Some highlights from The Year in Ethereum 2021 report by Evan Van Ness and Josh Stark.
Earlier this week, Evan Van Ness of Starbloom Ventures and Josh Stark of the Ethereum Foundation released an Ethereum year-end report, The Year in Ethereum 2021, diving into activity on the network last year. Here are some of the report’s most promising developments and trends within the current Ethereum ecosystem.
Demand for blockspace on Ethereum skyrocketed during 2021, with $9.9 billion in transaction fees being paid throughout the year. Since fee per transaction is vastly different chain to chain, the metric is not great for comparing usage on layer 1s and 2s, but it does provide insight into how eager users were to access DeFi, NFTs and DAOs.
On basically every metric, Ethereum showed adoption: total value locked in DeFi, active addresses on the network, OpenSea volume and application developer activity all grew exponentially.
More important, the report highlighted that Ethereum is no longer a one-chain ecosystem. In order to achieve scalability, the Ethereum community will need to offer layer 2 technologies capable of handling transactions from billions of users. 2021 proved to be the first step in experimentation with both optimistic and zero knowledge proof rollups, and the two finally began to take significant market share in daily transactions away from Ethereum L1.
As a technology, Ethereum and other smart contract chains have proved to be an exciting and profitable platform for creators and developers to build and share their work. DeFi developers have created billions of dollars in value by building financial products open and accessible to the world, and artists have found amazing success with creating digital, liquid art in the form of NFTs. That being said, Ethereum’s “creator economy” is competing with top platforms like YouTube, Spotify and OnlyFans, delivering $3.5 billion in earnings to those building on top of the network.
The report also focused on the technical state of the network, diving deep into the pending transition to proof-of-stake, EIP 1559’s effect on the network and the issue of client diversity on the Beacon Chain.