Ethereum Scalability a Defi Bottleneck

DeFi

When having even half an eye on the cryptocurrency space in 2020, the surge of new stories and emerging projects around Decentralised Finance or DeFi can not be missed. DeFi, the proponents of this segment hail it as a revolutionary new financial system in which anyone can become a borrower, lender, speculator or investor using decentralised smart contract protocols.

DeFi is believed to offer numerous benefits in comparison to traditional financial services. By August 2020, it is estimated that no less than $6 billion worth of crypto assets are locked in DeFi, indicating the magnitude of the rather newborn notion. As impressive as this figure is, there remains an enormous room for growth, with the value locked figure is likely to continue to increase as yield farming and other forms of lending gain traction.

Besides the many interesting features and promises (or hype) DeFi has to offer, there remain a number of challenges that need resolving, one of those stacles is which includes Scalability.

While the issue of smart-contract vulnerabilities isn’t necessarily specific to Ethereum, the platform has been struggling with scalability issues since 2017. An upgrade, dubbed Ethereum 2.0, has been in the pipeline for several years now. However, the phased implementation means that the scalability challenge is likely to persist for longer yet.

Non-ETH DeFi is HBS’s vision

We seek to develop and provision DeFi services on high-performance blockchain systems besides Ethereum. On the one hand, this will address the scalability issues of Ethereum-based DeFi services. On the other hand, it further diversifies the DeFi ecosystem as a whole, which is in and of itself an embodiment of the decentralisation concept.

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