Ethereum (ETH) not ready yet for DeFiOctober 28, 2020
The DeFi boom is making huge waves all over, leading to new developments in DeFi apps and eventually a steady increase in DeFi transactions. As the majority of DeFi apps are developed on Ethereum, the blockchain platform is witnessing high influx of DeFi transactions of late. But according to some leading crypto experts, Ethereum is not ready yet to accommodate the current DeFi frenzy at its best.
Poor scalability and sloth block time
One of the major critics who has always been very vocal about Ethereum’s struggles with the influx of DeFi transactions is Martin Froehler, senior mathematician and the founder of Morpher crypto trading portal. Per his statements, one of the major aspects that limit Ethereum’s ability to accommodate the increasing DeFi wave is its weak scalability issue. The ETH platform is only able to tackle a very meagre 15 tps. Moreover, its block time is 15 seconds- almost an eternity when it comes to the finance sector. Both these factors put Ethereum in a highly challenging position when it comes to accommodating mass influx of DeFi transactions.
A lot of major industry figures are of the opinion that Ethereum might not have been able to anticipate the sudden DeFi hype that we are witnessing today. Yes, Vitalik Buterin has consistently assured about resolving the scalability issues with the launch of Ethereum 2.0 but some experts are apprehensive about it. According to many crypto experts, even if the upcoming version is able to improve the scalability quotient of the network to some extent, it might not be sufficient to cater to the constantly increasing volume of DeFi transactions in near future. Moreover, they have also warned that Ethereum 2.0 would do little to cut down on the pricey gas fees.
Users looking for alternatives
With numbers of DeFi transactions on rise today, poor scalability issues are leading to serious network congestion on Ethereum which has eventually spiked the gas fees. The transaction fee on Ethereum today costs a whopping $7.5, 3x higher compared to Bitcoin. If you wish to set up your wallet on the famous DeFi app MakerDAO, you will have to shell out a ludicrous $40+, if not more. On the other hand, it will take you an unnecessary $10 to use Compound. Now, obviously, these ridiculous fees aren’t exactly sustainable and they are pushing many users to look for more efficient and affordable platforms for DeFi.
TRON blockchain is one such name which is fast gaining popularity among the DeFi users looking for a better and more affordable alternative to Ethereum. On one hand, TRON assures way higher scalability- a solid 2,000 tps in place of Ethereum’s 15 tps. As a result, TRON eliminates risks of network congestion during higher numbers of DeFi transactions. The blockchain also promises lesser gas fees which makes it a more economical alternative.
Besides, TRON has recently got its first ever dedicated public oracle system called Bridge oracle. It’s a decentralized oracle which is projected to make TRON a major player in the DeFi ecosystem. Bridge oracle assures tamper-proof authentic real-world data for smart contracts which is the life-blood of DeFi apps operating on the smart contracts. Put simply, the Bridge oracle will help TRON to create a more conducive environment for smoother operation of DeFi apps and let the network welcome an increasing number of DeFi transactions in the coming months.