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Golden Observation丨Will DeFi "force" Ethereum to speed up the search-ethexc for scaling solutions?



Jinjin Finance Blockchain August 25 News Since the beginning of this year, the average daily active-ethexc address and average daily transaction volume of the Ethereum network have shown a steady growth trend, and have soared to the level during the previous 2017-2018 bull market, which shows that more and more More and more people are using the Ethereum network. And many platforms with large trading volumes come from the DeFi field, such as, Synthetix and Matcha, which is also the main reason why decentralized financial transactions have led to a surge in activity on the Ethereum chain. But as the activity on the Ethereum chain continues to increase, the network becomes more and more congested, and the result of this situation is that transaction costs become higher and more expensive. Generally speaking, miners fill blocks with transactions from the transaction pool. If the transaction holder receives transactions too quickly, users will have to pay a higher fee to push their transactions to the front of the transaction queue. If the user sets the fee too low, then the transaction is likely to stay in the transaction for a long time before being mined by miners. For DeFi traders looking for constant change and chasing the highest yield, this transaction delay can have disastrous consequences for their investment returns. Golden Noon News | November 15th at noon list of important developments: 7:00-12:00 Keywords: Ethereum 2.0, digital economy, blockchain industry innovation and application conference 1. The number of Ethereum 2.0 deposit mortgage ETH reached 82,080 pieces 15.6% completed; 2.PlanB: Bitcoin's rise to $16,000 is just the beginning of a bull market; 3. Peking University Huang Yiping: The digital economy is not a short-term prosperity, but may be a long-term trend; 4. Elected senator from Wyoming: Hope to "bring Bitcoin into National Dialogue”; 5. Wang Xiang, Operation Director of Xinhuanet’s “Tracing China”: Blockchain promotes the establishment and development of modern agricultural brands; 6. Bitcoin fluctuated around $15,900, Ethereum fell below $460, and mainstream currencies generally fell . [2020/11/15 20:52:14] Therefore, the problem is gradually exposed. Thanks to the rapid development of the DeFi industry, the activity on the chain has increased. Although it is beneficial to Ethereum, the lower throughput of the Ethereum network itself is In the case of a large amount of load, it becomes inefficient and expensive, and in turn, high transaction fees will hinder the development of DeFi. The encryption community began to discover that while the DeFi ecosystem is rapidly rising and gradually evolving into an unstoppable new force, the expansion speed of Ethereum’s capacity is not satisfactory, and its limitations are hindering the development of DeFi. Some DeFi projects Already want to "escape" Ethereum. Golden Noon News | A list of important developments at noon on August 15: 7:00-12:00 Keywords: Trace China, DeFi, RenVM, Ruble 1. Xinhuanet’s “Trace China” Jiangxi node was officially established. 2. The total value of locked assets in the current DeFi protocol exceeds 7 billion US dollars. 3. RenVM's single-day trading volume hit a record high of 19 million US dollars. 4. The Ethereum mutual insurance Nexus Mutual has nearly 100,000 Ethereum locked positions. 5. Pan Zhenzhou, former vice minister of the Ministry of Culture: Blockchain makes the Internet an Internet that people trust. 6. Galaxy Digital's revenue in the second quarter was US$38 million. It has been researching DeFi at the protocol level. 7. Chairman of the Financial Market Committee of the Russian Parliament: Crypto assets will not be legalized as a substitute for the ruble. 8. Bitcoin continued to rise, with a daily low of $11,701.49 and a high of $11,980. [2020/8/15] In order to solve this network bottleneck problem, developers in the Ethereum community have worked hard to try to transfer the network consensus algorithm from proof of work (PoW) to proof of stake (PoS), which is expected to Bring a cheaper and more efficient experience to Ethereum users. But unfortunately, due to the increasing number of on-chain (value) transactions and on-chain activities, the risky transactions of Ethereum-based mortgage tokens have also become very large, and the upgrade of Ethereum 2.0 has been delayed again and again. If the upgrade is carried out smoothly, then TPS barriers will exacerbate transaction costs, and the prosperity of DeFi will undoubtedly be limited to a certain extent. Golden Morning News | The South Korean government recognizes the blockchain association CBOE Bitcoin futures net short position has recorded a historical low: 1. CBOE Bitcoin futures net short position has recorded a historical low. 2. TimiDNA, a blockchain healthcare company, uses blockchain technology to grant ownership of genetic data to customers. 