Strong user growth and progress in scaling Ethereum

The global adaptation of Decentralized Finance (DeFi) is advancing at record pace, while Polygon is making enormous strides in scaling Ethereum.

The DeFi sector is on the upswing. In the past seven days, DeFi Logs Total Managed Capital (TVL) climbed from $ 108.93 billion to $ 122.73 billion at press time.

Much of the growth can be traced back to the DeFi protocols of the Binance Smart Chain (BSC) and Ethereum (ETH). These currently occupy the lion’s share of the entire market and, together with the DeFi Llama, have a TVL of 107.2 billion US dollars – almost 87.35 percent of the entire DeFi market.

Not only the DeFi sector and Ethereum reached new highs this week. In a blog post, ConsenSys announcedthat the MetaMask crypto wallet now has over five million active users per month. In October that number was still one million users. MetaMask can serve as a regular crypto wallet. Compared to many other wallets, the strength of MetaMask is that users can interact with decentralized applications.

MetaMask attributes the reasons for this enormous growth to a combination of various factors. On the one hand, interest in applications from decentralized finance has risen sharply and, on the other hand, the NFT hype has led to more and more newcomers using MetaMask.

As another reason is called ConsenSys, the increasing number of users from developing countries.

India and Indonesia are both in the top five countries where MetaMask is used the most. Other developing countries such as Vietnam and Nigeria are also in the top ten.

According to the blog post, many people in these countries do not trust their banks and governments and are therefore looking for alternatives. You will find these alternatives in the world of decentralized finance. Overall, this news is very positive for DeFi-Space. The development shows that the market is currently not driven by hype, but by real adaptation.

Polygon scales Ethereum DeFi projects

The extreme overload of the Ethereum network has caused ETH transaction fees to skyrocket in recent months. At times, a single swap on the decentralized UniSwap exchange cost over 100 US dollars. This dynamic has increased the demand for alternative smart contract platforms, such as the BSC, or for projects such as Polygon (MATIC), which deal with scaling solutions.

Polygon in particular was able to gain increasing acceptance this week. This is mainly due to the fact that the Ethereum DeFi protocol Aave (AAVE) has successfully demonstrated how transactions can be outsourced to a sidechain. The Aave-Polygon integration could meanwhile over two billion dollars Bringing liquidity into the Aave protocol.

Overall, Aave now manages more capital than any other DeFi project. At the time of going to press there are about $ 10.5 billion into Aave’s smart contract.

These Success story has meanwhile also attracted other DeFi projects and some of the top protocols have already announced that they will immediately start integrating their protocol into the Polygon sidechain. These projects include Pooltogheter (POOL), SushiSwap (SUSHI), Open Sea, Curve Finance (CRV) and Decentraland (MANA), see above Lark Davis.

But not only the developer community is cheering, investors in particular are pleased about the lower transaction fees.

It is finally possible again to use the Aave protocol inexpensively. In addition, it can be observed that the Ethereum transaction fees in the last few days dropped sharply are. At the moment it is not yet clear to what extent this can be attributed to scaling solutions such as polygon. Nevertheless, it can be expected in the coming months that the increasing adaptation of scaling solutions will further relieve the Ethereum mainnet.

Beyond that goes Mihailo Bjelic, Co-founder of Polygon, anticipates Aave-like growth for many of the protocols Polygon will adopt. That, in turn, could mean that the entire Ethereum DeFi sector will continue to grow in the coming weeks.