Posted 1 year ago | by Ben Armstrong
Ethereum Under Fire for DeFi Hype – Criticism Probably Not Justified
Interest in DeFi has soared and in the blockchain industry many companies are developing new ways to use the technology. While Ethereum is used in many DeFi projects, some people think that the platform isn't up to the challenge.
In a recent conversation with media, MartinFroehler , founder of crypto trading platform Morpher, is afraid that existing network capacities are not enough for Ethereum, even though it is the “best thing (the blockchain industry) has."
“Ethereum can only handle about 15 transactions per second and has a block-time of 15 seconds, which is an eternity in finance. By design everyone interacting with it needs Ether. That is a huge barrier to entry and mass adoption.”
Ethereum is Probably Fine
It is undeniable that Ethereum is a powerful smart contract platform, and most of the issues can like be fixed by developers. In some cases, this may mean using sidechains.
Froehler seems to see that this is totally possible.
“There is cryptographic proof for everything that happens on the sidechain on Ethereum. (…) People are able (to) trade without needing Ether. They don’t pay any fees, enjoy a settlement time of one second, and are completely independent of the many congestions on the Ethereum network.”
In addition to sidechains – Ethereum 2.0 will also help the platform to adapt to rising demand.
Sergej Kunz, CEO of the Decentralized Exchange 1inch, mentioned Ethereum 2.0 and the capacity it has to revamp everything.
“You have to rethink everything. You can migrate smart contracts to the code but it’s not scalable. To be able to scale, you have to create standards and bring new protocols based on the new sharded architecture, such as NEAR which is similar to Ethereum 2.0.”
New Roads Forthcoming
Mounir Benchemled, the founder and CEO of middleware layer ParaSwap, highlighted that it could be complex to explain to end-users layer-2's functionality “and the risk of not being able to pay the funds immediately to these users” may be difficult for people to understand.
Benchemled added that it is not feasible to switch to Ethereum 2.0 for all DeFi projects.
“For it to work, all applications would need to move towards one single platform. Major projects might have consensus. However, for other projects who have their own agendas, it might be hard. New bridges will be built to allow interoperability.”
Articles on Bitboy may contain affiliate links that help us to remain profitable. It might come as a surprise, but all these great articles aren’t cheap to produce. If you don’t mind helping us out, please click on the links!