Ethereum is not the only blockchain platform that has taken off as the decentralized financial sector continues to move hand in hand with a thriving cryptocurrency ecosystem. The new year was still good for the DeFi room, as evidenced by the enormous value invested across the many platforms.

The cumulative value of DeFi protocols briefly exceeded $ 27 billion on January 20, according to DappRadar, in part due to the appreciation of the vast majority of cryptocurrency tokens. However, space has in recent months witnessed broader adoption and development.

Ethereum currently plays the role of the smartest smart contract blockchain application for developers and projects to build and run applications and platforms on. The DeFi room is inextricably linked to Ethereum in its current state, with the vast majority of the largest DeFi projects and protocols running on the blockchain. Uniswap, the largest automated marketer according to DeFi Pulse, works with Ethereum, while the rest of the top ten DeFi projects also work with the blockchain network.

While the growth and success of the DeFi platforms have put pressure on the Ethereum network’s ability to process transactions and increase fees, these platforms have resulted in enormous value being locked into the Ethereum ecosystem. That said, Ethereum’s two rivals in the market in early 2021 see resounding success, indicating that more members are growing in the DeFi space.

Polkadot, Chainlink and Near Protocol get a grip
Polkadot is considered one of Ethereum’s brightest competitors. It is a next generation blockchain that connects blockchain, private and public networks. The project was launched by the Web3 Foundation and hopes to improve interoperability between blockchains to launch a decentralized Internet in the future.

Basically, Polkadot launches a multi-chain protocol using so-called “parachains” that allow other blockers to connect to their network as side chains. The protocol can also handle thousands of transactions per second, which has led to a conflict with Ethereum in the eyes of some commentators. Polkadot experienced explosive growth in 2021, with the DOT token price almost doubling since the start of the new year.

Near Protocol is another smart blockchain platform that has grown in popularity since its launch in April 2020. The value of the original NEAR token has recently risen more than 100%. The project is working on a proof of stake protocol, which Ethereum is still working on this year.

Cardano, which is running on evidence of blockchain ownership, is also seeing some growth. The original token, Ada, surpassed Bitcoin Cash (BCH) to become the sixth largest cryptocurrency by market value. The platform has not yet unveiled smart contract functionality, but it is expected to happen this year, so that DeFi platforms can be built on the protocol.

Chainlink is also on this list due to its role in blockchain smart contracts and the DeFi room. Chainlink is a decentralized network of oracles that acts as an intermediary that provides data for smart contracts across different blockchains. According to the project, Chainlink has become the primary tool for the DeFi room as it provides tamper-resistant, high-quality speed data for various DeFi protocols.

The network’s original token, LINK, moved into the top 10 cryptocurrencies by market value in January as Chainlink continued to benefit from the side effects of Defi’s success.

The term “Major revaluation” was introduced in the DeFi room when the original tokens for the popular platforms Synthetix and Aave also entered the top 20 cryptocurrencies by market value at the beginning of the new year. Synthetix Network Token (SNX) and AAVE have seen significant increases in value and have a total market value of over $ 3.5 billion. SNX is a proprietary symbol for Synthetix, which is a liquidity derivative protocol, and Aave is a liquidity protocol that allows users to deposit and borrow various assets in cryptocurrency. They both run on the Ethereum blockchain.

Plenty of space for competing networks
The DeFi room is clearly a thriving sector with plenty of space not only for blockchain, but also for launching countless applications and offerings that have been developed over the past year. Dan Reaser, head of growth at Polkadot on Web3, acknowledged that Ethereum is a leader for DeFi in terms of total closure value.

However, this does not mean that users are reluctant to experiment with alternatives, according to Reaser: “The increase in the number of DeFi platforms built on blockchains other than Ethereum is a very clear sign that DeFi, cryptocurrency and blockchain in general are becoming multifunctional. . Linked.

Source: CoinTelegraph