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05 December 2020

Ethereum 2.0 to boost DeFi but delayed launch may set the network back

Ethereum 2.0 to boost DeFi but delayed launch may set the network back


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Ethereum 2.0 to boost DeFi but delayed launch may set the network back.

This deposit contract is the first step that would eventually lead to the launch of Ethereum 2.0.

Major players in the DeFi market expect Ethereum 2.0 to have a large impact on the community, as it’s used as the foundational network for most of the DApp DeFi use cases.

Although the scaling capabilities of Ethereum are set to increase multifold due to the launch of Eth2, whether it will be able to scale fast enough to cope with the growth of the DeFi markets remains to be seen.

Sam Bankman-Fried, CEO of FTX, recently stated that he believes the Ethereum 2.0 launch will not be able to cope with the potential growth that could be witnessed in the DeFi market.

The most significant 2.0 update for DeFi would be Phase 1.5 where the existing Ethereum mainnet would be added to the Beacon Chain as a shard chain, transforming the network into a PoS consensus network from the current PoW consensus algorithm.

Even though layer-two solutions are capable of addressing the scalability issues that Ethereum 2.0 might face, the duration through the various phases of the launch might see the DeFi market grow exponentially, as evident through triple-digit gains of DeFi tokens amid the Bitcoin bull run.

Even though most DeFi solutions and DApps use Ethereum as their preferred blockchain, there are other blockchain networks that could contend with it for a share of the DeFi market.

Even though there isn’t just one contender to Ethereum for DeFi and DApps, Ethereum is set to be critically important to DeFi, and that its contribution will only grow as the technology matures

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cointelegraph.com
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