Top U.S.-based banks and financial institutions have filled more than 1,000 positions for crypto experts in the past three years.
According to a Nov. 1 report from Bloomberg, financial institutions are offering significant bonuses to attract crypto talent, with human resource consultant Johnson Associates estimating that crypto positions pay salaries that are between 20% and 30% higher than comparable positions not related to digital currency.
The firm added that many senior crypto roles benefit an up to 50% bump in salary over comparable positions, with managing director Alan Johnson concluding:
“The banks can’t run the risk that their clients go to another bank to do these services, so they need to build up.”
Research firm Revelio Labs analyzed 287 crypto-related hirings from Goldman Sachs, Wells Fargo, Fidelity, and JPMorgan Chase — the four largest employers of digital asset talent on the professional social networking site LinkedIn. Revelio concluded that crypto specialists enjoy a 9% pay rise over their banking co-workers on average.
In October, LinkedIn reported that site-wide job listings for positions relating to crypto and blockchain have jumped 615% since August 2020.
Related:Amazon job posting hints company’s Web Services are preparing to adopt crypto
Bank of America established a dedicated crypto research team in July, with the division’s Alkesh Shah stating: “The industry and the technology became too big to ignore.”
Morgan Stanley also launched a cryptocurrency research team in September, further signalling that top U.S. banks are seeking to attract crypto talent.
It almost seems too big a task to recount all that has happened in this world, in this industry and in our own personal lives but our colleague Brad Keoun, editor of CoinDesk’s daily cryptocurrency markets newsletter, First Mover, offers an excellent start to summarizing 2020. He writes:
“This year saw the biggest drop-off in economic activity since the Great Depression, the biggest money-printing episode in the Federal Reserve’s 107-year history, an epochal shift toward remote working, negative prices for crude-oil futures and the first real signs the global financial system might be migrating toward fast-growing markets for cryptocurrencies and digital assets.”
2020 also saw an explosive growth in the total value locked and user activity for decentralized finance (DeFi) applications on Ethereum. We witnessed the genesis of Ethereum’s primary scaling solution with the launch of Ethereum 2.0 and the emergence of an entirely new use case for ether through staking.
Where do we go from here? For today’s special, year-end edition of Valid Points, we’ve gathered commentary from the industry’s most well-known Eth 2.0 staking experts. They’ll be illustrating through charts what caught their attention most this past year and what they’ll be watching closely for in the next.
Ethereum: A year in review
Tim Ogilvie, Staked, on gas usage
Our first contribution is from Tim Ogilvie, the founder and CEO of Staked. Staked helps investors earn yield from staking and DeFi without taking custody of their crypto assets.
“My favorite Ethereum chart shows the daily gas usage. I love it because it’s one part of the great story that I expect will propel ETH over the next few years. There are three legs to the stool:
1. Our chart. People are using ETH with increasing frequency, driving increased gas demand.
2. EIP-1559, introducing Fee Burns. This is an upcoming Ethereum improvement that will take all of the gas demand and use it to burn ETH. The more ETH gets used, the more ETH supply gets burned.
3. ETH2: Ethereum’s transition to proof-of-stake, allowing for low issuance of new supply while providing strong security guarantees.
‘Bitcoin has an amazing story as an asset with a fixed supply of 21 million BTC. Ethereum’s story has the potential to be even stronger. If gas usage exceeds supply issuance, you’ve now got a digital asset with a steadily declining supply.
‘My 2021 prediction: This becomes the dominant story around ETH’s valuation and it drives significant price appreciation.”
Jun Soo Kim, stake.fish, on Ethereum’s staking ecosystem
Next, we have the head of strategy and operations for stake.fish, Jun Soo Kim. With support for over 10 different blockchain networks, Jun Soo and his team are working to secure and contribute to an exciting new staking ecosystem and enable users to stake with confidence.
“By far my favorite chart of Ethereum 2.0 is how consistently the participation rate has been averaging at above 98% after the first few days of the Beacon Chain launch. The participation rate shows how well the active validators are doing to stay online and conduct their attestation duties. If the participation rate was any closer to 66%, we would need to be seriously concerned about the network health. But at the current levels, we have a nice big buffer that alleviates any concerns for network finality halts.
“There is also another takeaway from this data. While there are many professional staking service providers running validators on Ethereum 2.0, there is a bigger number of individuals who are operating validators themselves. These independent validators have been contributing to the high participation rate. From this, we can infer that Ethereum 2.0 has achieved its goal of making sure anyone can run validators on their own without having to rely on specialized technical knowledge or hardware. This provides hope that while staking services and exchanges will grow, the number of independent validators will grow as well. Independent validators are key in ensuring Ethereum 2.0 remains decentralized and I hope we keep seeing improvements to the experience of running validators.
