Decentralized Finance or DeFi is the latest buzz word in the cryptocurrency market and Ethereum DeFi is a top of the list issue. With the recent Uniswap vs Sushiswap DeFi saga, the much-needed mass media attention finally spotlighted the alternative financial technologies.
With the newfound spotlight came the need for scrutiny into existing systems and Ethereum DeFi is top of the list. Martin Froehler, a mathematician, recently told the media that there is no doubt that Ethereum DeFi, is simply the best platform. He explains that the most important thing for DeFi is that it is a global, decentralized platform for money and new kind of applications. And Ethereum DeFi is on the world’s second-largest cryptocurrency platform to capitalize on the market after Bitcoin.
Not all experts are in favor of Ethereum DeFi
Froehler, who happens to be the founder of the Marphor platform furthers that, now it has come to the point that DeFi projects are reaching Ethereum but experts say that the network is not yet able to at its best, and its current capabilities are not up to the standard. Its design is such that everyone needs ether to communicate with it but they of all the issues, the biggest hurdle in adopting it on a large scale as would be the incapability to handle more than 15 transactions in a second and its block time is more than 15 seconds.
However, despite all these issues, Ethereum is a great decentralized platform and Ethereum DeFi is a reality in the making. This stands despite the fact that there are still issues within the network that its creators will have to find a solution to.
Many industry players were speculating that ethereum was not even true to the DeFi hype and wondered if the network could ever be upgraded because Ethereum did not have the capacity to Dei. Gas prices continue to rise, which is why Ethereum is not able to improve its performance even though there is a dire need, and bringing new users to leave the network because of this situation.
On the other hand, during a recent marathon event, the CEO of Decentralized Exchange 1inch, Sergej Kunz stated that Ethereum does not have the capacity to host DeFi. It’s not so easy that everything gets fixed all of a sudden. Everything takes time. While creating a standard, we first have to rethink and convert all the small contracts into code. Where the user can only write their code and control their money, but for all these tasks you have to create a whole new structure and create a new structure.
Lastly, Mounir Benchemled, CEO of ParaSwap expressed that considering Ethereum DeFi we should also consider how layer 2 is unable to solve the user end problems and provide them a friendly environment. The biggest disadvantage would be that users have to worry about not being able to pay the funds immediately to the users, which is of tantamount importance in DeFi platforms. He believes that where some projects may find Ethereum DeFi a suitable option on Ethereum 2.0, it may not be true for all DeFi projects.