Charles Hoskinson, the CEO of IOHK, has explained why he thinks Cardano will outperform Ethereum 2.0 in decentralized finance (DeFi) space.
Hoskinson doubts that the Ethereum 2.0 upgrade will result in higher throughput, better scalability, and more security for the Ethereum blockchain, which will highlight the superior design of Cardano in the DeFi ecosystem.
Cardano Targets DeFi and Dapps Markets
Smart contracts seeing as Ethereum killers such as Cardano are setting their focus on decentralized finance (DeFi) and decentralized application (Dapps) markets.
Currently, the DeFi space is majorly powered by Ethereum, with the vast majority of DeFi protocols running on its blockchain.
In an interview on 5th January 2021, Hoskinson explained that Cardano’s slow and steady development has resulted in a simpler and better design compared to what the Ethereum team is building, which will make it easier to perform excellently in the DeFi space and will allow it to scale far better than Ethereum and the capabilities of the major upgrade.
Following the successful Mary hard fork, the first hard fork of two in the transition to Goguen, Cardano (ADA) network has been inching closer to DeFi,
With the advancement to the Goguen era, Charles Hoskinson believes Cardano will be able to challenge Ethereum’s supremacy among the smart contract platforms.
Cardano to Challenge Ethereum 2.0
The Goguen Mary testnet was successfully rolled out a couple of days ago. This implies that native token support will soon go live on the Cardano blockchain, which is expected to open the world of possibilities for the network to support DeFi.
The Cardano design is superior to Ethereum’s as it removes a layer of complexity and its native tokens will be able to transact directly on the blockchain the same way that ADA does. Ethereum’s native tokens must leverage smart contracts on top of the network’s base layer.
In the interview, Hoskinson said that from an engineering point of view, Ethereum’s design is brittle and its complex approach brings with it many trade-offs, such as the ability to resist node failures and the possibility of new exploits, which is why it has been difficult to fully launch Ethereum 2.0.
“They’ve put themselves in a situation where they’re betting on optimistic ZK-Rollups, sharding tech, and these other things, and that’s very brittle and fragile. The science is not very good yet […] they actually go from a half to third byzantine fault tolerance, and there are availability problems, and there’s probably going to be all kinds of new attacks that are going to occur.”