Several potential directions and goals for blockchain development in the next five years
TechFlow Selected TechFlow Selected
Several potential directions and goals for blockchain development in the next five years
The main theme of the future should be the rise of stablecoins, the tokenization of existing assets, and the deepening of privacy protection.
Navigating Web3 tides with focused insightsBy Huang Shiliang
The blockchain industry has been somewhat sluggish lately—not just in price, but more concerningly, the broader blockchain community seems to have lost its direction.
One of the longest and most heated debates on X this year has been whether meme coins are legitimate or not, with Vitalik Buterin, major VCs, and KOLs all joining the fray.
The core arguments split into two camps: one side sees memes as noise or even harmful to blockchain; the other believes memes embody the true spirit of cryptocurrency and blockchain.
Another major focal point is how institutions like the Federal Reserve, SEC, and Wall Street have become central to crypto discourse. Regardless of whether crypto's original intent was to oppose these entities, the fact that the entire industry now orbits around them suggests a loss of independence—almost willingly turning into a policy tool of the U.S. establishment.
I don't wish to dive into the right or wrong of these two debates. I'm merely using them as evidence that the broader blockchain community appears to have lost its way, getting bogged down in trivial disputes.
Years ago—around 2016—Bitcoin scaling dominated nearly every discussion in the blockchain space. Meanwhile, Ethereum quietly matured and delivered some of the most transformative innovations in blockchain history: smart contracts, DeFi, Rollups.
In hindsight, the Bitcoin scaling debate wasn’t truly significant—it was just a minor episode along the development path. The real main storyline during those years was the rise of smart contracts and DeFi.
Similarly, I believe today’s intense focus on meme coins and obsessing over the Federal Reserve are also just side episodes. The real main narrative lies elsewhere.
I see three major directions for the industry—goals that are highly likely to be achieved within the next five years.
1. Stablecoins will play a critically important role in global economic activity. If I had to put a number on it:
a) Total stablecoin supply will exceed $1 trillion;
b) Stablecoin transaction volume will account for 10% of global trade settlements.
On-chain stablecoins are simply too useful—they combine the strengths of both blockchain and fiat money while eliminating key weaknesses of fiat.
Their biggest advantage is efficiency, far surpassing traditional bank transfers—especially across borders, where on-chain stablecoins are essentially unbeatable.
Transaction costs with stablecoins are also significantly lower than with fiat.
And there’s the No-KYC aspect, though that’s admittedly politically sensitive.
I’d argue that in international trade, stablecoins are over ten times better than fiat currencies.
On one hand, total stablecoin supply will grow dramatically—reaching $1 trillion within five years should be feasible.
On the other, the variety of stablecoins will expand, likely mirroring existing major global trade currencies. Beyond dollar-dominated stablecoins, we’ll see euro, RMB, pound, yen, and others.
This is a goal well worth pursuing for the blockchain industry.
2. Another major growth area over the next five years will be the tokenization of real-world assets (RWA)—bringing stocks, funds, bonds, insurance, and other products currently traded on traditional exchanges onto the blockchain.
Just as BTC and ETH have ETFs, I think instead of calling this RWA, we might better describe it as "reverse ETFs" for stocks and bonds.
BTC and ETH ETFs take on-chain assets and make them tradable on traditional exchanges. Stock tokenization could use a similar ETF mechanism—but in reverse: stocks are held by a custodian fund, which then issues corresponding tokens on-chain.
On-chain assets offer advantages over traditional exchange-traded assets by an order of magnitude.
Assets on-chain can thrive within DeFi ecosystems.
Stocks have existed for centuries but suffer from inherent limitations—for most people, owning stock only means selling it at a higher price later. Stocks lack utility. Solving this requires external innovation, and blockchain is one powerful force that can help.
Crypto tokens can participate in various DeFi mechanisms—users can mint LP tokens to earn trading fees, or deposit tokens into lending pools to earn interest.
When was the last time you lent out your stocks to earn interest?
Honestly, after experiencing blockchain, the current stock exchange model feels completely outdated.
Nasdaq should launch its own rollup on Ethereum and build a decentralized Nasdaq DEX.
3. The third major direction—and an urgent one—is strengthening privacy protection.
Blockchain has taken transparency to the extreme, but that creates serious privacy challenges.
With the arrival of ETFs, the entire industry is increasingly aligning with U.S. interests. Blockchain risks becoming merely a tool of the U.S. dollar, with American law enforcement potentially gaining full visibility into on-chain activity. Features promised to users—decentralization, censorship resistance, permissionless access—could be forcibly stripped away under dollarization.
One path forward is zero-knowledge (ZK) proofs, a strength of the Ethereum ecosystem.
But subjectively, I feel Ethereum's commitment to privacy has grown increasingly half-hearted. Today, ZK is mainly used for Rollups—which isn't about privacy. True privacy use of ZK would involve hiding or obfuscating transaction details, making transactions harder to trace and less transparent.
Since the Tornado Cash crackdown, no project in the Ethereum ecosystem has truly stepped up to champion privacy. Instead, compliance with censorship is growing—take MakerDAO’s DAI, which evolved into Sky’s USDS with built-in blacklist functionality.
Another privacy direction stems from the UTXO model, exemplified by Bitcoin. Overall, UTXO offers better privacy than Ethereum’s account-based model. To date, there’s still no known UTXO blacklisting technology.
Privacy is a top priority for Bitcoin Core developers, but their conservatism also results in weak programmability—no native support for tokenization or DeFi.
We frequently see various asset issuance schemes and Layer 2 solutions emerge in the Bitcoin ecosystem aiming to boost programmability. This shows strong community demand, but so far, no truly decentralized solution has emerged.
Among other UTXO chains, only BCH’s ecosystem shows willingness to develop such technologies—offering faint hope. Others like LTC and Doge show no competitive drive at all.
Without tokenization and DeFi, an ecosystem cannot thrive.
Overall, the UTXO camp hasn’t prioritized this challenge. The hope may still lie with Ethereum.
Of these three directions, the only one I’m genuinely concerned about is privacy—currently, there’s simply no strong force pushing it forward.
Stablecoins hitting $1 trillion, the reverse ETF movement—I believe these will inevitably happen within the next five years.
And privacy protection will likely succeed in the end too.
Why? The answer is faith in decentralization.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
