Changes of Blockchain Landscape in the DeFi Era - Part 2

2020-11-27 02:50:00 · 2417 views · 5 min read


After sharing his unique perspective on main categories of dapps, what directions have great potential besides DeFi, and what’s the future trend about dapps in Part 1, Kyle brought a more holistic view in Part 2 and talked about public blockchains' development and their ecosystem, as well as his prediction on BTC price in the future.



Part 1

  • About

  • The main categories of DAPP

  • What directions/categories have great potential besides DeFi?

  • What’s the future trend about dapp do you think? 


Part 2

  • What's the current landscape of blockchains in terms of DeFi?

  • How will the public blockchains’ develop?

  • What DeFi leaves us besides the wealth effect?

  • The price of $BTC in the future?




Q5: Besides Ethereum, many blockchains like BSC, EOS, TRON, Klaytn, etc are trying their best to build up their DeFi ecosystem. How is the current landscape of these blockchains in terms of DeFi?


In the past, when we talked about digital currencies, we would classify them into two types,  Bitcoin and altcoins. When we talk about public chains, we also actually classified them into two types, Ethereum and others.



This time, the DeFi boom has brought Ethereum's scaling problem to the public's sight. This had happened once at the end of 2017. The problem resulted in the emerge of a large number of public chains that were faster and cheaper than Ethereum. They tried to build a new ecosystem to compete with Ethereum. Two years have passed, yet they have not achieved much success.



When the DeFi boom once again gives other public chains an opportunity, we find that the public chains that make great progress are those who choose to integrate with Ethereum, For instance, BSC, Matic, Thundercore, etc., they all attract Ethereum's assets and users through cross-chain methods. (Insights: Matic is not just yet another layer 2 scaling solution,  it is merging seamlessly with Ethereum as an ecosystem.) This time, more projects decide to deploy on multiple chains and realize the circulation of cross-chain assets through asset mapping.



Therefore, the public chains not only have a competitive relationship with each other, but also a symbiosis relationship. Different public chains have their own advantages and will be integrated when needed. The future public chains will be interoperable instead of independent.



Q6: There are many blockchains around the world. I saw has supported and tracked over 19 blockchains on your website. However, there are very few blockchains with the ability to be profitable. How will these blockchains develop do you think?


Our criterion for public chains is not their profitability, but their ecosystems. In fact, this DeFi boom has once again demonstrated Ethereum’s dominance. Almost all DeFi products are developed on Ethereum. Ethereum’s strong community is a high-quality base for its entire ecology. How other public chains build up their ecology determines their position in the competition.



In 2018, many public chains that have raised a lot of funds are spending money to build their own ecosystem and distribute rewards to developers, but few succeeded in the end. For example, TRON has basically abandoned the developer community now and is developing projects by itself. The Just project (eg: JUST, JustSwap) and the Sun project are all produced by themselves. I think the public chain teams are going to undertake more and more tasks, and there are several aspects that they must consider:



The first is to lower the user entry barriers. Binance’s BSC and Polkadot can be directly accessed with mainstream wallets. (Insights: Polkadot is a scalable, multichain network built for radical innovation, autonomous governance, and empowering developers.)



The second is the asset allocation on the ecosystem, as well as stablecoins and mainstream asset mapping. This also lowers the entry for transactions and using DeFi. It is impossible for users to use a product if every time they need to open a new wallet and buy a new token.



The third is the flagship dapp, which requires public chains to take the lead of development. Public chains used to wish developers to produce content and bring users in, but it didn't work very well, as the 2 points I mentioned above were difficult, unless you moved the PlayerUnknown's Battlegrounds game to your blockchain. The developer community is here to convert users, not to guide users to your chain. So the final solution is that the public chain itself should take the lead to make the big deal done and bring in the crucial content first. For example, Dapper Labs cooperated with the NBA to launch NFTs, and WAX cooperated with Japanese game companies to bring Street Fighter to bring more traffic.



Therefore, which blockchain has strong resources in the future and is capable to do well in these three points will have the opportunity to improve its ecosystem.



Q7: People may think that crypto exchange appeared, survive and profit because of ICO, what heritage will DeFi leave to us besides the wealth effect? 


DeFi has not dead yet, so we cannot say what heritage it leaves to us. I think DeFi brings several valuable points to the industry:



Open-minded product thinking. This is very important in the blockchain field because the open-source and community participation features make cross-product collaboration and combination more flexible. We see that many DeFi products combine multiple DeFi products to form new products. This is difficult to see in the Web 2.0 era, but this will become more and more popular in the blockchain field in the future. 



Incentive model. We have seen how Compound uses COMP token incentives to fast occupy the market from dozens of users every day to thousands of users and billions of assets, how Sushiswap uses token incentives to seize Uniswap's market share. The token incentive model will be more closely related to a product.



Governance. Through this DeFi boom, many projects have issued their own governance tokens with incentive mechanisms to allow users to participate. Although we have seen many unsuccessful cases at this stage, DAO will definitely be a trend in the future, and governance is a very important part of DAO. Thus, DeFi can be regarded as a pioneer for more and more mature governance mechanisms in the future.


Q8: Last question, $BTC has exceeded $18,000. Many investors have profited from the $BTC recent price booming. How do you see the price of $BTC in the future? 


BTC is definitely getting more and more valuable. Now a growing number of large companies and traditional financial institutions are embracing BTC. This is great news for the industry. BTC is still the stepping stone for most people to enter the blockchain community. Every piece of BTC-related information will bring traffic and new users to the industry, which is the most important thing. Only when there are more users, can it move into the mainstream. In the first year after Apple launched the App Store, 65,000 apps have been listed on the store, while now there are not even 10,000 products on the blockchain in 3 years. 



We still have a long way to go. The blockchain industry will also have greater development. 




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