Traders have begun to seriously question the limitations of Ethereum network. Whether it is the future of decentralized finance as it struggles continually with scalability and cost.
Currently the DeFi space is linked intrinsically with Ethereum. With the majority of the biggest DeFi protocols run on the Ethereum blockchain. But despite its popularity, the increase in DeFi applications and users has put a major strain on its infrastructure.
As the blockchain stands now, the most leveraged DeFi network is only capable of processing roughly 10-14 transactions per second at full load. Just over 30 transactions if blocks were fully optimized. The very limited throughput in transactions on Ethereum has created significant issues with most DeFi applications, namely high fees.
With this is going on, Cardano, created by former Ethereum co-founder Charles Hoskinson, has increased by 30% over the past 24 hours. This has been due in large part by upcoming developments for the protocol and a favorable sentiment among cryptocurrency speculators. The price is currently at its highest since January of 2018.
Cardano Proof-Of-Stake Protocol
Cardano is a proof-of-stake protocol that allows users to run smart contracts atop its blockchain. Its current version, “Shelly” marked the start of Cardano’s second phase by bringing in staking rewards in 2020. Cardano will soon see the launch of native assets on its blockchain. Allowing users to issue their own tokens that, in turn, run on Cardano. Developers say that these tokens will be faster and more scalable than existing blockchains, such as the ERC-20 tokens which run on Ethereum.
In March, Cardano’s staking pools will be completely decentralized which is expected to be another positive catalyst.
Polkadot is another potential rival of Ethereum and is considered a new-generation blockchain. It connects private and public blockchains and networks through a multichain protocol. Using what it calls “parachains,” which allow other blockchains to connect as sidechains.
Despite all of this, Ethereum is unlikely to be dethroned by either, or anyone else in the short-term. As they outdo the competition in a number of key factors that isn’t likely to change anytime soon.
