7 Pillars of Crypto in 2021 - A Look at DeFi, SoFi, and Legislative Regulation

Trends in Blockchain and Cryptocurrencies are changing incredibly fast. We can express every year as the blossom of some new thing: 2017 - ICO, 2018 - IEO, 2019 - Stablecoins, 2020 - DeFi. Often trends conquer the market in literally a month, but their history and conceptual development can last years in the shadows for a wide audience.

To keep up-to-date with all that variety, I want to share my opinion on what's worth paying attention to in 2021. And one more thing: Let's stay away from the tips on trading and predicting the price of Bitcoin or other cryptocurrencies. After all, we're here for the technology, right?

Since 2016 there have been rumors and opinions that many states will start switching to CBDCs (central bank digital currencies) very soon.

However, it was not until 2020 that it became clear that the world was closer than ever to such a transition. First of all, the pace of the race was set by China, as I wrote about not long ago. Meanwhile, China has already begun testing its e-currency with the general public. Many countries have announced that they are preparing their public e-money developments.

It is unlikely that we will see an instant abandonment of fiat money anytime soon. Still, in 2021 the race between countries will continue with renewed vigor, and maybe we will hear about interesting new projects on various blockchains.

The year 2020 is remembered for the cancellation and postponement of most cryptocurrency events and conferences due to the pandemic. Some of them went online, but it's an entirely different experience not capable of conveying the full range of offline event opportunities.

So what will happen with conferences in 2021? First of all, this part of the industry will depend on whether the restrictive measures maintain. Working to ensure antivirus measures is the new security standard for any conference.

I see people's great desire for events. E.g., in 2020, a Blockchain Life forum was held in Moscow during the gap between the coronavirus's first and second waves. More than 3,000 people attended, clearly showing people's desire to attend conferences again despite all the fears.

In 2021, I expect the growth of competition between online conferences and the search for new engaging formats for participants. One way or another, the future is in combining offline and online formats, creating VR/AR platforms that allow the user presence at the event with the comfort of their own home.

2020 was an incredible year for the DeFi industry! In just one year, there was an unprecedented growth of popularity and funds (about $25 billion), mechanisms of staking and farming became explosively popular, and governance tokens and flash loans became the development of decentralization ideas.

2021 will bring even more attention (and funds) to the DeFi market. Despite hacks and troubles with even the top projects, the market remains stable.

The main initiatives are still coming from the Ethereum ecosystem. It is currently making the transition to Ethereum 2.0, which could significantly impact network bandwidth and boost its ecosystem. This year, we should also keep a close eye on competitors on other blockchains.

Decentralized exchanges (DEX) are an essential part of the DeFi market. The year 2020 was a real breakthrough for them as well: hopefully, you too have been following the rise in popularity of Uniswap, 1inch, and other projects.

The trend is only getting stronger: 2021 intrigues with a possible breakthrough in the development of such exchanges through the prism of Ethereum 2.0 and possible alternatives from other blockchains, as well as the birth of the IDO trend.

Recently, I've already published a great piece on NFT tokens. Since then, the beginning of 2021 has brought some big new cases: the creator of "Rick and Morty" sold paintings for $1.65 million in Ethereum, and a rarity cryptopunk sold for $762,000.

I also see a fascinating parallel between the popularity of DeFi and NFT, and how the two technologies come together in NFTfi. This development of technology makes it possible to farm and fractionalize NFT tokens, use them as collateral, etc. I'm also confident that this will make most NFT tokens look like the tokens we're used to in the next couple of years. As a result, the potential of the technology becomes incredibly huge.

The concept of "Social Tokens" or "Social Finance" (SoFi) embraces new phenomena such as popularity tokenization, digital reputation, and decentralized social networks. This market segment is very new but is already attracting the attention of younger crypto users. Independent content ownership, new community motivation systems, digital avatars, and NFT merchandise are just some of the experimental areas where some off-the-shelf products are already available.

Web 2.0 social networks are likely to face serious competition from decentralized products, especially with the recent events surrounding Donald Trump's Twitter and Facebook account bans. This event gave new impetus to the discussion on the regulation of BigTech, social networks, and freedom of speech. It could lead to new social networks based on blockchain, open-source and transparent algorithms, and governance models as in current DeFi projects.

The year 2021 has already been marked by several events related to legislative regulation in the US. E.G., the Office of the Comptroller of the Currency (OCC) within the U.S. Treasury Department allowed national banks and federal savings associations to use public blockchains and stablecoins.

Also, U.S. President Joe Biden declined FinCEN's proposed rules for regulating the cryptocurrency industry.

In many ways, the coming months will provide insight into the new White House administration's cryptocurrency politics.

Also, the current views of regulators in Russia, China, India, Japan, and the EU on the limits and ways of dealing with digital assets remain very important. I wonder how the current legislative and banking system will respond to the new challenges of the cryptocurrency industry (e.g., DeFi or NFT).

Any attempt to talk about new possible trends is a direct effort to trace technology's development and readiness to shoot up across the Gartner cycle. But let's face it, how many of you knew about Andre Cronje in late 2019?