11 Predictions For Tezos In 2021

  1. Tezos will reach 1/2 of Ethereum’s marketcap. There are only two competitors in the smart contracts platform space: Tezos v. Ethereum. The problem with all the other smart contract platforms is that they are either clones of Ethereum’s smart contract language and use the Ethereum Virtual Machine (such as Polkadot and Tron) or their technology does not yet exist(Cardano). Tezos has bespoke smart contract languages and uses the Tezos Virtual Machine. It has built the stack from the ground up to optimize for formal verification and other advantages — this would not be possible if it took the easy route like so many other chains and was a copy paste version of Ethereum. These advantages will become more and more apparent as we travel into 2021 and at some point the winds of fortune will lift the Tezos marketcap to 1/2 of Ethereum’s.

2. Polychain will buy back their tez stake at a much higher price. Olaf has sold nearly all his tez at the time of writing (12/31/20). He has been a great Tezos community member, leading the fight to oust the evil troll Gevers, and heroically joining the Tezos Foundation at the darkest hour. He has been the biggest baker in Tezos aside from the foundation. However, for whatever reason he lost faith in the chain and dumped the hell out of his tokens. This while keeping his stake in Polkadot which is a copy paste chain of Ethereum. Polkadot’s flagship technology parachains are not connected, and the economics that tie it together are fuzzy to say the least. As the virtues of Tezos gain luster in 2021 and the shiny new object status of Polka fade and it is seen for what it is (a redundant Ethereum clone that is not needed now that Ethereum has layer 2 tech) Olaf will look at Tezos with longing eyes. Eventually he will break and buy back; but the price will be much higher because it will no longer be a contrarian bet (as it is now).

3. Tezos privacy tech will lead to the first Tezos unicorn. Tezos privacy technology is being underestimated. People should only have to look at Ethereum to see the value that synergy can provide; interconnected systems create a positive value loop where the whole is greater than the sum of the parts. Folks may believe that Zcash technology is merely being added to Tezos and that that is no big deal. However, they fail to grasp it is not merely being added it is being optimized. Sapling on Tezos has been in the works for a long time; the reason it was not rushed in was so that it could be included in an optimal manner. Think synergy!

Privacy technology is not helpful if it is too expensive to use, but if — (and here is where the sweat equity comes in) — if those costs can be brought down greatly then you have just massively expanded your use cases — some of which are even potentially unknown. Network effects in crypto (and elsewhere) often form when something is brought first to market. Bitcoin first to market. Litecoin second to market. What is the difference between them? Not much. Litecoin settles faster and has twice as many tokens. But they are pretty much exactly the same, except Bitcoin was first to market. You get a crypto following when you are first to market. And if you want to build cutting edge privacy contracts that are functional (because they are economical) for the foreseeable future they will have to be built on Tezos (post Edo which is Feb 2021). This will unleash an explosion of creativity on Tezos. Most of these applications will be failures. But at least one of them will be a unicorn and it will arrive in 2021.

4) Arthur Breitman’s Checker will release and it will consume 8% of tez. Arguably the single most important part of Ethereum (even though it is widely maligned) is Makerdao. Maker’s dai is literally what makes defi possible (the other pieces being oracles and decentralized exchanges). Defi has allowed Ethereum to catch lightning in a bottle for a second time (the first time being smart contracts and ICO’s). Arthur has wisely decided to build this foundational piece of technology on Tezos.

Previously he stated that you would be able to continue staking while providing collateral. This will give Tezos a leg up on Ethereum defi. You will be able to collect about 5% on your Tez before you even collateralize it and create a stablecoin with it; that stablecoin will then be able to enter the Tezos defi space and create further yield. Due to this advantageous state of affairs the Checker system will become hugely popular and a massive amount of tez will be used as collateral, reaching as high as 8% of the total supply. (I believe the highest Makerdao ever consumed of ether was 2%.)

5) Tezos defi will explode in popularity and hundreds of VC’s will enter the Tezos ecosystem. Defi investment is booming on Ethereum. VC’s have yet to circle Tezos and pester its developers. But that will change as the foundational defi pieces of Tezos all reach mainnet which are (1) oracles (2) decentralized exchanges and (3) decentralized robocoins — Checker in particular. With the trifecta of necessary defi building blocks available for permissionless use on dapps the Tezos defi space will explode and the VCs will swoop in, reaching a feeding frenzy pitch of funding intensity.

6) Tezos will shed its culture of avoiding “pointless” tokens. The crypto thot-leaders have long held that many tokens are superfluous and will go extinct. And indeed Tezos has often declared that it would strive to use tez whenever possible and not create “pointless” tokens. However as time passes it becomes apparent that tokens are valuable for many reasons other than their onchain crypto-economic characteristics. Perfect is the enemy of good and this seems to be the case with tokens in particular. Also, think economic freedom — folks should have the freedom to buy whatever they want even if it is so called “pointless.” For some it is the power of the meme (think Chainlink with its swelling marketcap and no current use for its token) and for others it is the ability to build a community and to fundraise for a project. All in all, when the abacus is tallied, these “pointless” tokens provide value for the baselayer token. Also, you never know what is going to be the next big idea — so all ideas should be welcomed, and many ideas would not exist were it not for the token motivating the development. Tokens took a break as the SEC cracked down on ICO’s but with defi and yield farming they are back. Soon tokens will be flourishing on Tezos and tez will be the stronger for it (even if many of the tokens are so-called “pointless”).

7) Tezos India will emerge as the single most important community. The Tezos stack is ready for prime-time and SmartPy makes it easy for anyone to get involved. Developers will join the Tezos ecosystem from far and wide but the brightest star will emerge in India. The Tezos India community has already shown they are full of entrepreneurial ideas and possess the chops to produce left and right. This trend will increase in 2021 and Tezos India will introduce thousands of talented developers to the Tezos ecosystem.

8) Arthur and Kathleen Breitman will become billionaires. The combination of Bitcoin appreciation, Tezos exponential growth, and Checker domination will send the Breitmans into the vaulted status of crypto-billionaires.

9) Coinbase will list a Tezos STO. Coinbase will be a publicly traded company. They will be looking for new avenues of growth. The STO market will appeal to them due to its regulated nature. Tezos with its focus on formal verification and smart contract safety will be a natural fit for this nascent market.

10) Gevers will attempt a comeback and Reuters will provide favorable press. We have not seen the last of Gevers. He will try some sort of money-making scheme in 2021. Whatever it is, Reuters will have his back and promote it.

11) Tezos will reach 1000 tx per second and it will be badly needed. Tenderbake will launch in 2021 and it will catapult Tezos transactions per second to 1000+. Some other chains will scoff and say “But we have a million tx per second”. But what they will not have done is maintained the decentralization and composability (ability of smart contracts and dapps to interconnect) of the baselayer. Tezos with Tenderbake will have maintained both decentralization and composability and all the defi that has been built-up will seamlessly continue working together like a well oiled machine. Because there has been such a defi boom on Tezos the 1000 tx per second that Tenderbake will provide will be badly needed.

Disclaimer: These are predictions and I have absolutely no idea if any of them will actually happen. I am long tez, mkr, and eth.

crypto-trader.