By Lucas Williams
As the decentralized space is spreading at lightning speed, projects need to adjust to the multichain future or the hazard becoming irrelevant. Ethereum (ETH), which has long been in the shadow of Bitcoin (BTC), finally dominates the market in the summer of 2020 decentralized finance. DeFi aims to rebuild the traditional financial system with fewer middlemen and is now used for lending and buying and selling tokens. Most of these decentralized applications (DApps) run on Ethereum, and their network activity will increase in 2020. This activity also shows an upward trend due to income agriculture (also known as liquid mining), which allows holders to use their crypto capital to get rewards.
With the increase of trade activity on Ether, the network’s transaction fee also increased. Even though Ether remained the active and most crowded DeFi blockchain this year. However, other competitors have also emerged in the market. Providing a feasible alternative to Ethereum. Binance Smart Chain (BSC) and Solana (SOL) have emerged as two of the biggest alternative for customers, attracting billions in assets. Apart from these, layer two solutions such as Polygon (MATIC) exchange have also attracted Ether users.
Ether now has real competition when it comes to delivering quick services at low fees. Regardless of Ethereum gas prices reaching a high rate over the previous year and the emergence of these organizations, none of these chains have killed Ethereum at this point.
One of the biggest competitive advantages Ether possesses over its competitors is its identity as a cross-chain exchange. Developers acknowledge the importance of a cross-chain future instead of going for one blockchain platform to build on. Developers are looking forward to building a framework where crypto and blockchain exchanges can coexist. It will improve the overall industry standards.
Because of its prominence quality and longstanding presence in the crypto market, Ethereum has the pioneering benefits and stays the most critical blockchain inside the DeFi blockchain system as of Q1 2021. Yet, with different chains acquiring force, it is these options in contrast to Ethereum that are giving the advantages of quicker exchange speeds and essentially lower expenses.
In the future, Ether might think of reducing its service fee to avoid market competition. On the other hand, experts say that having multiple chains is not a threatening factor, even for Ether fans. However, it will create healthy competition. A competitive environment would benefit the community. Simultaneously, unique coding techniques can introduce another way for engineers to take care of an issue. What is more encouraging is blockchain sector moves further towards multichain. It can be said that even for cryptocurrency trade multichain integration is the future of the digital world.