Gas Fees Are Pushing The DE-FI Migration
Hey JessInvestors
The DE-FI space is going nuts with Uniswap obliterating centralised exchanges when it comes to daily trading volume and there is now over 55 000 BTC locked in wBTC as well as over 300 million dollars now in various DE-FI platforms.
Just as crypto kitties stole the show with NFTs and nearly brought down the ETH network, so too does DE-FI start to kill the ETH network with all these transactions driving up gas fees making people think twice about investing and ruling out smaller transactions.
Often we think that a new chain is there to compete with the chain we like or prefer but that's not actually the case. Each chain does something well and there's a trade-off whenever you double down on something you do well.
Instead of one chain to rule them all, I think chain interoperability will be where we end up. Instead of conversion, we'd have atomic swaps and trades in an instant. I send you one token you get the token you like on your wallet and chain and so we move on.
Chain interoperability
We can already see the beginnings of this with wrapped tokens, as I mentioned wBTC and we now even have wHIVE and wLEO. Wrapped or representative tokens allow you you to lock in you tokens in another chain, let's say for example ETH and then use a representative version of the token in that chain ecosystem.
As I mentioned earlier HIVE has now started its first steps into DE-FI on ETH and with the space being so hot, other chains aren't going to want to be left behind and are going to offer products of their own.
Cosmos chain already has ETHER Mint which allows you to mint ETH tokens on their chain. So let's say I have HIVE.
I can wrap it as an ERC-20 token and turn it into wHIVE and then take that ERC-20 token and mint it on Cosmos as a token.
First steps are always clunky
Yes this isn't an easy walk for the average investor but you can see where I am going with this, this re-minting value on other chains can help lift the load on ETH and have cross-chain DE-FI which could be even more valuable in the future.
If we had SMT's on HIVE for example, what would stop us from minting ERC-20's on HIVE and allowing users to tip one another in any ERC-20 token and so on?
It could open up an entirely new DEX market with more use cases for tokens and ship them on cheaper chains and exchanges making the value of gas and other chain transactions less as people migrate microtransactions to the chains that treat them the best and so on.
Boom and bust, in crypto we trust
I know this DE-FI bubble will pop eventually and end in tears but the infrastructure being built and that will be left behind post-bubble is going to take crypto to new heights and provide us with a higher floor than we had previously, of that I am sure.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
Let's connect
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I'm barely an average investor 😵 and the acronyms and mnemonic terms are beginning to throw me into a loop. Gonna need a glossary of all these terms.
LOL now that I look at it, yes it's for sure a bit much, speaking crypto is a language of its own that's for sure, a crypto glossary isn't a bad idea, I think I should put one together for funzies
A specific date this event will become a reality but the DeFi niche is here to stay. As we speak they build the foundation of it.
I agree the idea has now taken hold and we seeing chains like TRON and EOS get involved to try and drum up activity for their projects let’s see how crazy this goes
I was able to make a 12% return on a TRON yield farm in a week lol
It is a nice return in a short period of time. ;)
Great post! I am excited what role will binance Play in this game, even i dont own any bnb.. Hope ETH 2.0 will come soon
Binance is focusing one getting into Russia but I think they will have their DE-FI it just won’t be as crazy they already have mining pools and market makers maybe they’ll open up their DEX which has been dead now for ages to get more liquidity
I see TRON, EOS and COSMOS are making their plays now! ETH 2 won’t be for some time so this isn’t going to change very soon! That’s why these other chains need to move fast and even then ETH won’t be super cheap just a little cheaper and faster to use
yes, the other competitors definitely benefit from ethereum's high fees. but i still believe that ethereum cannot be pushed off the throne anytime soon, but who knows i like to be convinced of the opposite;)
In terms of innovation, ETH is by far the best, I see consensus that launched ETH bought ETH fork Qorum so they looking for solutions. I think the problem was their tokenomics and now they are stuck with it, but lets see what zk roll ups and sharding can do, its still the most decentralised dapp/smart contract platform, the rest are all pretty centralised.
I think their biggest threat would be Tezos if they can start getting more bakers and stakers to decentralise their network, but for now ETH is still number 1 EVM chain.
sounds interesting, I didn't even know that with consensus .. good that I always stay up to date with your posts haha
And yeah, i think decentralization is the Most important thing
Lol I do the research so you can make the good trades and then I get a 10% fee for my advice 😜 I would like it paid in Pizza coin please
Sounds fair for me 🤣🤣 haha Pizza coin are you shure!?😜🤪
LOL as long as you don't try to pull a Sushiswap on me then I am fine with Pizza
Lol You called it Binance just announced bella.fi you can now farm Bell token with them
Haha right timing but i think i am Not gonna do this 😂
lol me too, Binance chain still pretty cheap to use but I’m not a fan of this yield farming thing! I’m happy with small consistent gains that I can jump in and out of like BlockFI!
Me too, i am a Fan of defi tokens but yield farming by myself is too risky for me ;)
Which DE-FI tokens are you using? Is it just staking you’re doing?
I am not using them i just hold defi tokens ;)
I am holding Link maker compound synthetix kyber loopring and some really small positions in other..
And i am trading ampleforth..
What about you?
In terms of using i Just "use" blockfi
Lol I call that CE-FI though, since its still custodial just using crypto assets, I heard they got a new round of funding and will be launching their card soon so that's exciting
This is the Trickle Down Theory in full effect.
Surprising that such legacy strategy that clearly caters to the centralized elite would actually work with crypto.
I guess that's the magic of extremely inefficient databases.
I get the argument and at the moment yes its trickle down the big boys play in the pricey chains and the rest have the play around in the less secure centralised ones.
What I am hoping to see in the future is a chain specialisation, and what I say is trickle across so the chain that performs x action best gets used and the user actually shouldn't know the difference. They have value in their account and they want to do something and the protocol chooses the most effective method and chain to use.
Or is that too utopian for extremely inefficient databases?
Sounds about right; interoperability is key. Such a statement is way ahead of its time though. The amount of nonsense we're gonna have to trudge through before we get there... yikes!
A frontend that connects to multiple chains and figures out the smartest way to use all the features at its disposal is a form of centralization. In many instances these custom nodes will have to be trusted, and depending on the functionality it will be difficult for third-parties to verify they are playing by the rules.
Plain and simple: if we want to get mainstream adoption we have to dumb this all down quite a bit, and in the process of dumbing it down we return to a place of centralized nodes with traditional usernames and passwords and email account recovery. It's not until we get to that point that we realize we've centralized too much and have to refactor all over again (this time with millions more people widely accepting crypto tech in general so they know more about it). Unless some crazy tipping point gets reached I'd say we are 10-20 years out.
Absolutely it’s a long term goal and yes I agree that a client side service that does any thinking for the user especially the majority of the thinking will be centralized on the protocol level
what I am hoping for is decentralization through competition on the market level by having multiple interoperability client tools that keep each other honest through competition, that’s really the best I can think of that the moment
Just like the price goes through booms and busts in BTC on the road to stability I see the development doing the same thing it booms and then contracts!
Plenty of failures to come from and to learn from I don’t see there being one perfect equalibrium but a mesh network where you get in as your level of complexity, privacy etc requires
Yeah it will be super interesting and complicated... and the entire focus will be simplification for the end-user. Pretty weird.