It has become something of a cliché to say that Defi, the hottest new sector in finance runs on Ethereum. Nevertheless it is true, as most of the top DApps in the sectors are based on the Ethereum Network.
As we have seen on previous articles the added transaction volume generated by these new protocols has overwhelmed the networks capabilities. Additionally, increased investor interest has caused the price of Ethereum, the networks native coin to soar to new All Time Highs. As a result gas prices that users have to pay in order to execute any type of transaction on the Ethereum Main Net have risen to levels never seen before.
Data from ETH GAS STATION shows a recommended price of 140 Gwei for a standard transaction speed. In the last 30 days three of the top five gas consumers have been Defi Exchanges.
While this is a situation that will be greatly improved with the implementation of Eth2.0 the fact remains that many small investors are finding it hard to transact profitably in this environment. Keep in mind that the next phase of Eth2.0 may very well take a couple of years to arrive.
As a result most Defi Exchanges have been looking into more immediate solutions to the problem at hand. All these exchanges are developing strategies to use layer 2 solutions. Whether it be with zK or Optimistic rollups, the idea is to move some transactions off the Ethereum chain so that they can be executed at a lower cost.
Now Curve, the number one dex by Total Value Locked according to Defi Pulse, has revealed its plans to begin operation on the Polkadot Network. That is different from working on layer 2 because Polkadot actually aims to link different blockchains to allow to move freely from one blockchain to the other.
The folks at Equilibrium are hard at work building an implementation of Curve Finance that will work in their Polkadot parachain. This does not mean that Curve has any plans to leave the Ethereum net, both iterations of the Curve Automated Market Maker will coexist. This move by Curve reaffirms the soundness of Polkadot’s concept and will serve to drive even more developers to the protocol.
