The decentralized finance ecosystem keeps evolving with each passing period, taking new twists and turns in line with the market’s advancement.
The Ethereum blockchain technology has been the most dominant of all in the blockchain sphere as it has no equal. For some time now, no blockchain player has matched its dominating shadow.
But nothing is sure to last, not even technological expertise. As it stands, multiple reports are indicating that other blockchain players have begun to overshadow the dominance of Ethereum’s DeFi network.
Multi-Chain DeFi Is The New Trend
According to data released by Defillama and made available via a tweet by Galaxy Digital Research, the Total Value Locked (TVL) in Ethereum’s DeFi is now at its all-time low. And the share of Ethereum’s DeFi TVL has declined further, to less than 55% in some weeks.
Ethereum’s share of total value locked is at all-time lows trending below 55% for the first time ever
— unfolded. (@cryptounfolded) March 7, 2022
The value of Ethereum’s DeFi TVL at the moment is $108 billion in market cap, which accounts for about 55.53% of the total DeFi market value. The new trend points to the new shape the DeFi market is taking, where multi-chain provides investors with multiple options to choose from, unlike what was obtained in the Ethereum DeFi.
According to Galaxy Digital Research in a previous study, notwithstanding the sheer size of Ethereum’s TVL, its market has been on the decline in the past 6 months, pointing to the rapidly expanding multi-chain DeFi.
Some of the blockchain networks giving Ethereum a good run include BSC, Avalanche, Terra, and Fantom. Terra has the highest TVL market share with 11.10%. The Terra blockchain has seen a rapid rise in the DeFi space, and it has even surpassed BSC.
BSC is next with 5.91% of the TVL market share. Both Avalanche and Fantom have 5.51% and 3.70% TVL market shares.
Another interesting take on the DeFi ecosystem is that it looks distinct from how it was six months ago. The available record revealed that as of October last year, the top 5 DeFi blockchains were in these sequences: Ethereum with 66.46%, BSC with 9.80%, Solana having 5.70%, Terra with 4.99%, and lastly, Polygon with 2.48% of TVL market shares.
What’s Next for Ethereum’s DeFi?
The so-called “Ethereum Killers” appear to have the upper hand against Ethereum at the moment. According to blockchain experts, the situation will not be so for long.
One factor identified to be the main reason for investors’ flocking to other chains has been high transaction fees and low throughput levels.
Ethereum’s issues would soon be bygones as its plan to systematically scale its network is nearing once ETH 2.0 is completed.
The project is expected to enter its next scaling phase in the second quarter of 2022. At that time, Ethereum hopes to stall the continued progress of its rival as soon as the whole scaling plan is executed.
But the other chains seem to possess most of the features of the next ETH 2.0 that Ethereum wants to adopt.