This article was first published on Stories by ælf on Medium
In the first half of 2020, with capital pouring in and technology making rapid progress, decentralized finance (DeFi) was developing at incredible speed. As early projects gave way to a new wave of more innovative projects, various new applications sprang up and many products which were unimaginable before emerged. In short, Defi is much like the DApp concept that went viral in 2018, except that DApps were mostly on public chains back then, whereas DeFi today is mostly on Ethereum. Data show that the total market value of DeFi tokens has exceeded 6.2 billion US dollars. After a period of evolution and integration by trial and error, DeFi has exhibited some specific trends and has become the star player in the blockchain market. Nevertheless, it has yet to create the most appealing use cases.
According to the latest data of August 11, Uniswap on Ethereum processes more than 100,000 transactions in 24 hours, and the daily trading volume has reached 167 million US dollars, a milestone in the development of DeFi on Ethereum. From the rising value locked in DeFi, to the emergence of liquidity mining, and the value discovery of Uniswap, Ethereum has garnered enough attention and capital before its 2.0 upgrade.
However, some problems that came up along the way cannot be ignored. For example, before adding Layer 2 or upgrading to 2.0, the performance bottleneck of Ethereum was its inability to handle a high transaction throughput, resulting in record-high transaction fees. As the volume increases, users need to pay a higher gas fee in order to have their transactions processed faster, while those with small gas fees are being processed ever slower, forcing everyone to raise the gas fee, thus the cycle repeats itself.
This presents an opportunity to other public chain projects. DeFi is repeating the ...
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Stories by ælf on Medium