The total locked USD in Decentralized Finance (DeFi) has reached 6.34 Billion, , an all-time high according to DeFi Pulse. The popularity of its application is gaining new heights daily as it sees an influx of new adopters. But it seems that many cryptocurrency adopters and enthusiasts do not understand what DeFi is all about as many are still trying to learn about it.
Popularity of DeFi
Blockfolio on August 13, rolled out a poll to check the level of involvement of its users with DeFi. With 8,897 responses, 39% said they are curious and still learning about it while 32% said they don’t know anything about it. Only 10% are highly involved and 19% are new to the innovation. With these responses, it shows that there is still a lot of grounds to cover in adoption to cover for DeFi despite its huge volume.
With respect to volumes, Ren Protocol on the 15th of August hits a new all-time high of 1600BTC (19.1 Million USD at the time). This reveals that Bitcoin investors are beginning to see the advantage of Bitcoin backed tokens on Ethereum blockchain as it offers huge merit to its scalability problem. But many are wary of trusting centralized custodians with the safety of their funds.
Vitalik Buterin, the co-founder of Ethereum, opined in a tweet today:
“I continue to be worried about the fact that these wrapped BTC bridges are trusted… I hope that they can all *at least* move to a decently sized multisig”
This is worthy of note as many DeFi platforms today use centralized wallets with customers’ funds fully in their care. Users have to trust that they will not steal their funds while they interact with the tokens they are provided with. But some platforms have already built solutions for these potential loopholes.
Safe Haven (SHA) as an inheritance platform can help DeFi platforms decentralize the private keys to their wallet by breaking them into parts that can be shared with multiple people. With inheriti platform ready to be launched soon, customers can really cement their trusts with partly decentralized DeFi applications. Private key shards can be with different people and not allow access to a single person fo secure funds. Some exchanges are already using this kind of feature to secure funds in their custody.
Ren Protocol operates a fully decentralized custodian wallets. The private keys of the wallets holding users’ funds are shared and kept by dark node validators who stake REN tokens to validate transactions. This ensures customers’ funds are always secure and not in the custody of anyone. No wonder its innovation is getting huge recognition from people.
Scalability of Bitcoin Achieved What about Huge fees?
Most DeFi protocols are currently resident on Ethereum blockchain. Despite the fact that transactions on Ethereum blockchain are faster than Bitcoin’s but the huge transaction fees are a problem. It is our opinion that DeFi protocols should begin to reconsider a better blockchain to implement their products. ETH2 is still quite far as the test net is taking longer than expected with bugs surfacing every now and then to be dealt with.
Blockchains like Xinfin (XDC) are open and readily available to accept DeFi protocols because they process transactions faster than most blockchains with a near-zero fee. Xinfin will be a suitable option because it can run the Ethereum Virtual Machine (EVM) and supports smart contracts. It is compatible with Ethereum Dapps. What Eth2 cannot achieve has already been achieved before the developers began planning for proof of stake consensus.
Credit: Source link