Amrit Kumar: Why DeFi Needs to Branch Out From Ethereum – CoinDesk

Amrit Kumar: Why DeFi Needs to Branch Out From Ethereum - CoinDesk

The booming world of decentralized finance (DeFi) has reached new heights in recent weeks as the total value of assets locked in the DeFi ecosystem surpasses $13 billion. Arguably the fastest-growing sector in the crypto industry today, DeFi has witnessed an explosive influx of capital and market participants in just a matter of months. Amid this meteoric rise, Ethereum continues to dominate the DeFi space, holding 96% of the total transaction volume.

While this recent growth has accelerated the pace of innovation and experimentation in the DeFi landscape, it has also brought forward valid concerns around its long-term sustainability, particularly in Ethereum’s scalability challenges and high gas fees. There is no denying that flaws exist in the world of Ethereum-based DeFi, with detractors citing over-complexity and risk as significant roadblocks. From re-entrancy attacks on Uniswap and Lendf.me to Yam Finance’s smart contract coding flaws, the high-profile security incidents in the first half of 2020 alone are indicative that the sector’s explosive growth could be taking place at the expense of its safety and stability.

Amrit Kumar is the president, chief scientific officer and co-founder of Zilliqa, the first public blockchain platform built on sharded architecture.

At the same time, the consolidation of DeFi protocols around the Ethereum platform has raised some lingering existential questions: Beyond technical challenges such as network congestion or security issues, should DeFi – with decentralization at its core – be defined solely by a single network?

It’s a question made more acute by major Ethereum infrastructure provider Infura disrupting the entire network, on Wednesday.

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