Following the continuing problems with fees and transaction processing in the Ethereum Blockchainchain, some digital currency users and developers have migrated to first-tier networks that are relatively better in terms of scalability. Experts believe that if Ethereum fails to increase the scalability of its network, it may be overtaken by competitors.
to the Report In the ever-changing world of China’s digital currencies and blockchain technology, the competition to launch a user-friendly, high-scalability network that can be accepted on a global scale is an endless marathon that new competitors regularly join.
Undoubtedly, when it comes to network security, number of active users and market value, Bitcoin is the leader in this market. While Ethereum has established itself at the forefront of smart contract-based platforms, continuing problems with the network’s scalability have paved the way for a new generation of Blockchain protocols to gain a foothold in the market.
The weakness of Ethereum governance in recent months has put more pressure on the network, as several first- and second-tier protocols in development have developed incentive programs to attract users and liquidity to their ecosystems.
In the following, we will take a look at some of the first tier smart contract platforms that are competing with each other for the largest share of liquidity in the digital currency market.
The phantom encourages developers to migrate
Phantom is a protocol that uses a non-circular directional graph architecture (DAG) for consensus in its network, and based on this design is theoretically infinitely scalable.
The rapid and low cost of the Phantom has attracted the attention of many digital currency community activists in recent months, as the Ethereum Blockchainchain continues to struggle with high-cost, low-speed transaction verification due to network congestion.
Activities in the digital currency network began to increase after Phantom announced on August 30 that it would reward developers who create new protocols on the network with up to 370 million FTM tokens as part of its incentive program. کرد.
Defi Llama data show that since the launch of the Phantom Incentive program, the total value of locked-in capital in the digital currency network has increased from $ 691 million to a new record of $ 1.44 billion on September 9th.
According to data provided by the Phantom Foundation, the $ 1.44 billion in capital locked into the network has made the Phantom the fourth largest blockchain compatible with the Ethereum virtual machine. Phantom now adds 20,000 items to its addresses daily, processing more than 1.5 million transactions.
Several protocols active in the field of non-currency tokens (NFT) and decentralized finance (DeFi) are being launched on the network, and this growing trend may continue with the migration of liquidity to the Phantom.
The influx of liquidity into the Olench network
Avalanche is another network that has been able to raise some of Ethereum’s liquidity. Olench is a programmable intelligent contract-based platform designed for decentralized applications.
The protocol’s activities intensified after the Avalanche Rush incentive program was launched on August 18 to support decentralized programs in the digital currency network. The program has injected $ 180 million in funding and liquidity into defensive protocols operating in the Olench ecosystem.
Olench Rush started with Curve and Aave, the top two Defy protocols in the Ethereum network, but later expanded to include other protocols such as SushiSwap and Benqi Finance. Collaborate with YAY Games, Kyber Network and ParaSwap.
Defai Lama data show that following the launch of this incentive program, the total value of capital locked in the Olench Protocol has increased from $ 311.5 million on August 18 to a record $ 2.42 billion on September 5. . However, this figure has now dropped to $ 2.11 billion as a result of the recent massive reform of the digital currency market.
Recently, new protocols in the field of decentralized finance and unique tokens have been launched in the Olench network, such as the Topps project. Tops has launched a collection of unparalleled tokens of American Professional Baseball League cards on the Olench network.
This sustained migration was made possible by the launch of the Avalanche Bridge in June, as other users were able to transfer tokens from the Ethereum network to the Olenche network at one-fifth the cost previously required.
Also read: With the launch of Ethereum 2, what will happen to second tier solutions like Paligan?
A hot competition that gets busier
Phantom and Olench are two emerging first-tier networks that have attracted some Ethereum users, but they are not alone.
Other Ethereum Virtual Machine compatible networks that developed earlier this year include Binance Smart Chain and Polygon. Both networks allow users to maintain their assets in the Ethereum Blockchainchain without having to pay high fees for the main network.
Solana is known as the biggest Ethereum threat among the network blocks that are incompatible with the network’s virtual machine, and in the last 7 days, it has the highest value of the total locked capital. Then there is the protocol focused on the Terra stable.
Two other cases that can be mentioned at the end are the self-correcting Blockchain protocol of Tezos and the protocol based on Algorand stock proof.
Defai Lama data show that the total value of locked capital of each of these networks has increased by 207 and 71% in the last 7 days, respectively. At the same time, the price of their tokens has grown significantly thanks to the updates made to these protocols. In Algrand, the acceptance of bitcoin by the El Salvadorian government has been instrumental in this price increase.
As mentioned earlier, and the picture of the total value of locked-in capital shows, the Ethereum network is the leading blockchain of smart contracts in terms of number of users, protocols, and total value of locked-in capital, but its current limitations have opened the door for competitors. To reduce the market share of this network.
It remains to be seen whether the second version of Ethereum will solve the problems ahead, or whether it will eventually leave a new generation of network protocols; A network that provides an optimal solution for the decentralization, security and scalability trilogy in an easy-to-use platform.