Decentralized Finance (DeFi) added a new dimension to the blockchain industry and locked in billions of dollars into the DeFi protocols. Ethereum was the first blockchain that supported DeFi token development but its limited scalability and network congestion issues limited the scope of DeFi development. However, the kind of interest DeFi sparked in the blockchain industry, it has really turned unstoppable and now multiple blockchains have started supporting the development of DeFi applications.
Just like the regular app development where the developers build apps on different operating systems, a lot of DeFi coin development is happening on different blockchains using smart contracts. Smart contracts replace intermediaries and decentralize the entire dApp ecosystem.
DeFi development is really picking pace!!
According to the data reported by dappstats.com, over 3.59k dApps have been developed till date. And in the last 24 hours, over 10.23k DeFi users have used these dApps to trade a 24-hour total volume of $15.87 million. DeFi apps are becoming increasingly popular for a couple of reasons. Firstly, these are open source and anyone can scrutinize these apps. Secondly, these apps run over millions of nodes spread across the globe, hence they never go offline.
While these are the general advantages of apps built on blockchain, different blockchains offer different advantages for DeFi App and DeFi token development.
Ethereum Blockchain for DeFi
This is where it all began, and even with the scalability issues and soaring gas fees, Ethereum continues to be the leading blockchain in the space. Currently, Ethereum is the biggest DeFi app library with over 218 projects built on Ethereum.
Ethereum was the first blockchain to enable developers to build apps on blockchain using smart contracts. Interestingly, Ethereum uses its own language known as Solidity to build DeFi projects using Ethereum Virtual Machine (EVM).
But, DeFi on Ethereum has its own challenges. According to Dune Analytics research, almost 2-5% of transactions on decentralized exchanges running on Ethereum failed. This happened due to insufficient gas prices or slippage issues. This type of issue that crops from the scalability limitation of Ethereum costs users millions of dollars every day. Hence, the need for alternative blockchains cannot be overlooked for DeFi coin development.
Let us explore the popular alternate blockchains for DeFi development.
Binance Smart Chain (BSC)
First things first, Binance offers two chains to users, one is the Binance Chain that does not support smart contract development and another is the Binance Smart Chain (BSC) where the DeFi apps are developed using a smart contract.
The kind of infrastructure that BSC provides is giving Ethereum tough competition. That’s because while BSC is Ethereum Virtual Machine (EVM) compatible, it also supports low-cost and high-speed transactions. With a block time of ~5 seconds and proof-of-authority consensus, DeFi apps built on BSC are faster than the ones built on Ethereum. Additionally, the daily average fee on BSC is around 20+ Gwei, while Ethereum’s average fee ranges between 150 – 375 Gwei. Because of these two facts, the popularity of BSC for DeFi coin development has soared in the last couple of months.
According to DeFiStation, Binance Smart Chain’s current TVL (total value locked) is over $26B.
Polygon (Previously Matic)
Recently, the Polygon network hit a new record-high daily transaction volume of 7.4 million, exceeding the transaction volumes of Ethereum and Binance Smart Chain. The popularity of Polygon soared as it’s a layer-2 scalability solution for Ethereum. To top that, it also hosts a DeFi application ecosystem. As many users have now started looking at Ethereum alternatives for DeFi development and development on Polygon is pretty much similar to development on Ethereum, the latter has gained a lot of traction lately.
Interestingly, DeFi apps developed on Polygon have already been tested on Ethereum. This gives users more confidence to built faster and low-cost DeFi apps on Polygon.
CONCLUSION
The process of DeFi token development and application development is growing exponentially. However, if you are an entrepreneur who plans to get a DeFi app developed, you must make the right choice about the blockchain on which the app will run. That’s because the future of DeFi App development is bright but the apps built on faster blockchains will only sustain.
At Antier Solutions, we work towards strategizing and developing DeFi tokens and applications on a future-proof infrastructure. If you have an idea and want to turn it into a ground-breaking DeFi application, Antier Solutions is your one-stop development service provider.
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