|
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." As expected, the new progress of cross-chain technology is breaking the original "performance" bottleneck of blockchain. At present, DeFi, as the first application of blockchain and the most valuable field, has also encountered a "ceiling", and the progress of cross-chain technology may just be its "timely rain" for breakthrough...
DeFi is once again near its ceiling
If you pay attention to financial technology, then you must know that the progress of DeFi this year is extremely rapid. The explosion of various innovative financial applications has met many needs while creating more needs, attracting countless capital and outstanding talents. However, as the DeFi pie begins to grow bigger and bigger, the growth of both entry funds and active users has begun to slow down or even retreat. Image source: oklink Judging from the market value growth of the 77 major DeFi projects tracked by OKLink, the growth of the DeFi market and applications is particularly obvious. In the past year, June to September were the three months with the fastest growth in the market value of DeFi project applications, increasing by nearly 4 times . After peaking and falling back in early September, it has been hovering at a low level. It began to rebound in November, and is currently some distance away from the previous high. Source: Tokenview Browser If you are also a DeFi user, you will have a more intuitive feeling by observing the gas fees required for daily transactions in Ethereum, the main "battlefield" of DeFi. As shown in the figure above, at the end of August and the beginning of September this year, which was the peak period of DeFi application activity, the average daily gas fee was as high as 15 US dollars per transaction, that is, each transaction cost an average of 100 yuan in handling fees, which is unacceptable for both DeFi players and application developers, because the high gas fees are also very congested due to the limitations of the Ethereum public chain network performance . In many cases, it is common for transactions to fail repeatedly if the gas fee is slightly lower. In the past, how can DeFi continue to develop? Perhaps the above reasons are also a big part of the reason why the market value of DeFi projects suddenly plummeted after reaching a high point, because DeFi currently has a real "ceiling" for growth, but if we look at the amount of funds pledged in DeFi, you will find that the pledged funds have not collapsed like the market value of DeFi, which means that big funds have not left, and the prospects of DeFi are still bright . At present, DeFi seems to have once again come to the vicinity of the last ceiling, so the main problem is how to break through this "ceiling" and welcome a larger amount of capital inflow...
Why cross-chain?
In fact, as we mentioned earlier, Dr. Xiao Feng of Wanxiang’s accurate prediction of the general trend of blockchain has gradually begun to be realized. As early as 2018, Dr. Xiao Feng stated that blockchain will achieve a breakthrough in 2019. Large-scale applications require three conditions, including the blockchain interoperability, ease of use and scalability brought by cross-chain technologies to promote the technical maturity of blockchain. To put it simply, new technologies represented by cross-chain have brought better solutions to the original public chain technology, helping to break through bottlenecks and bring a better user experience. Currently, we see that the main battlefield of DeFi: the public chain Ethereum itself is also seeking changes, but the main reason is that "it is difficult to turn around because the ship is too big", and it is expected to take many years to complete the support for large-scale application landing. But DeFi at this time can no longer wait that long, because it has already taken a step forward, and the market needs to solve the urgent problem. At the same time, the implementation of cross-chain technology solutions also requires a direction that has been proven to be sustainable and applied, and DeFi is undoubtedly the direction at present. Therefore, DeFi and cross-chain are in urgent need of each other. Fortunately, before this, some visionary development teams have already sold the exploration path of cross-chain DeFi, and now they have begun to land one after another...
Cross-chain aggregators are the right time
In the year of DeFi’s explosion, the most “explosive” thing must be YFI, which has “increased ten thousand times”. Regarding YFI, Plain Blockchain has mentioned it many times before. It is essentially a DeFi revenue aggregator. The reason why YFI can explode so quickly is that the “aggregator” has solved many pain points of DeFi users at this time, brought innovative solutions, and became a rigid demand while capturing the most value. Therefore, a large part of this wave of DeFi’s huge dividends has been taken away by the “aggregators”. YFI officially opened the aggregator track and became an "emerging concept". Many teams rushed to "reproduce" the myth, but it seems very difficult because most teams provide nothing new in their solutions. The real innovation may be the addition of cross-chain technology to solve the bottleneck of DeFi itself, bring better user experience and even higher returns, and introduce cross-chain DeFi with better assets from public chains other than Ethereum. Just look at how popular RenBTC and WBTC were in the past to know how urgent the market demand for cross-chain DeFi is. However, these solutions are not perfect. Of course, due to the high threshold of cross-chain technology, there are very few application solutions that have been implemented. Therefore, this may be a great time for "cross-chain aggregators" to show their talents. If any team can be the first to launch such applications, it will definitely be easier to stand out. At present, we can see that there are not many relatively mature solutions. For example, the recently released cross-chain DeFi aggregation platform Farmland Protocol is quite innovative. From its official documents, we know that it is a decentralized cross-chain DeFi mining and transaction distribution platform. It solves the current thorny problems by combining 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, ensuring true decentralization to realize aggregation, mining and profit distribution functions, and avoiding the risk of capital pool running away. Farmland Protocol also distinguishes mining protocols with different risk levels, and by superimposing an insurance protocol layer, it has achieved the safest mining environment currently. In addition, users can also integrate different cross-chain protocols through Farmland to achieve full openness.
Will cross-chain BTC become an important outbreak point for DeFi?
As a part of financial technology, the biggest role of DeFi is definitely to solve the financial needs of users. For example, by staking crypto assets for borrowing, interest generation, liquidity mining, etc. , it can make the crypto assets that have been hoarded and held in the hands flow and obtain rich returns. However, there does not seem to be many heavyweight assets on the Ethereum network except Ethereum itself and some mainstream tokens as high-quality assets. Bitcoin, as a giant in the crypto market and "digital gold", naturally has the largest demand for financial derivatives. Therefore, various cross-chain solutions that map Bitcoin to the Ethereum network have emerged. Moreover, with the development of DeFi, the number of BTC entering the Ethereum network through cross-chain solutions has also increased rapidly. This brings us to the cross-chain platform Farmland mentioned above. Compared with most of the mainstream cross-chain assets anchored to BTC on Ethereum, such as WBTC, imBTC, and tBTC, farmBTC introduced by it has the advantages of being more decentralized, more flexible, and less risky . At the same time, its integrated mining insurance protocol can effectively prevent users from falling into the risks caused by DeFi mining and "losing all their money." In general, Farmland is a platform that integrates cross-chain, DAO and other technologies and adds many innovations at the protocol layer. In particular, the solution proposed for cross-chain Bitcoin is more complete. It allows users to participate in DeFi mining with very low or even zero fees to gain benefits, while also having a good experience, greatly reducing the risk and DeFi threshold. Bitcoin has broken through $20,000, and the overall market sentiment has been mobilized. The development of the Ethereum ecosystem must be the next top priority, and the demand for cross-chain aggregators will also increase. Cross-chain aggregation protocols such as Farmland will face rare opportunities.
summary
DeFi is in an endless evolution and cannot be stopped. With the timely help of cross-chain technology and the good opportunity of Bitcoin opening a new bull market, technical teams like Farmland provide better solutions and can also add more gameplay to DeFi through different innovative combinations to meet more demands and push DeFi to a broader space. What is the future of cross-chain DeFi and Bitcoin? We will wait and see.
|
