While Ethereum is addressing some of these issues by providing solutions such as the Ethereum 2.0 upgrade expected to happen next year, DeFi is slowly moving from Ethereum towards other networks such as Tezos. The blockchain is becoming popular with DeFi because, unlike Ethereum, it offers low gas fees.
Tezos and Decentralized Finance
The Tezos blockchain is a proof-of-stake network that was designed to evolve on its own over time without needing a hard fork. Since its launch, the blockchain has undergone six upgrades, with three of these happening in 2021.
The most recent upgrade was “Granada,” which happened in August this year. The upgrade lowered the block processing time to 30 seconds and lowered the gas consumption of smart contracts. This upgrade made the blockchain stand out against Ethereum, whose gas fees are still at record highs and transaction processing speed is still slow.
This is not the last upgrade that could happen for the Tezos blockchain because, as aforementioned, the blockchain was designed to evolve on its own with time. Hence, it will still have a competitive edge even after Ethereum launches the Eth2.0 version, as it will still be up to speed with the changing needs of DeFi developers.
Besides DeFi, Tezos is also looking towards gaining adoption from non-fungible tokens (NFT) developers who could also boost the growth of this network.
Can Tezos Compete with other Scalable Networks?
Tezos is not the only blockchain that wants to take over Ethereum’s dominance in the DeFi sector. Other blockchains such as Solana, Polkadot and Polygon have been making great strides in this area, pushing towards gaining major adoption.
Last month, Solana shook the entire crypto sector after its native coin, SOL, made eight-fold gains. On the other hand, Polkadot has announced the parachains auction launch, which will implement sharding and boost the network’s speeds. Polygon is also a scalable network that is also seeing adoption by DeFi networks.
Hence, while Tezos is making gains by tapping by improving on the limitations of Ethereum, it is still facing competition from other blockchains that also want to attract DeFi developers. These networks are also making major gains in non-fungible tokens (NFTs), another area that Tezos is also exploring.