Polkadot was recently named the Ethereum Blockchain Killer in a recent article by Bloomberg. With such hype comes probing questions and more than a pinch of skepticism. Ethereum is the blockchain which carried the burden of DeFi upon its shoulders in 2020, much like the Atlas of the blockchain world.
Part of the reason for the hype is that Polkadot’s so-called “next generation network” witnessed a 44% rise in developers in the 12 months ending in May. Polkadot empowers projects to create their own individual blockchains in a network of interoperable chains which can communicate with each other. Polkadot are not the only project to put their faith in interoperability however, as there are other contenders to the cross-chain crown including Cosmos Network.
In fact, there are growing indications that 2021 will be the year the cross-chain technology finally grows out of its infancy, grows up and conquers the cryptosphere.
The Year of DeFi
While the rest of the world worried itself with Covid19, 2020 was the year in which blockchain caught DeFi fever. As the popularity of DeFi protocols grew however, the inherent scaling issues of Ethereum became ever more obvious. Network speeds slowed and fees rose, with the average cost of a transaction rising from a few cents to a peak above $12 in September. While projects such as Matic Network have for some time sought to help assist Ethereum with its own cross-chain bridge, the growing discontent with the pressurized Ethereum network helped to spur increased interest in interoperability.
One of the most impressive projects to recently enter the cross-chain fray has been Fire Protocol. Fire Protocol supports hundreds of digital assets from various chains via their propriety cross-chain hub, bringing hundreds of assets over to the Huobi ecosystem. An integral component of the proposition is Fire Swap, the DEX which provides the asset wrapping for the system. Fire Protocol is designed to combine trading, lending and borrowing in one integrated platform, enhancing liquidity for the market.
Spreading the burden of assets to other chains such as Huobi Smart Eco Chain is part of the promise of interoperability. Fire Protocol is also supported by its own token FIRE, which is used to power Fire Protocol’s economic incentive mechanisms, to support community proposals, and for voting. The company will be launching their IDO on Polkastarter and Uniswap listing subsequently after on December 28.
Fire Protocol is not the only DeFi project to put serious focus into its cross-chain technology. PlasmaPay, which has been designed to bring ‘’DeFi to the masses, is also making much of its own interoperable solution – HyperLoop. Following their successful Token Generation Event this December, the PlasmaPay banking system and DeFi aggregator is hoping to reduce the burden on overworked networks such as Ethereum.
From established networks such as Polkadot and Cosmos, to emerging players such as Fire Protocol and PlasmaPay, there is growing evidence to suggest that cross-chain technology will play a big role in the future of blockchain. If interoperability can finally reach a point in which blockchains are no longer siloed the true potential of the sector may finally be revealed. The technology is now reaching maturity, giving plenty of reasons to believe that 2021 may conquer the cryptosphere in 2021.
Disclaimer: The writer may have a relationship with the people or be a user of the products mentioned. The Daily Chain encourages you to carry out your own research before you make any form of investment and educate yourself about how to stay safe in the crypto space. This article is informational/educational and does not represent financial advice.