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Ethereum still not ready for DeFi, say some critics

Published

3 Monaten ago

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As DeFi projects flock to Ethereum, experts warn the network is not yet ready to support the frenzy.

Martin Froehler, a mathematician, former hedge fund manager, and founder of Austrian crypto trading platform Morpher, told Cointelegraph that although Ethereum is the “best thing [the blockchain industry] has” for DeFi, the current capabilities of the network are not enough:

“Ethereum can only handle about 15 transactions per second and has a block-time of 15 seconds, which is an eternity in finance. By design everyone interacting with it needs Ether. That is a huge barrier to entry and mass adoption.”

Froehler considers Ethereum the most decentralized smart contract platform. But because the network still has issues, developers have had to look for solutions to counter them. 

Froehler added: 

“There is cryptographic proof for everything that happens on the sidechain on Ethereum. (…) People are able [to] trade without needing Ether. They don’t pay any fees, enjoy a settlement time of one second, and are completely independent of the many congestions on the Ethereum network.”

Many industry players feel Ethereum did not anticipate the DeFi hype, and even with the upcoming network upgrade, Ethereum 2.0, the network is still not ready to service DeFi. 

Ethereum 2.0 should improve performance, but its high gas prices may scare off new users. Sergej Kunz, CEO of decentralized exchange 1inch, said during Cointelegraph China’s DeFi Marathon event on Sept. 3, that the Ethereum infrastructure lacks the capacity to host the DeFi environment:

“You have to rethink everything. You can migrate smart contracts to the code but it’s not scalable. To be able to scale, you have to create standards and bring new protocols based on the new sharded architecture, such as NEAR which is similar to Ethereum 2.0.”

At the same event, Mounir Benchemled, founder and CEO of middleware layer ParaSwap, pointed out that the complexity of explaining how layer-2 works to end-users “and the risk of not being able to pay the funds immediately to these users” cause the most concern. Benchemled also said that it is not practical for all DeFi projects to move to Ethereum 2.0:

“For it to work, all applications would need to move towards one single platform. Major projects might have consensus. However, for other projects who have their own agendas, it might be hard. New bridges will be built to allow interoperability.”

Despite the challenges ahead for the Ethereum blockchain, Morpher’s Froehler joins the other pro-DeFi voices in saying, “DeFi is here to stay.”



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Ethereum

Crypto enthusiasts could make $122K per year mining Ethereum with this setup

Published

2 Minuten ago

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Dezember 29, 2020

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Simon Byrne has taken at-home crypto mining to a whole new level as he looks to capitalize on Ethereum’s (ETH) enormous price potential. 

As first reported by Anthony Garreffa, Byrne has set up an ETH mining rig consisting of 78 GeForce RTX 3080 graphics cards. Although the RTX 3080 is marketed toward high-end PC gamers, crypto miners are using these powerful specs to enhance their capabilities.

With each card using roughly 300W of power, Byrne’s setup uses 23.4KW of energy. And that doesn’t even factor in associated costs like AC. All said, his electricity bill is estimated to run up to around $2,166 per month.

The RTX 3080 launched in September at a price of $699, but supply shortages have caused the per-unit cost to swell to $1,199. At the shortage price, that’s a price tag of $93,522 for Byrne’s setup.

Still, these costs could be offset by the operation’s mining capability. One GeForce RTX 3080 graphic card has a hash rate of around 83MH/s using Ethash, which should generate roughly 0.22236870 ETH per month, according to Garreffa. All 78 cards would therefore generate 17.3 ETH per month, which is equivalent to around $12,352 at today’s prices.

Stripping away the electricity costs, that’s roughly $10,200 per month or $122,000 per year. And that’s not factoring in Ethereum’s price potential during the next bull market.

Ether’s price zipped past $700 over the weekend, the first such move since mid-2018. The return of altseason, as some have predicted, could send ETH’s price even higher over the medium term as investors cycle from Bitcoin to other large-cap cryptocurrencies.