This special edition of Protocol looks at innovative developments in 2024 and looks ahead to what the coming year may bring for blockchain technology.
Let’s dive into the milestones, trends, and predictions that are shaping the next era of crypto.
This article was featured in the latest issue of The Protocolour weekly newsletter exploring the technology behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday.
1. A Look Back: Top Crypto Tech Milestones of 2024
Ethereum Duncun Upgrade: 2024 marks Ethereum’s most important network upgrade yet. Ethereum has activated the Cancun-Deneb (Dencun) upgrade, a landmark improvement designed to enhance scalability and reduce data fees, marking an important step in the evolution of the network. Duncan introduced proto-dankshardinga mechanism that aims to reduce costs for Layer-2 rollups by simplifying data availability and improving transaction throughput. Things change, though much debatedwhich aims to benefit developers and pave the way for further innovations in Ethereum’s roadmap, cementing its position as the leading smart contract platform.
Solana Locks in Value: Solana’s DeFi TVL reaches $9 billion in total value locked (TVL) for the first time in three years, with its DeFi ecosystem experiencing further growth. This success reflects higher user engagement and the expansion of decentralized applications on the platform. This growth has been helped significantly by institutional adoption and key integrations. Like financial giants Franklin Templeton and Société Générale used Solana for tokenized asset projects. Solana also expanded its reach to Robinhood adding SOL on its trading platform and Cboe Global Markets files for Solana-related ETFsindicating increased confidence in its infrastructure.
The Warning Bell of Quantum Computing: Google’s advances in quantum computing, especially its revolutionary quantum chip, raised alarms within the crypto community about potential blockchain security threats. The chip’s ability to solve problems beyond the reach of classical computers has once again diversified debates about Bitcoin’s reliance on traditional encryption methods and the broader implications for the crypto ecosystem. Experts have emphasized the urgency of moving to quantum-resistant encryption to safeguard cryptocurrencies against future vulnerabilities. While current quantum computers are not yet capable of compromising blockchain networks, Google’s progress is being emphasized the need for proactive measures to ensure the long-term security and stability of digital assets.
Layer-2 Adoption Soars: Layer-2 adoption has skyrocketed as projects like Arbitrum, Optimism, and Base have played key roles in addressing Ethereum’s scalability challenges. Arbitrum continues to dominate the Layer-2 ecosystem, crossing 1 billion in transactionsdriven by its strong developer support and DeFi integrations. The optimism continued expand its influence with its OP Stack technologywhich enables modular Layer-2 solutions and promotes collaboration across the ecosystem through its integration with Optimism’s Superchain. Base, a Layer-2 incubated by Coinbase, gained significant traction as it leveraged Coinbase’s vast user base and on-ramp, with Franklin Templeton becoming the first asset manager to launch a tokenized treasury fund on the network.
DeFi Leaders Innovate: Aave became the focus of a new fund launched by Grayscale Investments in October, giving institutional and accredited investors exposure to its management token (AAVE) through a traditional investment vehicle; Uniswap Labs Unichain announceda decentralized Layer-2 blockchain built with Optimism’s OP Stack, designed to improve transaction speed, reduce costs, and improve cross-chain interoperability, with plans for a 2025 mainnet launch; and MakerDAO rebranded to Sky as part of its Endgame Plan, the introduction of new governance (SKY) and stablecoins (USDS), autonomous “Sky Stars,” deflationary tokenomics, and a roadmap for a full transition from MKR to SKY tokens.
2. Emerging Trends for 2025
- AI x Blockchain: The integration of artificial intelligence and blockchain is set to revolutionize identity verification, predictive analytics, and smart contract automation — and, hopefully, reduce the negative effects of AI.
- Regulated Crypto Hubs: Jurisdictions such as Hong Kong, Dubai, and Singapore are positioning themselves as crypto-friendly innovation centersattracting startups and institutional investors.
- Interoperability is in the Middle Stage: Cross-chain protocols will dominate developmentwhich enables seamless asset transfer and collaboration between blockchain ecosystems.
3. Developer Spotlight: 2024 in Numbers
Electric Capital’s Developer Report: The report highlighted continued growth in blockchain development with a 35% increase in active developers. Ethereum, Solana, Polkadot, Base, and Polygon lead the pack, showcasing their strong developer communities. Solana is the biggest draw for new developers, bringing in 7,625 new developers in 2024, surpassing Ethereum. Solana’s appeal, driven by its low fees, fast transactions and many memecoinspositioning it as a formidable competitor in the smart contract arena.
4. What to Watch in 2025
- Ethereum Pectra Upgrade: of Ethereum upcoming Pectra upgrade has been split into two phases, Prague and Electra, to ensure a smoother rollout of key improvements to the consensus and implementation layers. The stage of Electra will improve validator efficiency, strengthen network security, and introduce improved mechanisms for managing validator releases.
- Scaling Solutions: ZK-rollups and modular blockchains will be created drive the next wave of scalabilityensuring smoother user experiences. Zero-knowledge proofs are emerging as a transformative technology, enabling improved privacy and efficiency while paving the way for a future where blockchain networks can scale seamlessly without compromising decentralization.
- Decentralized Identity: The increase of decentralized identity solutions can redefine how users interact with Web3 platforms, emphasizing privacy and ownership. These systems use blockchain technology to give users control over their personal data, allowing them to verify their identities without relying on centralized authorities.
5. Final Thoughts
2024 sets the stage for crypto’s next chapter, with breakthroughs in scalability, DeFi, and security shaping a transformative year ahead.
