At the beginning of 2019, Dr. Xiao Feng, who is known as a prophet of industry trends, said in a speech: "After 2019, we will no longer discuss the technical barriers of blockchain." Sure enough, new developments in cross-chain technology are breaking the original "performance" bottleneck of the blockchain. At the moment, DeFi, as the first application and most valuable field of blockchain, has also encountered a "ceiling", and the progress of cross-chain technology may happen to be its breakthrough "timely rain"...
01
DeFi comes to the ceiling again
If you are concerned about financial technology, then you will know that the progress of DeFi this year is amazing. The explosion of various innovative financial applications has met many needs and created more needs, attracting countless capitals and talents. , But as the DeFi cake began to grow bigger and bigger, both the entry capital and the growth of active users began to slow down or even withdraw.
Image source: oklink
Judging from the market value growth of 77 major DeFi projects tracked by Oukeyunchain, the growth of the DeFi market and applications is particularly obvious. In the past year, June to September was the 3 months with the fastest growth in the market value of DeFi projects. , An increase of nearly four times , it has been hovering at a low level after peaking and falling back in early September. It started to rise in November, and there is still some distance from the previous high position.
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If you are also a DeFi user, you will have a more intuitive experience by observing the gas fees that the DeFi master "battlefield" Ethereum needs for daily transactions. As shown in the figure above, at the end of August and early September this year, which is the peak period of DeFi application activity, the average daily gas fee at that time was as high as $15. That is to say, each transaction would cost an average of 100 yuan. Cost, which is unacceptable for both DeFi players and application developers, because Gas costs are high, and due to the limitations of the performance of the Ethereum public chain network, it will be very congested . In many cases, it is common for the GAS fee to be paid a little less and it is impossible to conduct transactions, and even repeated transactions fail. In the past, how can DeFi continue to develop?
Perhaps these are also a large part of the reason why the market value of DeFi projects suddenly plummeted after peaking from a high level, because DeFi currently has a real "ceiling" for growth, but if we look at the amount of funds pledged in DeFi, you will find pledge Funds have not been as avalanche as the market value of DeFi, indicating that big funds have not left, and the future of DeFi is still bright . At present, DeFi seems to have come near the ceiling of the last time again. So the very main problem is how to break through this "ceiling" and welcome more Large inflow of funds...
02Why
is it cross-chain?
In fact, we mentioned earlier that Dr. Feng Xiao’s precise prediction of the blockchain trend has gradually begun to be realized. As early as 2018, Dr. Feng Xiao said that the blockchain will achieve a breakthrough in 2019, and large-scale applications need to be implemented. Among the three conditions, the interoperability, ease of use, and scalability of the blockchain brought by cross-chain technologies have promoted the maturity of the blockchain technology.
A simple understanding is that the new technology represented by cross-chain brings better solutions to the original public chain technology, helps break through the bottleneck, and brings a better user experience.
At present, we see the main battlefield of DeFi: the public chain of Ethereum itself is also seeking to change, but the main thing is that the ship is in a disaster to turn around. It is expected that it will take many years to complete the support for large-scale applications. At this time, DeFi can't wait that long, because it has already stepped out and the market needs to solve its urgent needs. At the same time, the implementation of cross-chain technology solutions also requires a proven sustainable development and application direction, which is undoubtedly DeFi at present. Since then, there is an urgent need between DeFi and cross-chain. Fortunately, before this, some visionary development teams have already sold the exploration of cross-chain DeFi, and now they have begun to land...
03
Cross-chain aggregator is at the time
The most "explosive" thing in the year that DeFi has exploded must be YFI, which has skyrocketed ten thousand times. Regarding YFI, the vernacular blockchain has also been mentioned many times before. It is essentially a DeFi revenue aggregator. . The reason why YFI is able to explode so quickly is that the "aggregator" solves many of the pain points of DeFi users at this time and brings innovative solutions. It has become a just-needed solution while also capturing the most value. So this A large part of the huge dividend of DeFi has been taken away by the "aggregators".
