Ethereum killers are vying for the majority share of the market.
Ethereum is called the parent of all DeFi chains. It was the network that brought the functionality of smart contracts.
Up till January 2021, no other network was able to give Ethereum a tough fight.
However, further down the year, other chains started proving their mettle.
In January 2021, Ethereum hosted 97% of Total Value Locked (TVL) across all chains, according to Defi Llama. Today, the tally stands at 55.89%.
Within just a year, Ethereum’s dominance has waned to a point where it holds just a little above the majority mark.
It is followed by Terra, BSC, Avalanche, Fantom, and Solana as the other top 5 chains by TVL.
These chains are primarily growing due to their speedy, efficient, and affordable transactions.
Ethereum scalability is a big issue. It is pushing developers to take up new routes.
Even many projects on Ethereum are also hosting on other chains. For instance, Uniswap is now on Polygon chain as well.
Nonetheless, for long it has been expected that the future of the crypto-verse is a multichain ecosystem.
This also conforms to Web3 ideals which do not promote monopoly of any person or a thing.
If the present trend continues, in a couple of months Ethereum might even lose its majority.
This trend could also reverse once Ethereum moves to the Proof of Stake (PoS) consensus mechanism, which is touted to be the solution to the present scalability issues.
In that case, it would be interesting to see if the network effect is in favour of Ethereum or other chains.
For users, Ethereum might become a viable option as it is the most mature and secure of all chains.
Decentralized Finance is based on the theory of perfect competition. Anyone can start the network. This model predicts that in future all the players look for differentiation in order to attract consumers. So, the competition among players would ultimately benefit the consumers.
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