Leader of EY’s Blockchain section states that “2022 is all about Ethereum”

Category: Blockchain Crypto
Posted by
Ravindu Dabarera

Paul Brody, EY’s own leader of Blockchain and DLT services, recently argued that “2022 is the year of Ethereum” in an op-ed piece for CoinDesk

Brody, who is tasked with “EY initiatives and investments in blockchain technology across consulting, audit and tax business lines” is no stranger to emerging technology. Holding leadership positions in a number of areas including IoT, supply chain operations and business strategy, it would be quite the understatement to say that his opinion holds weight in the chaotic world of the Blockchain.

His argument is based on the grounds that “just about everything innovative and important happening in the world of blockchain right now is happening in the Ethereum ecosystem” with him isolating three main trends that are going to fundamentally empower the Ethereum ecosystem.

With the rise of DAO and DeFi, will Ethereum be the bedrock of the future of global finance?

The first of these is the argument that “decentralized autonomous organizations (DAOs) represent the future of how communities, missions and enterprises are converging in a single format.” This evolution in the organization of communities has existed for some time but Brody argues that 2022 will be the year that, due to a wide variety of reasons, DAO’s will become the go-to format for the creation of new entities.

The second factor will be the convergence of DeFi and its adoption into mainstream finance. Brody argues that in 2022 we will “see the emergence of some decentralized identity management components that add a layer of know your customer (KYC) to DeFi, as providers work to meet regulatory requirements without adding centralization.” This would allow regulation to tackle the more concerning aspects of DeFi without altering its founding principles of transparency and decentralization.

The third and final factor relates to Ethereum’s nature as a Layer 1 network, leading to it becoming the primary blockchain “that is used for other blockchains (layer 2 networks) to interact with each other.” Therefore, any dividend from the projects that are built on the Ethereum ecosystem inevitably strengthen said system.

Elaborating on which Blockchain projects will be the winners of 2022, Brody argues that “the first big winner is the Ethereum ecosystem itself.” Regardless of whichever Layer 2 program built on Ethereum will be the most successful, their success invariably feeds into the success of the Ethereum ecosystem as a whole with “the absolute dominance of Ethereum in both developer skills and participating capital is hard to argue.”

Brody continued by arguing that the second winner of 2022 will be “the Ethereum-ecosystem native market leaders, especially in DeFi and DAOs, and non-fungible tokens (NFTs),”

The third and final winner of the year will be “regulators.” This is due to the fact that “the intense regulatory focus on stablecoins and DeFi signals what are likely to be very positive changes in the year ahead.”

With 2022 building upon the call for a harmonized global policy on cryptocurrencies and Blockchain projects last year, we may begin to see Ethereum rise to the top.

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