Author: arndxt Source: X, @arndxt_xo Translator: Shan Eoba, Jinse Finance
As 2024 comes to an end and 2025 approaches, I have reflected on my crypto journey and drawn inspiration from discussions at OpenGuild Vietnam and conversations around Ethereum and the Optimism Superchain. The following is an in-depth analysis of the key technological and strategic developments shaping the future of Polkadot and Ethereum.
Crypto Market Overview
Overall, the market is at a critical juncture of regulation and technological transformation, particularly in Vietnam and the intersection of AI and crypto.
1. Crypto Legalization in Vietnam
The Vietnamese government plans to complete the legal framework for cryptocurrencies by May 2024, which may signal the rise of a wave of legitimate crypto enterprises.
• Regulatory clarity can reduce uncertainty and attract higher-quality projects and institutional investment interest.
• If structured properly, Vietnam could become a hub for blockchain startups, connecting the vibrant tech ecosystem of Southeast Asia to the global crypto market.
2. Stablecoins and User Adoption
The use of stablecoins has grown significantly and is expected to continue this trend. Strengthened stablecoin infrastructure may drive broader adoption, especially in regions with volatile local currencies.
Stablecoins are one of the most powerful entry applications in the crypto space. By providing a secure medium of exchange, stablecoins can facilitate everyday transactions and protect value during periods of local currency volatility. Ongoing improvements (e.g., more efficient on- and off-ramps) may further embed stablecoins into the global financial system.
3. AI Agent Ecosystem
Since late 2024, the rise of AI-crypto solutions has attracted increasing attention from investors and incubators (such as Y Combinator). AI agent ecosystems (e.g., fully autonomous trading bots, decentralized AI modules, on-chain AI oracles) are poised to simplify tasks traditionally requiring human intervention. As these systems mature, they may raise complex legal and technical issues around governance, accountability, and data privacy.
4. Proof of Personhood
The convergence of AI and crypto naturally raises concerns about identity verification, especially with the surge of deep fakes and AI-generated personas. Proof of Personhood, based on decentralized identity solutions, aims to ensure unique human identity authentication.
If AI can simulate human behavior on-chain, robust identity mechanisms will become increasingly crucial. Proof of Personhood may become a standard for social applications, DAO memberships, or token airdrops. Crypto methods (such as zero-knowledge proofs) are expected to further innovate to verify authenticity while preserving privacy.
Ethereum Ecosystem
In 2025, Ethereum's evolution focuses on chain abstraction and protocol-level upgrades aimed at improving network efficiency, L2 throughput, and user experience.
1. Pectra Upgrade
The Pectra upgrade is a significant milestone for Ethereum, focusing on improving wallet infrastructure and addressing broader ecosystem challenges. As chain abstraction becomes a core priority for blockchain platforms, Pectra's success may redefine how users interact with Ethereum.
The Pectra upgrade on Ethereum is a key milestone, focusing on improving wallet infrastructure and addressing broader ecosystem challenges. As chain abstraction becomes a key priority for blockchain platforms, Pectra's success may redefine how users interact with Ethereum.
From my perspective, Ethereum's mainnet is at a crossroads. The rise of powerful L2s like Optimism, Arbitrum, and zkSync has increased the pressure to maintain Ethereum's "gold standard" status. Pectra has the potential to bridge critical gaps - simplifying the wallet experience by addressing pain points like high gas fees, transaction bundling, and user authentication. If implemented effectively, it can significantly enhance user onboarding while consolidating Ethereum's dominance in an increasingly competitive ecosystem. To me, this is a doubling down on user-centric innovation by Ethereum, an initiative that can secure its position in the blockchain hierarchy.
2. Notable EIPs to Watch in 2025
• EIP-2935: Storing Historical Block Hashes in the State
• Functionality: Storing block hashes over a period, simplifying the node query process, improving efficiency, and reducing overhead.
• Analysis: This is a "network infrastructure" improvement, not flashy but crucial for node operators. The enhanced data retrieval mechanism can also reduce chain reorganization and node sync times.
• EIP-7702: Injecting Single-Use Transaction Code for EOA Accounts
• Functionality: Injecting code into Externally Owned Accounts (EOAs) through a special transaction type, enabling features like transaction bundling, gas fee sponsorship, and permission downgrading (without changing the address).
• Analysis: This proposal blurs the line between EOAs and smart contracts, potentially driving more sophisticated contract wallets (e.g., ERC-4337-based solutions). If widely adopted, it may spawn more user-friendly features like transaction sponsorship or advanced multi-sig setups.
• EIP-7691: Increasing Blob Throughput
• Functionality: Building on EIP-4844 (Proto-Danksharding), increasing the number of blobs per block to further reduce L2 costs and enhance throughput.
