Ethereum in 2024: A Virtuous Cycle of Applications, Infrastructure, and Community

Ethereum in 2024: A Virtuous Cycle of Applications, Infrastructure, and CommunityEthereum's progress in 2024 can be summarized by three interwoven themes: a thriving application ecosystem, continuously improving infrastructure, and an increasingly mature global community. These three aspects interact to create a virtuous cycle, driving Ethereum's continued growth and development

Ethereum in 2024: A Virtuous Cycle of Applications, Infrastructure, and Community

Ethereum's progress in 2024 can be summarized by three interwoven themes: a thriving application ecosystem, continuously improving infrastructure, and an increasingly mature global community. These three aspects interact to create a virtuous cycle, driving Ethereum's continued growth and development.

I. Applications: An Innovation Platform Meeting Diverse Needs

Ethereum's success stems from its powerful ability to solve real-world problems. Global developers are leveraging Ethereum to build a wide array of applications fulfilling user needs, making it a platform serving numerous use cases.

1. Stablecoins: Enhancing Global Financial Freedom

Stablecoins are a key use case, empowering individuals with the freedom to transact, whether sending money home or saving. The Ethereum ecosystem plays a unique and vital role as the circulation ground for most existing stablecoins. Currently, the number of stablecoins within the Ethereum ecosystem is sufficient to rival major payment processing networks like Mastercard and Visa.

Bitso, for example, leverages stablecoins on Ethereum to provide faster and cheaper remittance services in Latin America. Pintu utilizes stablecoins to offer better savings products for Indonesian users. These examples demonstrate how stablecoins improve the lives of millions, enhancing the inclusivity and efficiency of global finance.

2. DeFi: The Decentralized Force Redefining Finance

Ethereum is also the birthplace of DeFi (Decentralized Finance). Its unique properties enable the construction of censorship-resistant, decentralized financial products, giving individuals greater control over their funds. Currently, approximately 60% of DeFi application value is stored on Ethereum or its Layer-2 networks.

EthicHub is another successful example of a DeFi application, providing funding to small businesses like coffee producers by connecting small business owners in Mexico with lenders, thus fostering business growth. Countless other DeFi applications are thriving on Ethereum, delivering tangible benefits to users globally.

3. Emerging Applications: Leading Innovation, Expanding Boundaries

Beyond stablecoins and DeFi, new applications continue to emerge on Ethereum. For example, social networks like Farcaster, Lens, and Zora empower users with control over their identity and data; emerging games such as EVE Frontier leverage smart contract technology to provide players with novel gameplay experiences and autonomous systems; decentralized identity systems like ENS and AnonAadhaar offer users more choices, breaking free from the limitations of centralized identities; and real-world infrastructure projects like Glow utilize Ethereum to incentivize renewable energy development, such as hundreds of solar power plants.

Prediction markets have also made breakthroughs, with successful examples from Polymarket and the Polygon team showcasing the potential of on-chain open systems. The transition of Polygon PoS to Ethereum validation further injects new vitality into the Ethereum ecosystem's development.

Ethereum's value lies in its ability to serve as a platform for bringing creativity into production, translating concepts from academic research into practical applications, such as the successful implementation of quadratic funding. These examples fully demonstrate Ethereum's powerful role as an engine of innovation.

4. Ethereum: The Developer's Platform of Choice

In 2024, Ethereum has become the preferred platform for developers within the crypto ecosystem. This is largely thanks to its well-developed developer tool ecosystem, providing developers with everything they need to build, deploy, and scale applications. From mature use cases (like currency, stablecoins, DeFi) to emerging applications, Ethereum exhibits vibrant life.

II. Infrastructure: Building a Secure and Scalable Network

Ethereum's application layer rests on robust infrastructure, including Ethereum Layer-1 and Layer-2 networks. In recent years, the Ethereum ecosystem has invested heavily in improving its infrastructure, striving for a secure and scalable blockchain network.

1. Layer-2 Networks: Expanding Ethereum's Capacity and Efficiency

Ethereum Layer-2 networks (e.g., Arbitrum and Optimism) are crucial for enhancing network capacity and efficiency. They are built on top of Ethereum Layer-1, expanding its "surface area," reducing transaction costs, and increasing transaction speeds.

The success of Layer-2 networks is evidenced by three key factors: first, widespread adoption, with transaction volume and locked value rapidly increasing; second, developers leveraging the customizability of Layer-2 networks to provide tailored environments for different use cases and needs; and third, the adoption by institutions and enterprises, bringing their communities into the Ethereum ecosystem and further promoting Ethereum's decentralized growth.

Some previous Layer-1 projects have even chosen to transition to Ethereum Layer-2, highlighting the attractiveness of Ethereum's security and community advantages.

2. Future Developments: Finality and Interoperability

Despite the significant progress of Layer-2 networks, there's still room for improvement. Key tasks include achieving "finality" on Layer-2 networks for greater security and decentralization, and enhancing interoperability and user experience, such as simplifying cross-Layer-2 transfers and providing more user-friendly interfaces.

The ecosystem is actively working to address these challenges, for example, by verifying L2 through light clients and building addresses usable anywhere. These efforts will make the Ethereum ecosystem more user-friendly and interoperable.

III. Community: A Globalized, Maturing Ecosystem

The scale and diversity of the Ethereum community are impressive. It spans the globe and encompasses a wide range of roles, including application users, ETH holders, developers, researchers, stakers, and artists.

The internationalization and maturity of the Ethereum community are significant characteristics. Active communities and developers contributing to the Ethereum ecosystem are emerging worldwide. In recent years, the Ethereum community has not only grown in size but also matured, recognizing that Ethereum's development is a long-term process.

Community members are building lasting organizations and companies, nurturing the next generation of talent, and preparing for Ethereum's long-term growth.

IV. The Virtuous Cycle: Engine of Continued Growth and Development

Ethereum's success lies in the virtuous cycle created between its applications, infrastructure, and community. Thriving applications drive network growth, which in turn tests and drives infrastructure improvements. Improved infrastructure further fuels the development and adoption of new applications, attracting more users and developers to the community, forming a positive feedback loop of continuous growth and development.

However, Ethereum also faces challenges and requires continued improvement and development. But this is precisely Ethereum's strength: because it has gone the furthest, it is able to be the first to face and solve these problems.

In conclusion, Ethereum's progress in 2024 is inspiring. Its ever-growing application ecosystem, continuously improving infrastructure, and increasingly mature global community together constitute a vibrant ecosystem, driving Ethereum forward and continuing to deliver value to users globally.