My entry October 5th, 2020 Steemcryptochallenge Week #2 Diving into Diving into DeFi

Rise of DeFi , problems with Ethereum, advantages of Tron and Why Tron’s my favorite DeFi ecosystem.

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Rise of DeFi

As many of you know the low interest rates on bank deposits of less then 1%, combined with record low returns in Stock Markets across the world, coupled with multiple governments providing increased levels of financial support to their citizens who are unemployed-loved due to Covid, resulting in inflationary, but necessary monetary policies across the globe.

I believe the combination of these events has fueled the demand to inflation proof safe haves like precious metals, and Bitcoin. But the concurrent flight or movement of investment capitol from the stock market and interest bearing deposit account has in my opinion fuels the huge growth in DeFi, as I believe the eye popping rates of return in decentralized finance has far exceeded rates of return investors could attain elsewhere, and thus driven Billions of dollars USD into DeFi.

Rise of Ethereum

I think the fact that the majority of the DeFi applications, are based on the Ethereum blockchain, and at least four of which have more then a billion dollars US deposited in them has fueled the tremendous rise in the price of Ethereum. All Ethereum based DeFi applications required transaction fees paid in Ethereum and all liquidity pools, which a huge component of the billions of dollars locked up in DeFi require Ethereum as a dollar value matched pair, or require Ethereum transaction fees. I think the economic importance of this is clearly illustrated by the fact that Ethereum has experienced an almost four fold increase in its price this year. Ethereum has risen from approximately 90 dollars US to 400 dollars US at its high and currently is around 350 dollars US.

However...scale ability and cost Issues continue to plague Ethereum.

The Ethereum blockchain was the third cryptocurrency project created, and the first to have smart contracts functioning on its blockchain. There have been over 2000 blockchain projects since then, and many are much faster and their transaction fees were much lower. This year the price of Ethereum has increased by almost 400%. So transaction fees for DeFi investments can be from 25-60 dollars US. Additionally Ethereum has no ability to increase its transaction speeds, so transactions are not always fast, and sometimes execute the next day. While there have been over 2000 additional blockchain projects built since Ethereum was created, and many of those blockchains have faster transaction speeds and cheaper transaction fees, until now none of these faster cheaper blockchains had the large number of applications that Ethereum has always enjoyed. More importantly, few of these newer blockchains had decentralized finance or DeFi applications, as these very profitable applications were mostly in Ethereum. But that has all changed now on Tron.

Rise of Tron

While 2020 has been a traumatic year for the worlds due to Covid-19 and great financial disruption. But 2020 has been a very successful year for the Tron Ecosystem, and Justin Sun. But the Tron Foundation and Justin Sun have many acquisitions and mergers this year, including Samsung Keystone wallet inclusion, BitTorrent, Dlive, Tron TV, Steemit, Poloniex, Bidao, Opera Browser, and USDT-TRC20 Token.

From a functional perspective, the Tron blockchain features incredibly low transaction fees. Plus the Tron blockchain is rated one of the fastest blockchains in crypto-currency now and in theory, it’s built to scale upwards almost indefinitely with computer server and other computer hardware modifications.

If you add to this the Tron Foundations’ smart use of opensource code to recreate some of the most successful applications on Ethereum like the MakerDao and Uniswap, as Just and JustSwap. Plus the huge financial success of Just DeFi, JustSwap, Suncoin, Pearl DeFi and Pearl Staking, and 1 inch DeFi. Then note the recent China Crypto ranking as the #2 cryptocurrency blockchain in the world, along with Transaction monitoring 3rd party entities ranking Tron as the 3rd busiest blockchain network behind number two Ethereum and number one Bitcoin. You would conclude the Tron is building a massively successful decentralized network for WiFi and other parts of the cryptocurrency universe.

Final piece of Tron’s assent

The biggest issue many traders had with Tron is or was no access to trading Bitcoin or Ethereum on Tron blockchain applications. But that is now an issue of the past. Tron’s recent partnership with Bitgo brings wrapped Bitcoin and wrapped Ethereum to JustSwap and the Tron DeFi ecosystem as TRC20 Tokens, which gives them the potential to be traded on other Tron based applications. So investors can now perform a wide variety of DeFi investment transactions involving the worlds most saught after cryptocurrencies: Bitcoin and Ethereum, on Tron. I repeat for effect, on Tron and with very fast and almost free transactions. In fact wrapped Bitcoin is available now.

A moment of reflection is in order, to acknowledge these accomplishments.

I think this is simply amazing.

Final Words

Justin Sun and his organization have a reputation for being one of the best marketing and attention to new products organizations in all of cryptocurrency. This incredible combination of products, technology and marketing is probably quite annoying to his enemies and detractors, but even they should give the organization credit for its accomplishments. This is why Tron DeFi is my favorite decentralized finance ecosystem.

@shortsegments