Crypto Industry Braces for Layer 1 Wars, Token Revamps, and App Surge in 2020

In a year-end interview for The Breakdown, Tom Shaughnessy, co-founder of Delphi Digital, and Jordan Clifford, managing director of Scalar Capital, discuss key trends in the cryptocurrency industry. Shaughnessy highlights the growth of Layer 1 smart contract platform wars and token economic design, while Clifford predicts a shift back to development at the application layer.

Cryptocurrency Industry Anticipates a Pivotal 2020 Marked by Layer 1 Wars, Token Economics, and Application Layer Development

December 31, 2019

Industry experts Tom Shaughnessy, co-founder of Delphi Digital and host of the Chain Reaction podcast, and Jordan Clifford, managing director of Scalar Capital, recently shared their insights on the anticipated trajectory of the cryptocurrency industry in 2020.

Quiet Building in 2019, Fireworks in 2020

According to Shaughnessy, the notable aspect of 2019 was the "quiet" building that took place behind the scenes. However, he believes that 2020 will be a year of significant developments and fierce competition.

Escalating Layer 1 Wars

Shaughnessy predicts a heated battle among Layer 1 smart contract platforms. These platforms, such as Ethereum, Tezos, and Polkadot, provide the infrastructure for decentralized applications to operate. With heightened competition, developers may be enticed by platforms offering faster transaction processing, lower fees, or enhanced security.

Token Economics: A Growing Priority

The design of token economics, which governs the supply and distribution of cryptocurrency tokens, will become increasingly important in 2020. Clifford anticipates that projects will prioritize token economics that incentivize long-term participation and reduce volatility. This shift will likely stem from the recognition that well-designed token economics can contribute to the success and sustainability of cryptocurrency projects.

Application Layer Development

Clifford foresees a move back towards development at the application layer, away from the focus on protocol development that characterized the early years of the industry. This indicates a shift towards the creation of tangible applications that address real-world problems and cater to user needs.

Outlook for 2020 and Beyond

The insights provided by Shaughnessy and Clifford suggest that 2020 will be a year of intensified competition, technological advancements, and a renewed focus on practical applications. The cryptocurrency industry is poised to mature and expand, with the potential to reshape industries and create novel solutions for various sectors.

As the industry matures, regulatory frameworks and governance mechanisms will also evolve, shaping the trajectory of the cryptocurrency ecosystem. It remains to be seen how these factors will interplay and influence the future of this rapidly evolving industry.