3. Chengdu Municipal People's Government: Actively deploy blockchain and other cutting-edge technology fields. 4. The former HSBC computer expert was suspected of being wanted in Switzerland for espionage and participated in the promotion of the cryptocurrency Taboow. 5. The U.S. Digital Currency Mining Custody Company received a decision to delist from Nasdaq. 6. IBM has partnered with blockchain company Hacera to launch a Yellow Pages-like project. 7. R3 will launch the Corda Mall, which includes 200 companies developing CorDapp. 8. The audit company Verady joined the Wall Street Blockchain Alliance as a member. 9. The South Korean government recognizes the Blockchain Association. [2018/9/15] At the same time that Ethereum 2.0 was unable to go online, in order to solve the current bottleneck problem, developers launched the "Ethereum 1.x" plan, which focuses on building Ethereum 2.0 in parallel Improve existing network governance. This scaling solution is available to meet the ever-increasing activity on the Ethereum network. Several teams are currently working on various proposals related to Ethereum 1.x, including Ethereum improvement proposals EIP-1108, EIP-1844, EIP-2028, and EIP-2200, which can reduce on-chain transaction fees and Build on-chain strengths for implementing off-chain solutions. Jinse Finance’s exclusive analysis of responsibility awareness determines that prudence in financial supervision is the fundamental goal of serving the real economy first: Yi Gang, the central bank, emphasized the word “cautious” when talking about virtual currency at the Boao Forum today, and pointed out that “avoiding some possible negative effects, To enable digital currency to better serve the economy, this also includes blockchain technology and financial technology. Overall, our supervision of virtual currency is very strict, and at the same time, we are also studying how to play digital currency. Positive energy and better service to the real economy." Jinse Finance's exclusive analysis shows that the direction of "moving from the virtual to the real" remains unchanged, and one should be cautious in how to adjust the regulatory scale and avoid hasty. At present, cryptocurrencies have not yet fully interacted with the real economy on a global scale, lacking technical conditions and realistic foundations to support a large-scale real economy, and the overall situation is still relatively "virtual", with many uncertain factors affecting it. Earlier, Yi Gang had already talked about "resolutely banning illegal financial activities", and Zhou Xiaochuan had also talked about his views on digital currency before. Jinse Finance believes that: First, due to the emerging blockchain, investors, especially small and medium-sized investors, are more likely to follow the trend in new fields, which can easily form systemic risks, and the characteristics of decentralization also make it difficult for the government to "rescue the market" in the past. Second, China has a large economy and a strong demand for financial services, which is of great importance to the world. Financial policies need the support of the overall situation and sense of responsibility; at the same time, maintaining a strong continuity has always been the advantage and In order not to take detours, policies should be more cautious. On the contrary, as a contrast, the careless policy has indeed caused trouble and repetition. Today, according to the Nikkei news report, at the Japanese Virtual Currency Seminar held yesterday, many participants put forward suggestions that market access standards should be improved and supervision of the virtual currency market strengthened. In the past, due to miscalculation of market development and overly lenient policies, risks have been exacerbated to a certain extent. Japan, which has always had a "good policy environment" before, has also strengthened the review of digital currency. After it is released, it still needs to be tightened. The policy formulation is not cautious, and repeated policies are not conducive to the development of the industry. [2018/4/11] In addition, there are currently at least four effective Ethereum scaling solutions, namely: State channels, Plasma, Optimistic Rollup, and zero-knowledge proof. Golden Finance News: Within 5 days of Quantum Chain’s listing, Bithumb’s trading volume reached 51% of the world’s trading volume, becoming the overwhelming number one. [2017/11/10] However, there is a major disadvantage of state channels and Plasma, that is, there is no strong support for smart contracts, which limits their wide-scale application. Therefore, another option, Optimistic Rollups, began to appear in the market, which can increase the transaction efficiency to 1000 TPS on the basis of supporting smart contracts. Optimistic rollups provide a setup similar to Proof of Stake, as an off-chain aggregator that can act like a validator (node). All transactions that occur on Layer 2, such as