Ethereum was a great start to DeFi.
This year the crazy development of DeFi projects is a natural phenomenon. It was facilitated by a number of important factors. Of course, the very idea of decentralization, transparency and accessibility cannot leave any user indifferent. However, without the proven Ethereum platform, developers would create a favorable environment for a long time, which would repeatedly sink into failure before launch. In fact, in two years, the amount of locked money in Defi has changed from $500 million to $6.5 billion:
Despite the DeFi space vertical growth, there is a great potential for expanding and popularization the ecosystem. The main question is whether Ethereum will be able to provide the required speed, volume and comfortable rates for transactions.
Upgrade the old or create a completely new?
If we analyze the growth chart of locked funds in the DeFi projects from July 2020 and compare them with the growth chart of the transaction fee price, we see a directly proportional relationship. According to Coinmetrics during the month, the Ethereum commission actually tripled. Increased transaction costs arise in order to avoid network congestion. If this trend is not changed, DeFi will not be able to compete with “traditional finance”. Due to high commission costs and poor scaling mechanism, we are unlikely to see such sharp shots of projects as last week.
And while developers are testing Ethereum 2.0, Radix is confidently announcing an alternative solution.
4 Radix technologies in one protocol.
Providing easy and convenient access to projects will increase the liquidity of the DeFi industry. In turn, it should reduce transaction costs and again expand the range of assets. This line of thought inspired Radix to create the first protocol of the first level. It consists of 4 technologies that should break through the barriers to the DeFi growth:
- Cerberus – Scaling
- Radix Engine – Protection
- Component Catalog – comfortable development of compatible DeFi dApps
- Developer Royalties – a decentralized incentive program
The result is a platform where transactions are fast, cheap, and secure; where scale is unlimited and connections between applications frictionless; where dApps can be built quickly and with confidence in their ability to manage user assets safely; and where builders are directly rewarded by the platform for useful contributions both large and small. It is a platform designed to serve as the foundation for Mainstream DeFi at global scale.
Charts courtesy of Radixdlt.com