# Blockchain Industry Poised for Significant Transformation by 2025

By Jung-sun Myung, Block Media Reporter – The blockchain industry is anticipated to undergo crucial changes by 2025, driven by technological advancements, the growth of Zero-Knowledge (ZK) solutions, and the rise of privacy-focused applications. Web3-based R&D firm Equilibrium Labs (EQ Labs) has released a detailed report titled “Blockchain Industry Predictions for 2025.”

The report offers insights across five key areas: scaling, zero-knowledge proving, privacy, consensus and P2P networking, and user experience (UX).

# Ethereum and Solana: “Year of Scaling”

By 2025, both the Ethereum and Solana networks are expected to make significant strides in scalability and data processing capabilities. The report predicts major technological developments, including Ethereum Layer 2/3 (L2/L3) scaling, an increase in Solana’s transactions per second (TPS), and the expansion of alternative data availability layers (DA).

## Ethereum’s L2/L3 Solutions to Exceed 2,000

Ethereum’s Layer 2 and 3 (L2/L3) scaling solutions are forecast to surge from the current 120 to over 2,000, nearly a 17-fold increase. Application-specific rollups and enterprise-level L2 solutions are expected to drive this growth. Simultaneously, Ethereum’s scaling factor is projected to soar from approximately 25x to over 200x, greatly enhancing L2/L3 transaction processing efficiency compared to Layer 1 (L1).

## Solana’s TPS to Leap Beyond 5,000

Currently averaging 700–800 TPS, Solana’s TPS is projected to improve beyond 5,000 by 2025. Key upgrades include the release of the Firedancer client and increased block capacity. The report underscores the need for Solana’s block size augmentation due to nearing the upper limit (48M Compute Units), foreseeing dramatic enhancements in Solana’s network processing capabilities.

## Expansion of Alternative Data Availability Layers

Presently, about 35% of L2/L3 data is posted to alternative data availability (DA) layers. By 2025, this figure is expected to exceed 80%, propelled by the growth of high-speed rollups and native rollup ecosystems like Celestia, Avail, and EigenDA. These changes are anticipated to reinforce L2/L3 scalability through enhanced data posting efficiency and cost reduction.

# Growth of ZK-Based Solutions and Increased Gas Limits

The block gas limit on Ethereum L1 could potentially double from 30M to 60M, contingent on the Fusaka update and developer community consensus. Such changes are expected to enhance the processing capability of high-value applications.

# Advancement and Expansion of ZK Technologies

The prevalence of zero-knowledge (ZK) based solutions is projected to expand from the current 25% to over 50%. ZK technology is expected to stand out due to its verification speed improvements and cost reductions, potentially replacing optimistic rollups and enabling asynchronous interoperability.

## Verifying All Ethereum Blocks with ZK Proofs

It’s highly likely that by the end of 2025, all Ethereum blocks will be verified using zero-knowledge proofs. Presently, it costs approximately $1 million annually to verify blocks using common zkVMs (zero-knowledge virtual machines). Considering the pace of technological advancement, these costs are expected to diminish gradually.

Despite a few minutes of delay in block verification, ZK-based verification can offer significant advantages for services with low time sensitivity by strengthening the network’s reliability and efficiency and providing simple verification means for users like light clients.

## 30-Second Block Verification: zkVM Innovations

By 2025, it is expected that common zkVMs will be capable of verifying a main ETH block in under 30 seconds, significantly reducing the current 90-second verification time achieved by projects like Risc Zero. Continuous performance improvements in zkVMs are expected to enable real-time verification and state transitions for Ethereum, with zkEVM becoming a core protocol, though it will take time for implementation.

## Decentralization of ZK Proof Networks

Currently, most ZK proofs are centrally generated. By 2025, it’s anticipated that over 90% of ZK proofs will be generated via decentralized networks. Decentralized proof networks offer substantial advantages in cost-efficiency, operational simplicity, and censorship resistance.

Examples such as the decentralized network Gevulot are preparing to handle large-scale proof tasks, maximizing hardware utilization by leveraging global computing resources at low costs and paying for computing expenses only when necessary. This opens up new possibilities for ZK-based applications and networks.

# Privacy Innovations

This section highlights the upcoming challenges and opportunities in the blockchain privacy space. By 2025, blockchain privacy technologies are expected to center around user data protection and network performance optimization. The report indicates the rise of privacy-focused applications, the spread of decentralized networks, and the emergence of new cryptographic techniques.

## Privacy-Centric Applications

Privacy in blockchain is fundamental for protecting sensitive data of individuals and businesses and facilitating the development of new applications. Key categories where privacy is crucial include high-transparency cost scenarios (e.g., political voting, sensitive business data), direct monetary benefits from privacy (e.g., protecting trading strategies), reducing collaboration friction, and creating new use cases (e.g., gaming, social networks). These changes will offer stronger data protection and expanded blockchain use cases for both users and companies.

