- The report of Ethereum DeFi in Q2 2020 is one such example of the sector’s blooming.
- According to DappReview, Ethereum-based DeFi projects have grown by more than 778% over the last year.
- The volume or amount of Wrapped Bitcoins available on the Ethereum network surpassed those present on the Lightning Network.
Decentralized finance is the most active sector in the blockchain space. The report of Ethereum DeFi in Q2 2020 is one such example of the sector’s blooming. A lot of factors have played their part in it but the major ones are the tokenization of BTC on Ethereum, yield farming, and security breaches on the network. Furthermore, the active Ethereum users doubled in the 2nd quarter of the year. According to Defi Report, Ethereum-based DeFi projects have grown by more than 778% over the last year.
The three key Events that Dominated Ethereum DeFi space
Tokenization of BTC on Ethereum – The volume or amount of Wrapped Bitcoin available on the Ethereum network surpassed those present on the Lightning Network. Contrary to the ‘anti-maximalist’ belief of Bitcoin tokenization, the event helped the cross-chain interoperability of ETH’s DeFi ecosystem. Additionally, Bitcoin users are trying to find ways to use it for the better.
Release of governance token COMP – In mid-June, Compound released its governance token COMP that played a crucial role in yield farming. Also known as rocket fuel for decentralized finance (DeFi), yield farming has kicked in as they provide better liquidity to users. Investors look forward to short term gains by placing crypto at the hands of a startups’ application.
Security issues that took away $26 million – Balancer, Uniswap, and Lendf.me confirmed that they lost approximately $26 million to scammers on the blockchain network. Although most of the stolen money was returned, steps have been taken for proper surveillance to take place. Auditing services, insurance applications, and security products are ways to protect the decentralized finance community from fraudsters.
The way ahead for Decentralized Finance in 2020 and beyond
Decentralized finance (DeFi) has shown that blockchain does not necessarily mean payments but trading, borrowing, and lending too. The paradigm shift of major financial services is going to invite more users to a unique space. There is a clear differentiation between the State and the Money that reduces the chances of a data breach. Bitcoin riding on Ethereum’s rails is a game to watch out for and gamble with. Experts feel that it is a sign of harmony for an anti-fragile community.