Author: Benjamin Schiller, CoinDesk; Compiler: Tao Zhu, Golden Finance

This article reviews the breakthrough developments in 2024 and looks forward to the possible development trends of blockchain technology in the coming year.

Let’s take a closer look at the milestones, trends, and predictions shaping the next era of cryptocurrency.

Ethereum’s Duncun Upgrade: Ethereum in 2024 ushered in the most important network upgrade to date. Ethereum has launched the Cancun-Deneb (Dencun) upgrade, a landmark improvement designed to increase scalability and reduce data charges, marking a key step in the network's evolution. Duncun introduced proto-danksharding, a mechanism designed to reduce the cost of Layer 2 aggregation by simplifying data availability and increasing transaction throughput. These changes, while highly controversial, are intended to benefit developers and pave the way for further innovation on the Ethereum roadmap, solidifying its position as the leading smart contract platform.

Solana Value Locked: Solana’s DeFi TVL reached $9 billion in total value locked (TVL) for the first time in three years, and its DeFi ecosystem is experiencing further growth. This achievement reflects increased user engagement and the expansion of decentralized applications on the platform. Institutional adoption and major integrations have contributed significantly to this growth. Financial giants such as Franklin Templeton and Societe Generale leverage Solana for tokenized asset projects. Solana has also expanded its reach, with Robinhood adding SOL to its trading platform and Cboe Global Markets filing for a Solana-linked ETF, signaling growing confidence in its infrastructure.

Quantum computing wake-up call: Google’s advances in quantum computing, particularly its revolutionary quantum chip, are sounding alarm bells in the crypto community about blockchain Potential threats to chain security. The chip's ability to solve problems that traditional computers cannot solve has reignited debate over Bitcoin's reliance on traditional encryption methods and the broader impact on the crypto ecosystem. Experts stress the need to transition to quantum-resistant encryption to protect cryptocurrencies from future vulnerabilities. While current quantum computers are not yet capable of disrupting blockchain networks, Google’s progress highlights the need for proactive measures to ensure the long-term security and resiliency of digital assets.

Layer 2 adoption surges: Layer 2 adoption surges as projects like Arbitrum, Optimism, and Base play key roles in solving Ethereum’s scalability challenges. Arbitrum Continues to Dominate Layer 2 Ecosystem, Transaction Volume Breaks1 billion, thanks to its strong developer support and DeFi integration. Optimism continues to expand its reach with its OP Stack technology, which enables modular layer 2 solutions and facilitates collaboration across the ecosystem through integration with Optimism’s HyperChain. Base, a Layer 2 project incubated by Coinbase, leveraged Coinbase’s extensive user base and on-ramp to gain significant traction, with Franklin Templeton becoming the first asset manager to launch a tokenized treasury fund on the network.

DeFi leaders innovate: Aave becomes the focus of a new fund launched in October by Grayscale Investments, offering its governance token to institutional and accredited investors through traditional investment vehicles (AAVE) investment opportunities; Uniswap Labs announced the launch of Unichain, a decentralized Layer-2 built on Optimism’s OP Stack The blockchain, which aims to increase transaction speed, reduce costs and improve cross-chain interoperability, plans to launch the mainnet in 2025; as part of its Endgame Plan, MakerDAO changed its name to Sky and launched new governance (SKY) and stability (USDS), autonomous “Sky Stars”, deflationary token economics, and a roadmap for a full transition from MKR to SKY tokens.

AI x Blockchain: The convergence of artificial intelligence and blockchain will revolutionize identity verification, predictive analytics, and smart contract automation—and hopefully reduce the negative impacts of artificial intelligence.

Regulated Cryptocurrency Hubs: Jurisdictions such as Hong Kong, Dubai and Singapore are positioning themselves as crypto-friendly innovation hubs, attracting startups and institutional investors.

Interoperability becomes the focus: Cross-chain protocols will lead development, enabling seamless asset transfer and collaboration between blockchain ecosystems.

Electric Capital Developer Report: This report highlights the continued growth of blockchain development, with a 35% increase in the number of active developers. Ethereum, Solana, Polkadot, Base, and Polygon lead the way, showcasing their strong developer communities. Solana is the biggest attractor of new developers, attracting 7,625 new developers in 2024, surpassing Ethereum. Solana’s appeal stems from its low fees, fast transactions, and numerous memecoins, making it a strong competitor in the smart contract space.

Ethereum’s Pectra upgrade: Ethereum’s upcoming Pectra upgrade is divided into two phases, Prague and Electra, to ensure a smoother rollout of key improvements to the consensus and execution layers. The Electra phase will increase validator efficiency, enhance network security, and introduce improved validator exit management mechanisms.

Scaling solutions: ZK-rollups and modular blockchains will drive the next wave of scalability, ensuring a smoother user experience. Zero-knowledge proofs are emerging as a transformative technology that enhances privacy and efficiency while paving the way for a future where blockchain networks can scale seamlessly without compromising decentralization.

Decentralized Identity: The rise of decentralized identity solutions may redefine how users interact with Web3 platforms, emphasizing privacy and ownership. These systems leverage blockchain technology to give users control over their personal data, allowing them to verify their identity without relying on a centralized authority.

2024 sets the stage for the next chapter in cryptocurrency, with breakthroughs in scalability, DeFi, and security shaping the years of change ahead.