Although decentralized finance (DeFi) applications and ecosystem have reached a value of over $ 8 billion, it is still unknown whether this is permanent. Although the total locked-in value in apps has recently risen to over $ 8 billion, this rise may actually endanger the ecosystem itself.
This demand for smart contract based applications actually arose with Yield Farming. The fact that most of these are Ethereum-based protocols has brought a record to the network’s transaction fee averages. Prices of gas, transaction fees in the Ethereum network reached their 2017 bullish levels.
Thanks to this event, ETH miners earn between $ 500,000 and $ 900,000 within hours. Although this may seem like a good development for miners at least now, it is known that it is not sustainable. As transaction fees increase, the number of network congestion and pending transactions will also increase.
DeFi and Ethereum Alert from Alchemy CEO
Nikil Viswanathan, CEO of Alchemy, also mentioned the dangers of this situation in his statement on the subject. The CEO of Alchemy, the blockchain development platform, is definitely familiar with this industry. The famous company currently supports almost 70% of leading DeFi applications and is at the center of this problem.
Stating that the money on DeFi platforms increased 8 times in a short time, Viswanathan admitted that this was exciting. Nevertheless, Viswanathan emphasizes that the increase in transaction fees will be the end for both DeFi and Ethereum, and thinks a solution must be found quickly.
Viswanathan stated that important work has been done on this issue and shared that a solution can be found. However, the experienced name, who also explains the most unfavorable scenario against this, thinks that if the situation goes like this, there may be days when no transactions can be made on the ETH network.