## Key Technologies: Zama’s MPC Decryption Library and NymVPN’s Growth

Zama is set to release the first major open-source library for MPC (multi-party computation) decryption networks, expected to become a new standard in the field and enhance the efficiency of ZK and MPC technologies.

Nym may capture up to 10% of TOR network users through its decentralized VPN service, NymVPN, offering advanced security features such as a five-layer mixnet utilizing Onion Encryption and a two-layer WireGuard VPN boasting fast processing speeds. This network is expected to demonstrate the potential of decentralized networks while bolstering user privacy protection.

## Innovations in Blockchain and Cryptographic Technologies: IO and Encrypted Mempools

Indistinguishability Obfuscation (IO) allows programs to be executed in an encrypted state. By 2025, at least three startups are anticipated to secure funding to develop this technology, supporting multi-party computation and secretive data utilization on blockchains, positioning it as a pivotal technology for the blockchain ecosystem.

However, the adoption of encrypted mempools, designed to prevent MEV (minimum extractable value) attacks, is expected to remain limited, facing challenges in product integration and trust assurance. Despite being included in the Ethereum roadmap, widespread adoption may take longer.

# New Innovations in Blockchain Networks: DAG and QUIC

By 2025, Directed Acyclic Graph (DAG) based consensus algorithms and QUIC (Quick UDP Internet Connections) networking technology are anticipated to become more prevalent in blockchain networks. This is expected to optimize data transmission and consensus processes, significantly enhancing network performance.

## Transition to DAG-Based Consensus

DAG-based consensus is emerging as a potential replacement for traditional Proof-of-Work (PoW) and Byzantine Fault Tolerant (BFT) consensus methods. By separating data propagation from the consensus layer, it reduces network communication overhead while increasing efficiency.

In a DAG structure, transaction order is deterministically defined, maintaining consistent DAG states among nodes and resolving synchronization issues. New protocols like Aleo are adopting DAG-based consensus, following earlier protocols like Aptos and Sui.

EQ Research predicts that at least one major network will declare a transition to DAG-based consensus by 2025. However, considering the implementation complexity, it is likely that additional time will be needed to complete the transition. Early successes may come from using existing implementations such as Narwhal-Bullshark or Mysticeti.

## Expansion of QUIC Network Protocol

QUIC, a latest transport layer protocol developed by Google and standardized by IETF, aims to reduce latency, enhance connection stability, and improve security. It is already in use by some major blockchain projects like Solana, Internet Computer, and Sui.

QUIC could evolve to be less dependent on TLS (Transport Layer Security), potentially leveraging hardware acceleration to mitigate performance issues and enabling broader use in P2P networks. Its potential utilization is expected to significantly enhance data transmission efficiency in blockchain networks, surpassing performance optimization of existing TCP-based HTTP2/1 protocols.

# User Experience Innovations: Future of Chain Abstraction and Network Expansion

By 2025, blockchain user experience (UX) is predicted to evolve into a more intuitive and streamlined environment through chain abstraction and modular network expansion. Technical changes centered around Solana and ZK-based rollups will allow users to utilize applications without being burdened by blockchain complexities.

## Solana: L2 Expansion and Consistent UX

At least one application is expected to run in an L2 or network expansion form on Solana by 2025, while still providing a consistent L1 environment experience for users. Solana’s network expansion will go beyond merely increasing processing speed, enabling new developer experiences with features like low latency and customizable block space.

Projects like Magic Block or Bullet (ZetaX) are likely to provide users with seamless L1-like UX while utilizing network expansion technologies in the background, following successful strategies seen in the Ethereum ecosystem, such as Payy.

## Chain Abstraction: Simplified UX Hiding Complexity

Chain abstraction technology hides inter-chain complexities from users, offering a simplified experience. More than 25% of all on-chain transactions are expected to be generated through chain abstraction by 2025. This allows users to leverage various blockchain ecosystems without having to choose or understand specific chains.

Although chain abstraction can obscure trust assumptions and risks, an ‘on-chain rating agency’ to assess blockchain solution reliability might emerge to address these concerns. This would allow users to set preferred chains based on security levels or rely on third-party solutions for better outcomes.

## ZK-Based Rollup Cluster Expansion Focusing on Interoperability

ZK-based rollup clusters are expected to operate like a single chain through native interoperability, with the majority of new rollups launched by 2025 adopting this technology. This increases network effects and allows developers to focus more on application development and user experience.

Projects such as zkSync’s Elastic Chains, Polygon’s Agglayer, and Nil’s zkSharding are prime examples. From a user perspective, consistent experience will be provided across different chains, while developers gain stronger tools and ecosystems.

# “2025: The Year of Mainstream Adoption and UX Improvement”

EQ Labs concluded that “While the blockchain industry has taken initial steps towards mainstream adoption, further foundational infrastructure development is needed to accommodate a larger user base and more diverse applications.” The report anticipates that “2025 will be a pivotal year for blockchain, marking a significant turning point as the technology matures and new possibilities unfold.”