WIll Ethereum become irrelevant?

Contents:

  • 🤔 Will Ethereum become irrelevant?
  • ⛓️ Solana and Raydium as Alternatives
  • 👀 Under the Radar
  • 📰 ICYMI
  • 🙏🏻 Grateful for…
  • 💸 Coupons

🤔 Will Ethereum become irrelevant?

Over the last 3 years we have seen the transaction cost (gas fees) on the Ethereum network skyrocket over 1,000%. To this day, we continue to patiently wait for the release of the second layer (Layer2) of Ethereum, which promises, among other things, faster, more efficient transactions at lower costs.

Ethereum L2 (Layer 2) is a collective term for solutions designed to scale your application by handling transactions outside of the Ethereum Mainnet (Layer 1) while leveraging the Mainnet’s strong decentralized security model. Transaction speed suffers when the network is congested, leading to a poor user experience. And as the network becomes congested, gas prices rise as transaction senders try to outbid each other. This has made Ethereum extremely expensive.

While many wait for ETH layer 2, others have taken action and created chains that actually exceed the speed and performance of Ethereum. These have been slated as alternatives to the high gas fees and congestion problems plaguing Ethereum.

I have personally moved to Polygon and Solana for DeFi transactions and NFT usage. Obviously I am not the only one and there are many other alternatives besides the ones Im using.

Ethereum has been losing users and the market share rapidly in recent months ending in losing TLV.

The Total Value Blocked (TLV) is the total value of crypto assets deposited in a decentralized finance (DeFi) protocol, or in DeFi protocols in general. It has become a key metric for measuring interest in that particular sector of the crypto industry.

This chart shows the aggregate DeFi TVL (Total Value Locked) per blockchain.

Total Value Locked in DeFi increased from $30 billion to $200 billion over the last 3 months and has increased 100,000% in just 3 years.

In the chart above, which highlights the value locked by Blockchain over the last three months, we can see that Ethereum lost almost $35 billion (from $158 billion to $124 billion). While Terra’s TVL grew 50% ($10B to $15B), Avalanche increased $1B, Fantom nearly doubled its TLV ($4.9B to $8.66B), and another big winner during this same period was Harmony, growing 147%.

In the image below we can see that the Ethereum chain currently has 58.94% of the Defi market, losing more than 40% since August 2020, when it had 98% of it.

⛓️ Solana and Raydium as Alternatives

This week I decided to experiment with Raydium, an automated market maker (AMM) and liquidity provider based on the Solana blockchain for the Serum decentralized exchange (DEX). The steps executed were the following.

  1. Deposited Solana on Raydium
  2. Swapped Solana for Ray (Raydium token) and USDC (stablecoin)
  3. Deposited both in the Ray-USDC pool
  4. This pool gave me a Ray-USDC LP token (6% apy), which I deposited on the respective Farm to earn a 58% apy.

Four simple transactions that were executed in less than 10 minutes for a total fee of about 5% of the total transaction. This 5% was recovered in 36 hours for providing liquidity to the network.

This is just one example of the alternatives that exist and how they could accelerate the exodus of investors from Ethereum to other chains.

That is why we wonder, will Ethereum become irrelevant?

👀 Under the Radar

  • Cronos (CRO) — Cronos Chain, an Ethereum-compatible blockchain, was recently launched to run in parallel to Crypto.org blockchain. The mainnet beta went live on Nov. 8, 2021, and is built on the Cosmos SDK, utilizing a proof-of-authority (PoA) consensus mechanism. Despite the recent launch, growth in total value locked (TVL) has skyrocketed, reaching a high of over US$2B in less than 3 months. $CRO token prices also rallied by over 350% since the launch, reaching a high of $0.96. Bridge between Ethereum and Cosmos is expected to come in the near future.
  • Gnosis (GNO) — Decentralized prediction market built on the Ethereum protocol. Third-party developers will also be able to introduce their own services. A prediction market utilizes user predictions to aggregate information about future events, Individuals will be able to create prediction markets for events, allowing users to buy shares of predicted events. OWL tokens are earned by staking GNO. The amount of OWL received is dependent on the length of the lock period as well as the total supply of OWL tokens in the market.
  • Harmony (ONE) — Blockchain platform designed to facilitate the creation and use of decentralized applications (DApps). The network aims to innovate the way decentralized applications work by focusing on random state sharding, which allows creating blocks in seconds.
  • Heco (HT) — The Huobi Eco Chain is a decentralized, cost-efficient and smart contract compatible blockchain. HECO is still relatively young, since a few months after its launch, HECO had processed more than 20 million transactions with more than $1 billion in locked assets. Similar to Binance.com‘s BSC, HECO is known as an exchange chain. The main reason that more and more users are switching to exchange chains and alternative blockchains is that Ethereum — the best-known and first platform to support smart contracts and therefore also DApps (Decentralized Apps) — is becoming congested. This results in low transaction output and high transaction costs.
  • Telos (TLOS) — Telos is built for speed and scalability making it the ideal network for mainstream adoption — Telos based Tokens NFT’s and Smart Contracts are already used for DeFi, Gaming, Social Media apps and so much more. Telos is home to over 100 distinct applications (dApps) enjoying networks speed (0.5s block times) and scale (10,000+ TPS) but also the robust on-chain services that Telos provides for voting, sentiment, decentralized file storage, location and much more. The upcoming Telos EVM (currently on testnet) will be the most performant and most affordable Ethereum Virtual Machine available. When it arrives Telos will be the only blockchain to support the two leading standards EVM and EOSIO for smart contract development. These two technologies together make up the majority of the top dApps on popular tracking websites such as dapp radar.

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