• Analysis: Coordinated scaling of L1 and L2 is crucial for Ethereum. By expanding blob capacity, Ethereum reaffirms its commitment to maintaining a low-cost L2 environment. This improvement may accelerate user adoption of L2 solutions.
Polkadot Ecosystem
Polkadot continues to be a hotbed for cross-chain experimentation in 2025, with several developments aimed at consolidating its position as a high-throughput and interoperable decentralized applications infrastructure.
1. JAM Chain and Its Innovations
JAM Chain is a next-generation blockchain protocol that has garnered significant attention within the Polkadot ecosystem. If successful, JAM can exemplify Polkadot's commitment to a plug-and-play multi-chain architecture.
Milestone 1 and JAM SDK A key milestone for the JAM team is the completion of [JAM Milestone 1], which includes the launch of a development kit called the JAM SDK. This SDK should simplify building on JAM, potentially attracting a wider range of developer profiles (from traditional backend engineers to specialized blockchain developers).
JAM CoreVM The introduction of the JAM CoreVM may redefine how real-time transaction and application execution are processed. By replacing the traditional block finality method with an "Optimize-Accumulate" mechanism, the JAM CoreVM aims to provide near-instant finality. This approach can significantly reduce latency, a long-standing challenge for blockchains to achieve fast confirmation without sacrificing security. If executed effectively, it may encourage more latency-sensitive dApps (e.g., high-frequency trading, real-time gaming, or event-driven DeFi) to migrate to or launch on Polkadot parallel chains supported by JAM.
CoreChains, CorePlay After completing the virtual machine layer, the JAM team plans to expand functionality through CoreChains and CorePlay. While further details are limited, these solutions seem to extend JAM's architecture, potentially addressing niche use cases critical for game ecosystems or modular enterprise-grade blockchains. Polkadot's ethos revolves around specialized parallel chains. JAM's approach to building CoreChains suggests a potential shift towards industry-specific functionality. If these specialized chains each solve unique challenges (such as compliance, gaming, or data management), it can enrich Polkadot's value proposition as a multi-chain network.
2. Polkadot Network-Wide Improvements
In addition to JAM's initiatives, Polkadot itself will undergo significant upgrades to reflect the lessons learned from the past year's network stress tests and community feedback.
The completion of the Polkadot Hub (Plaza) is dedicated to consolidating ecosystem tools, infrastructure, and documentation. Analysis: As the ecosystem expands, a unified center makes sense for both new and experienced developers. Centralizing resources can significantly reduce complexity, which is an important step in attracting more developers and end-users in the fierce competition with other L1 and L2 networks.
XCM v5 cross-chain messaging (XCM) is key to Polkadot's interoperability vision. The arrival of XCM v5 is expected to enable stronger cross-chain communication and a better user experience. Analysis: Cross-chain interoperability remains the holy grail in the cryptocurrency space. While existing solutions like Wormhole and LayerZero help connect ecosystems, XCM is Polkadot's native tool. Making XCM more efficient and secure can make cross-parachain operations feel "native", potentially reducing friction for users and developers.
Elastic Scaling: After a severe spam attack on Kusama in December 2024, Polkadot's elastic scaling mechanism demonstrated the ability to reach 143k TPS. This achievement highlights Polkadot's adaptability under high load. Analysis: The ability to handle sudden traffic spikes is crucial. Successfully withstanding a spam attack can be a marketing boon, showcasing resilience and reliability. However, the real test lies in managing legitimate traffic surges - especially if Polkadot-based dApps gain mainstream adoption.
3. Chain Abstraction and Network-Wide Development
Polkadot's overall strategy is increasingly focused on making it easier for developers and users to access the network, ensuring that the underlying complexity remains behind the scenes.
Unified Address Format: By providing a single address format across parachains, Polkadot aims to eliminate the confusion caused by multiple wallet standards. Simplifying addresses is no easy task, but it is a surefire way to reduce cross-chain interaction friction. This is reminiscent of how large ecosystems (such as Apple's iOS) unify the user experience across multiple applications and services.
Omni-node and Polkadot SDK: Maintaining the latest node software for dozens of parachains requires significant resources. Omni-node aims to simplify this process by optimizing resource allocation. From a developer's perspective, lower operational overhead is always welcome. However, the complexity of Polkadot's multi-chain approach may require continuous improvement of developer tools, so in addition to Omni-node, further iterations are needed.
Final Thoughts
At the same time, broader market trends, including regulatory initiatives in Vietnam, the enhancement of stablecoins, and AI-driven proxy systems, highlight the rapid evolution of the crypto space.
Ethereum continues to iterate through Pectra upgrades and new EIPs, consolidating its L1 as a reliable settlement layer for a thriving L2 ecosystem.
On Polkadot, innovations like JAM Chain, Omni-node, and improved XCM aim to enhance the usability and scalability of cross-chain operations.