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Decentralized finance (DeFi) has enjoyed a significant year with several protocols exceeding expectations. Crypto enthusiasts poured into the sector as several DeFi protocols managed to increase their value exponentially.
Ethereum leads the way.
DeFi protocols have always been at the forefront of discussions within the crypto community since its boom began. Several blockchain projects have tried to focus on decentralized finance, but not surprisingly, Ethereum holds commanding dominance.
DappRadar revealed in its latest report that 96% of DeFi transactions are made on the Ethereum blockchain. Ethereum experienced over $126 billion worth of DeFi transactions during the third quarter of the year.
Ethereum’s huge dominance is not a huge surprise since most Dapps are built on its blockchain. Chainlink, the oracle blockchain, which spurred the surge in price within the DeFi sector, is also based on the Ethereum blockchain.
Ethereum has continued to dominate despite the emergence of alternatives like Tron and EOS. While Tron supporters claim the Tron Network offers greater technical capabilities than Ethereum, including lower transaction times and minimal fees, this has had little to no effect.
Developers continue to launch DeFi protocols on Ethereum despite the difficulties currently plaguing the network.
Mixed results for Ethereum blockchain
Ethereum also leads with 57% of active wallets per day, with Tron a distant second at 35% and EOS with 5%. Although these figures suggest that the Ethereum blockchain is growing, there have been mixed effects so far.
Ethereum is currently worth around $384 from $107; it was trading in April, a major positive. However, the increase in activity on the Ethereum platform means that users have to contend with rising transaction fees. Ethereum transaction fees have increased multiple folds with the average fee hitting record highs in September.
Furthermore, there has been a delay in transaction confirmation times, exposing the network scalability problems.
Despite these problems, it did not prevent the DeFi boom from succeeding, and there are expectations that the impending migration to Ethereum 2.0 would resolve these lingering issues.