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Smart Contract Networks Could Generate $450B Annually by 2030: Ark Invest

2 mins
Updated by Kyle Baird
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In Brief

  • Smart contract ecosystem could be worth $5.3T in 2030.
  • More tokenized assets on-chain means more growth.
  • Ethereum's economic model is now superior in many ways to Bitcoin's.
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Emerging technology and crypto investment firm Ark Invest is bullish on smart contracts. The company made some big predictions for the sector in a recent report.

In a report titled ‘Big Ideas 2023,’ released on Jan. 31, Ark Invest made some bold predictions about smart contract networks.

Company researchers said that an increasing value of tokenized financial assets on-chain would drive the growth.

“Decentralized applications and the smart contract networks that power them could generate $450 billion in annual revenue and reach $5.3 trillion in market value by 2030.”

Furthermore, it predicted that tokenized assets would grow to 5% of all financial assets by the end of the decade.

Smart contract network growth – Ark Invest

Smart Contract Boom

The $450 billion figure was derived by predicting smart contract adoption growth similar to that of the early internet. If decentralized financial services charged a third of traditional financial services take rates, the industry could top $5 trillion by 2030.

Additionally, Ark Invest is not the only firm bullish on tokenized real-world assets. CoinMetrics also sees explosive growth in tokenized RWA in 2023, as reported by BeInCrypto in January.  

Ark also noted that the utility of smart contract networks is expanding and diversifying.

Ethereum utilization by transaction type - Ark Invest
Ethereum utilization by transaction type – Ark Invest

What was once dominated by Ethereum transfers is now a diverse ecosystem of DeFi services, NFTs, and stablecoins.

The researchers observed a paradigm shift to smart contract-based decentralized exchanges and solutions. Furthermore, DEX market shares have been increasing over the past three years.

“Abandoning centralized intermediaries and moving to self-custody solutions, traders increasingly favor the transparency of decentralized exchanges.”

DEX volume and market share - Ark Invest
DEX volume and market share – Ark Invest

On Ethereum, the world’s largest smart contract network, Ark noted that network fundamentals are now stronger than Bitcoin’s. “With its new token model, Ethereum’s net annual issuance has flattened and is now lower than Bitcoin’s 1.7% and the 4% in Ethereum’s prior PoW model,” it noted.

Comparative supply growth - Ark Invest
Comparative supply growth – Ark Invest

Strong Layer-2 Growth

Finally, the report touched on Layer-2 networks. The number of transactions on the leading two L2 networks, Arbitrum and Optimism, now equal those on Layer-1 Ethereum.

Layer-2 ecosystem growth - Ark Invest
Layer-2 ecosystem growth – Ark Invest

Ark concluded that new layer-1 networks, such as Aptos, are increasingly centralized due to their token distribution models. Aptos, for example, was widely criticized for being heavily VC and insider-backed.

“Consequently, new networks cannot claim they are sufficiently decentralized on a token holder basis and could be susceptible to pressure by insiders.”

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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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