DEFI – From Inception To 2021 And Beyond (History Of Decentralized Finance Explained)
DeFi Market Growth Threatened by High Ethereum Fees
DeFi boom has inflated gas fees for transactions on the Ethereum network, threatening industry growth
Possible solutions include optimized smart contracts and merged transactions
Ethereum 2.0 will help solve the scaling problem
While miners are earning over $ 500,000 per hour on the congested Ethereum network, the DeFi industry Decentralized Finance (DeFi) is this is financial services, built on blockchain technology, which offer users access to open, efficient and … More risks becoming a victim of its own success.
Growing Decentralized Finance (DeFi) Market, Already Over $ 8 Billion, Testing Ethereum’s Capabilities.
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The industry does not share the joy of miners
The feverish rise in demand for the use of smart contracts has led to a spike in contract calls and an increase in gas fees for the implementation of transactions on Ethereum. As a result, miners’ profits for processing transactions in this network exceeded $ 500 thousand. By the way, the other day commissions on the Ethereum network, which showed an impressive drop at the beginning of this month, jumped again, and by as much as 70%.
For miners, this is certainly great news, unlike the industry as a whole, for which a further rise in the cost of transactions at a certain stage may turn into a barrier to further growth..
Against the backdrop of this trend, Alchemy CEO and co-founder Nikil Vishwanathan complained about the dynamics of gas prices, which are a big problem for his company’s clients..
Alchemy is a blockchain platform that promotes projects such as Dapper Labs, Bancor, Maker, 0x, and Kyber Network. The company is backed by well-known investors and celebrities including rap artist Jay Z and actor Will Smith. Alchemy supports over 70% of the top Ethereum applications, and about 50% of its assets cover the DeFi market. One of the main tasks of the project is to solve the problems that developers face when creating their applications, and gas is one of the first on this list..
The growing segment of decentralized finance is overloading the Ethereum network, with developers primarily concerned about the rising cost of gas. According to Joe Lubin, founder of ConsenSys, a company that supports projects within the Ethereum ecosystem, scaling problems are a consequence of technological growth and development, and this is quite natural.
The blockchain upgrade to Ethereum 2.0, due later this year, is intended to address scaling issues. At the same time, developers are constantly looking for solutions for the current network. For example, the recent transfer of transactions from Tether to OMG Network is helping to reduce latency and fees..
Among other potential solutions, Viswanathan cites the accumulation of gas tokens at low levels for the purpose of their subsequent use after the price increases, merged transactions or the optimization of smart contracts in order to reduce the use of gas..
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