smart contract interactions, etc., are regularly aggregated by nodes that have mortgaged tokens, and then submitted to Layer 1. Anyone can verify these commits, but as long as they find out that the node is performing malicious actions, they will lose all staked tokens. Another way to take computation off-chain is to use zero-knowledge proofs. Zero-knowledge proof allows the party involved in the calculation to prove that it has actually completed the calculation without telling anyone how it was calculated. A zero-knowledge proof does not provide a complete history of operations, but a mathematical proof of the creation of this history. These proofs are much smaller in capacity than verifying transactions directly on the blockchain, thus allowing for more efficient use of blockchain space while still ensuring data integrity. Zero-knowledge proof is very useful for decentralized exchanges (DEX), because the trading platform can transfer order processing operations to off-chain, ensuring that the Ethereum network has enough bandwidth to process transactions, which in turn makes decentralized exchanges easier to use . As we all know, Ethereum currently has the largest developer community in the blockchain industry. The reason why developers can gather on Ethereum is mainly because the Ethereum community has a huge user base. So, who is building so many Ethereum scaling solutions? First of all, the more popular revised version of Plasma and the strategy based on the proof-of-stake consensus algorithm have been used by project tokens such as Matic Network, and such solutions are more potentially valuable for DeFi projects. Raiden Network, Peruen Network, State Channel, Celer Network, Machinomy, FunFair, and Liquidity Network are also building Ethereum state channels, but the niche market for state channels is small, and they are not yet widely popular. Secondly, Optimistic Rollup may be the Ethereum scalability solution that has attracted the most attention from DeFi projects. Among them, Unipig is worth noting, which is jointly built by Plasma Group and Uniswap exchange. Optimistic Rollup is a Layer 2 solution that can extend the interoperable and universal Solidity smart contracts on Ethereum, so that DeFi can be further developed. After the release of Unipig, Synthetix also followed up. The exchange tokenized traditional financial instruments (such as commodities and foreign exchange) and made them available for cryptocurrency transactions, and the transaction confirmation time was compressed to sub-second level, thereby ensuring user experience Comparable to other centralized exchanges. In addition, zero-knowledge proofs in the form of ZK-STARKS were developed by StarkWare and are now also adopted by DeFi projects. ZK-STARKS can enable zero-knowledge proof based on trust-free. A good example is the decentralized exchange Ethfinex, which is also the first decentralized exchange to implement ZK-STARKS. The current transaction throughput can reach more than 9,000 TPS . The company also received $4 million in funding and a 6,000 ETH reward from the Ethereum Foundation. Of course, in addition to the direction of expansion, there are other Ethereum solutions that support DeFi. For example, DEX aggregation service provider 1inch introduced Chi Gastoken, which allows users to buy and store gas at low prices, but the main disadvantage is When the Ethereum network continues to be congested, the Gastoken minted earlier will be exhausted, and at the same time, there will be no chance to mint new tokens due to the high gas price, which in turn makes the solution unable to perform as expected. In addition, with the rise of Cosmos and other blockchains, and FTX recently announced its entry, a nascent cross-chain ecosystem is emerging. Investors have discovered that DeFi can actually be not limited to Ethereum. On-chain DeFi is getting more and more exciting. The news of FTX launching non-custodial trading services on Solana has greatly boosted the popularity of non-Ethereum DeFi protocols. Although the broader altcoin market has corrected sharply in the past few months, Kave, ThorChain, Switcheo and Band Protocol, etc. DeFi tokens have recently seen an increase of more than 10%. These agreements are all helpful to realize the vision of a cross-chain DeFi ecosystem. In summary, although Ethereum is unlikely to transform into a fully functional proof-of-stake network in the short term, These solutions still have practical value. Because the scale of the blockchain industry is still small, the additional throughput of thousands of TPS based on the support of smart contracts is enough for Ethereum to continue to take advantage of the popularity of DeFi. And so far, Ethereum is still the most powerful and mature DeFi ecosystem. In fact, most of the other blockchains entering the DeFi field hope to "connect and build a bridge" with Ethereum in order to make better use of the liquidity from Ethereum.


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