A New Sheriff in Town – The DeFi ecosystem continues to expand across various blockchains. While Ethereum has long been in the lead, the Binance Smart Chain (BSC) has taken over during periods of high fees. However, it seems that both of them are now seeing a new entrant determined to challenge them.
Polygon: DeFi in perpetual evolution
Polygon, formerly MATIC, is a sidechain of Ethereum whose objective is to deport part of the transactions out of the main chain to reduce the load it supports.
In recent months, the number of users and applications has skyrocketed. Currently, it records several tens of thousands of daily users. This evolution is such that Polygon has just overtaken both Ethereum and BSC in terms of daily transactions.
Indeed, at the end of May, Polygon recorded more than 7.4 million daily transactions, against a little more than 1 million for Ethereum and 5 million for the BSC.
On the one hand, although it is not really the case anymore these last days, Ethereum has been suffering from high transaction fees for many months, slowing down investors with a small portfolio. On the other hand, the protocols of the Binance Smart Chain suffer from serial hacks, in addition to an increasingly common instability on the chain.
As a result, Polygon is taking advantage of these two phenomena to attract users of both blockchains to its own protocols.
A trend led by Aave
At the beginning of last April, the Aave savings and loans protocol announced its migration to the Polygon sidechain. This major event, coupled with a liquidity mining program to entice users to use Aave on Polygon, has allowed the network to expand its user base.
So much so that, of the $10.51 billion deposited on Polygon, $8.1 billion goes to Aave. This accounts for just under half of the funds deposited on Aave, all blockchains combined.
In total, Aave accounts for more than $22 billion deposited across its various instances at the time of writing this article. This makes the ghost protocol the leading DeFi protocol on Ethereum. What will be the next developments in the DeFi ecosystem?