YFI officially opened the aggregator track and became an "emerging concept". Many teams rushed to "re-engrave" the myth, but it seemed very difficult, because most of the solutions provided by the teams were nothing new. To really say innovation, it may be that the addition of cross-chain technology can solve the bottleneck of DeFi itself, bring better user experience, and even higher revenue, and introduce better assets from the public chain outside of Ethereum. DeFi.
Just look at the popularity of RenBTC and WBTC , how urgent the market is for cross-chain DeFi, but these solutions are not perfect. Of course, because the threshold of cross-chain technology is not low, there are very few applications that have landed at present. Therefore, it may be the perfect time for "cross-chain aggregators" to show their talents. If any team can take the lead in launching such applications, it will inevitably stand out more easily.
At present, we can see that there are not many mature solutions. For example, the recently released cross-chain DeFi aggregation platform Farmland Protocol is more innovative. According to its official documents, it is a decentralized cross-chain DeFi The mining and transaction distribution platform solves the current thorny problems by integrating cross-chain technology, unique aggregation and distribution technology, and Dao governance. In addition to helping the transfer of assets on different public chains, it also eliminates GAS fees and ensures that The decentralized realization of aggregation, mining and revenue distribution functions to avoid the risk of running away from the capital pool.
Farmland Protocol also distinguishes mining protocols with different risk levels, and achieves the safest mining environment by overlaying insurance protocol layers. In addition, users can also integrate different cross-chain protocols through farmland to achieve full openness.
04
Cross-chain BTC may become an important flashpoint for DeFi?
As a part of financial technology, DeFi's biggest role is definitely to solve the financial needs of users. For example, through pledge of encrypted assets for borrowing, interest generation, liquidity mining, etc. , it can make the original encryption that has been held and held in the hand. Assets flow and get rich returns, but the encrypted assets on the Ethereum network do not seem to have too many heavyweight assets except for Ethereum itself and some mainstream Tokens as high-quality assets, and Bitcoin, as the giant, " Digital gold” and other status, naturally have the largest financial derivative demand, so various cross-chain solutions that map Bitcoin to the Ethereum network have emerged, and with the development of DeFi, cross-chain solutions have entered the Ethereum network. The number of BTC has also grown rapidly.
This has to mention the cross-chain platform Farmland mentioned earlier. Compared with most mainstream BTC-anchored cross-chain implicit assets on Ethereum, such as WBTC, imBTC, tBTC, the farmBTC introduced by it has More decentralized, more flexible, lower risk and other advantages. At the same time, its integrated mining insurance agreement can well prevent users from falling into the risk of DeFi mining and "losing their money".
In summary, Farmland is a platform that integrates cross-chain, DAO and other technologies and adds many innovations to the protocol layer. In particular, the solution proposed for cross-chain Bitcoin is more complete. It can make users pay very low or even zero The commission is used to participate in DeFi mining to gain benefits, and at the same time, you can get a good experience, which greatly reduces the risk and DeFi threshold. Bitcoin surpassed 20,000 US dollars, and the overall market sentiment was mobilized. The development of the Ethereum ecosystem must be the top priority next. The demand for cross-chain aggregators will also increase, and cross-chain aggregation protocols such as Farmland Will face a rare opportunity.
05
summary
DeFi has been evolving forever, and it can't stop at all. With the timely rain of cross-chain technology, coupled with a good opportunity for Bitcoin to start a new bull market, technical teams such as Farmland have provided better solutions, and DeFi can add more through different innovative combinations. How to play and meet more demands to promote DeFi to a broader space. What is the future of cross-chain DeFi and Bitcoin? We will wait and see.
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"Disclaimer: This article is the author's independent point of view, and does not represent the vernacular blockchain position. This content is only for the popular science learning and exchanges of encryption enthusiasts, and does not constitute investment opinions or suggestions. Please treat it rationally, establish a correct concept, and increase risk awareness. The copyright of the article and the final interpretation right belong to the vernacular blockchain. 』
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