“We haven’t even seen the beginning of Ethereum 2.0 integration with DeFi. Tokenized staked ETH and how they become a part of the existing DeFi stack will be a key theme in the first half of 2021.”
Chandler Song, Ankr, on staking growth
Our penultimate contribution comes from Chandler Song, CEO of Ankr. Ankr Network is a San Francisco-based Web 3.0 infrastructure provider working at removing entry barriers and opening Ethereum 2.0 staking to everyone with Stkr decentralized protocol.
“This chart represents the number of ETH sent by validators to the Ethereum 2.0 deposit contract since it went live on Nov. 4. To launch on the planned Genesis date of Dec. 1, 524,288 ETH had to be transferred until Nov. 24. This threshold was met only hours before the activation deadline.
“We see that early on the community was hesitant to stake their ETH. The fact that the staked funds are locked and essentially illiquid for an indefinite period made the progress slow in the first weeks. We think that one of the important factors that helped break the momentum was staking-as-a-service solutions going live with synthetic assets that solve early Ethereum 2.0 liquidity issues.
“We are going to see the growing popularity of liquid bond tokens representing ETH 2.0 stake. These assets have two functions: turn illiquid ETH into a tradable and liquid asset and allow investors to participate in building trust to grow the Ethereum network.”
Mike Garland, Alchemy, on Eth 2.0 adoption
Last but not least, our final chart comes from Mike Garland, product manager for Alchemy. Alchemy is a blockchain developer platform powering 4 million users and $7.5 billion dollars of transactions in 99% of countries worldwide.
“Our favorite ETH 2 graph of 2020 is one which shows the 35,300% increase in global adoption we’ve seen of the Beacon Chain since just before the Dec. 1 launch.
“We’ve seen great developers and teams pouring in to pick up and start using ETH 2.0 and all signs point to even greater adoption going into the new year.
“The ETH and ETH 2.0 ecosystems are only as good as the developers and users that drive them, so seeing this kind of growth so early for ETH 2.0 has us super excited for the year ahead.”
We’ll soon be incorporating data directly from CoinDesk’s own Eth 2.0 validator node in our weekly analysis. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post.
Believe it or not, there are assets with more volatility than BTC this year that would have destroyed 86% of the wealth you “diversified” into them that are considered by “most experts” to be “risk free safe havens.” https://t.co/YnJCUUpSJr
Coinbase’s IPO would be “is a milestone for the industry and a new stage of economic legitimization,” experts told Decrypt.
Researchers estimate the exchange could be valued at around $28 billion.
By going public, Coinbase, however, might face increased scrutiny from regulators.
Yesterday, cryptocurrency exchange Coinbase announced that it plans toofficially go public, sending ripples across the cryptosphere.
“Depending on market conditions and the continued positive momentum of crypto, Coinbase may list at the high-end valuation of $32 billion, though we believe $28 billion is a fair valuation,” Messari researcher Mira Christanto toldDecrypt.
As the first major digital assets-focused company to go through an initial public offering (IPO), Coinbase could potentially set a new standard for the whole industry, some experts noted.
Ouriel Ohayon, CEO of keyless Bitcoin wallet ZenGo, said that Coinbase’s IPO cannot be overstated. As the first major crypto-focused company to go public, Coinbase may set the tone for the future development of the whole industry.
“This is a milestone for the industry and a new stage of economic legitimization. It confirms the industry is maturing and bringing solid players under the spotlight,” Ohayon toldDecrypt, adding, “This is a validation that crypto is not just about some speculation game started by some passionate tech geeks in a garage.”
He noted that, since Coinbase is a full-blown business that offers a multitude of services to consumers and institutions alike, becoming a public company would allow anyone to “invest in crypto without having to invest in crypto.”
“Indeed, anyone who can buy stock will be able to own a share in a market leader of the crypto industry as an edge to this new economy,” Ohayon explained. “This is also going to bring to the market hundreds of Coinbase alumni who in their turn will become investors and feed the industry.”
However, there is another side to this coin. By going public, Coinbase will likely be submitted to an unprecedented level of scrutiny from regulators. The company “will have the burden of transparency and reporting which will be unprecedented in our industry” and “will set a precedent about how crypto companies should be run,” he added.
Another potential downside of going public is the possibility of Coinbase becoming more “conservative” and slowing down some of its initiatives that aim to “push the boundaries.” While regulators won’t treat the company any differently than “traditional” finance firms, this could still incur some limitations.
“What I am saying is that because now they are public, public disclosures will add to the necessity of not just complying with the regulator but also complying with being a public company and respecting ratios of risks,” said Ohayon, noting, “By design, this makes you more ‘conservative.’ For example, they will have more constraint for playing with non-custodial services and high-risk assets.”
Considering that investors today are hungry for exposure to cryptocurrencies through equity markets, Coinbase would provide “a valuation anchor not only for future listings in the crypto space, but also for crypto-native exchange tokens,” Christanto added.