More and more scaling solutions for Ethereum (ETH) want to secure part of the market for Decentralized Finance (DeFi). In addition to Polygon (MATIC), Arbitrum in particular has attracted attention in the past few days – which projects are using the scaling solution?
The DeFi market had to bleed again in the past few days. Compared to the previous week, Total Value Locked (TVL) dropped from $ 113.28 billion to $ 104.41 billion at the time of going to press.
This means that the capital managed by DeFi protocols has shrunk by a total of 7.83 percent in the last seven days. In addition, the “ETF token” DeFi Pulse Index (DPI) has also lost 21.11 percent of its value this week. At press time, DPI is trading at $ 359.34.
Despite the poor price development of many DeFi tokens, a lot has happened this week. Especially projects dealing with Ethereum scaling solutions have made great strides.
Star investor Mark Cuban relies on Polygon (MATIC)
The Ethereum scaling solution Polygon has been able to grow continuously in the last few weeks and this was also reflected in the strong price growth of MATIC. In addition, DeFi heavyweights such as SushiSwap (SUSHI), Aave (AAVE) and Curve (CRV) rely on the scaling solution from Polygon. This allowed Polygon’s TVL to jump from under $ 4 billion to $ 6.71 billion in the past 30 days.
But not only the DeFi projects seem to recognize the potential of the scaling solution, the billion dollar US investor Mark Cuban has also been relying on Polygon since this week.
But despite the prominent supporter, Polygon is not yet perfect. After the ETH scaling solution team announced a new SDK developer kit on May 26th, a technical malfunction occurred a short time later. The Matic Bridge, which enables tokens to be transferred from the Ethereum blockchain to the Polygon sidechain, was impassable for a short time.
Thereupon Polygon co-founder Sandeep set up Nailwal Twitter realized that the problem was a software bug that was quickly fixed by a “hot fix”.
Another ETH scaling solution enters the DeFi market
Arbitrum is another scaling solution that could shake up the DeFi space in the next few months. In contrast to Polygon, the scaling does not rely on sidechains, but on so-called optimistic rollups. On May 28th, Arbitrum announced that it had opened its mainnet to developers. This means that developers on the Arbitrum Withelist can now use the scaling solution. One of the names on the Withelist is the decentralized exchange UniSwap (UNI).
Arbitrum appeared to appear overnight, but the project is already enjoying great popularity in the UniSwap community. An overwhelming majority of UNI owners voted in a governace decision that the decentralized exchange should integrate Arbitrum into its V3 protocol. In response to the vote, UniSwap inventor Hayden Adams also expressed his satisfaction Twitter and announced that they are already working on integrating Arbitrum into DEX’s V3 protocol. However, not only UniSwap relies on Arbitrum, but also the decentralized exchange Bancor and SushiSwap plan an integration.