Can other public chains follow up DEFI and shake Ethereum's position?

Although many people are reluctant to admit the great significance of DEFI to the blockchain and digital currency market, the money-making effect brought by DEFI is so real that some people call it "really good". After the price of the currency rose and fell, everyone was still pessimistic in the morning, but the decline narrowed in the afternoon, and many people began to discuss various DEFI projects again.

The market enthusiasm has not actually dissipated yet, and DEFI has gradually transitioned from Ethereum to other public chains.

A reader asked before: Are other public chains suitable for DEFI projects? In fact, this question is quite interesting. To do it or not is a key choice, and the reason is very simple.

If other public chains follow DEFI, although this will further detonate the market, in the long run, DEFI will gradually become a way for some project parties to reap profits. In other words, there may be many pitfalls waiting for everyone to jump into.

The simplest example is the story that has been widely discussed in the circle these days, about justswap opening with fake currency, causing investors to lose everything instantly. I won’t go into details here, because there are so many ways to make money in the market, and no one knows what kind of trick will harvest them one day.

Then in the end, DEFI can only evolve from a revolution into a scam, and follow the footsteps of 1CO and IEO. This is naturally not a good thing for the cryptocurrency circle, and may even affect the development of the future bull market.

What if other public chains don’t follow up? This involves the issue of ecology. For public chain projects, it is actually very important to build a good ecology. If the public chain is compared to an office building, then the ecological applications of various projects are the various companies settled in the office building. The ecological projects of a public chain often determine whether the public chain tokens are frequently used, the market demand, the number of developers, the value of the tokens, etc.

DEFI is an important part of the ecosystem. Even if it is not done now, developers of other public chains will have to do it in the future. This is a hurdle that cannot be overcome.

For investors, when investing in other public chains, there are always some people who need to pledge and borrow stablecoins, some people who need to store coins for financial management, and there is also a need to do various cross-chain exchanges. If the public chain project gives up this, it means that its own ecological construction has completely failed, and in the end it can only become a useless chain, and the ending can only be zero.

Other popular DeFi projects on other public chains (Source: Spider Store)

Therefore, various public chain projects are now beginning to focus on DEFI. Another key point is that Ethereum's DEFI performance has given a good answer to many public chain brothers. Other public chains only need to copy Ethereum's DEFI project.

Therefore, we have seen that several public chains are beginning to involve DEFI, most of which involve functions such as decentralized lending, financial management, and decentralized exchange.

So why didn’t other public chains copy more? In fact, this is mainly because decentralized pledge lending, coin deposit and financial management, and flash exchange basically belong to the early DEFI category in the Ethereum field. The relevant projects on Ethereum were basically started several years ago, and the principles and codes are very mature, and the products are relatively complete.

Not only that, these DEFI projects on Ethereum have also experienced extreme market crashes such as the 312 crash, which allowed these project parties' products to promptly discover deficiencies in the rules, so they had time to make up for these problems, so that now projects such as pledge lending, coin deposit management, and flash exchange market making have become very mature.

Therefore, these can make other public chains feel at ease to copy, because no matter how they play, nothing serious will happen. After all, the risks in the code can be audited by auditing companies, but loopholes in the rules can only be revealed through practice.

Of course, other public chains can only learn how to build these simple DEFI entry-level applications. For the entire DEFI, the core competitiveness is still the Ethereum platform, which is something that many public chains cannot surpass.

So why can we say with certainty that the development of DEFI still depends on Ethereum?

In fact, the main reason is the development of the Ethereum ecosystem, which is currently very complete.

Take the decentralized insurance project NXM, which has attracted much attention in recent days. Its main function is to provide insurance services for various smart contracts. It is also the only insurance project in the Ethereum ecosystem. It plays a key role in the DEFI ecosystem on Ethereum. What’s important is that this project has been running for a long time, and there has even been an insurance claim case in the middle.

But if we look at other public chains, basically no public chain can be involved in this kind of business. Of course, the direct reason is that the money-making effect on other public chains is insufficient to attract the attention of the public. We assume that even if a similar insurance project appears on the Tron public chain, its market value will definitely be less than one-tenth of the market value of NXM on Ethereum, which is already a very optimistic scenario.

Simply put, Ethereum can attract a large amount of funds, which is impossible for Tron or other public chains. As the second largest public chain in terms of market value, although Ethereum is now facing the problem of high transaction fees, this will not in any way cause similar significant DEFI projects to abandon Ethereum and turn to other public chains.

Another point is that Ethereum has attracted a large amount of funds, so it is easier to drive the money-making effect, and the money-making effect further drives a large number of developers to settle in, and finally makes the Ethereum ecosystem more prosperous, which further encourages Ethereum to attract more funds.

Developers and funds are important factors in the rise of public chain DEFI. The two are complementary and indispensable. The Ethereum platform has the largest number of public chain developers. These developers are actually the most valuable assets on Ethereum. In addition, Ethereum was released earlier and has occupied the track advantage. Therefore, it is also in a leading position in the subsequent competition. This has been very difficult to shake in the past and now.

Is there a public chain that can pose a threat to Ethereum? There was one before, that is EOS. The DAPP ecosystem of EOS was once very popular and had the opportunity to surpass Ethereum, but it did not take the right path, resulting in a large number of gambling applications occupying the entire EOS ecosystem. EOS became a veritable casino, which eventually caused many gambling projects to fall into disarray. Until now, it has not been able to produce a truly significant or killer DAPP project. Because of this, EOS has missed its own opportunity.

Currently, EOS chain is still dominated by chain games

Although the numerous application projects on Ethereum were little known for a period of time, they are basically the result of long-term accumulation. Early layout is an important aspect. In addition, the fact that DEFI has chosen Ethereum as a development platform also shows the importance of Ethereum in the currency circle. As for the rise in currency prices, it is a natural thing. Now that DEFI has exploded, it has become an object of imitation for many public chains.

In fact, many public chains have also found that no matter how they play, it is difficult to establish an ecosystem. Previously, Ethereum’s 1CO coin issuance was very popular, so many public chains began to have coin issuance functions. Then chain games became popular, and EOS also flourished, so IOST, Ontology, etc. began to do chain games. Now DEFI has emerged on Ethereum, so many public chains have started to do DEFI again.

The market needs a leader to make attempts, and the myth of wealth creation will naturally emerge in the process of attempts, which will then drive the DEFI project to continue to develop. For other public chains, unless they are unique and have their own development trajectory and market demand, they are destined to always follow the hot spots.