node. They also massively upgrade the scalability and throughput. Although sharding will be deployed gradually, the benefits will allow Ethereum to become lightening fast with very low gas fees will be available as the first shard is implemented.
The final step is the merge between Eth 1.0 and Eth 2.0 in an even known as docking. The Ethereum main net that is currently used will now be merged with the beacon chain and Ethereum will completely be PoS, instead of the energy intensive PoW. This will allow Ethereum to completely dominate the DEFI space by providing a blockchain that is ultra fast, environmentally green, and very cheap.
Nikhil Shamapant's The Triple Halving is thesis predicting the price of Ethereum by January 1st 2023. In it, he brilliantly lays out the roadmap and bull scenario for Ethereum to reach $30,000 - $50,000 (base) and potentially $150,000 (peak) By January 2023 (Part 6). While, I am no financial advisor and I urge everyone to do their own financial advice, I would agree with Mr. Shamapant's prediction that Ethereum will rocket to the moon in the coming years as more and more people find out about Aave and other Defi products that financially empower them. The advent of decentralized finance coupled with the Ethereum 2.0 and EIP 1559 upgrades will allow Ethereum to have a technically robust infrastructure in order to meet the demands of this revolutionary financial disruption.
