Ethereum dominates DeFi space; ConsenSys report bulletin Wrapped BTC, ETH Insurance and Yield farming.

ConsenSys released the new ethereum DeFi report on 15 July,includes Q2 2020 Decentralized Finance Report that summarizes the Ethereum's Defi ecosystem

By · Jul 16, 2020 . 6min read

Photo by Clifford Photography on Unsplash

The most trusted ethereum blockchain solutions, ConsenSys released the new ethereum DeFi report on 15 July. The blog post included a Q2 2020 Decentralized Finance Report, a summary and analysis of Ethereum’s DeFi ecosystem in Q2.

According to ConsenSys report, the growing tokenization of Bitcoin and the emergence of yield farming have significantly influenced the growth of the decentralized finance sector over the past three months.

The report points out three key events defined the Ethereum (ETH)-dominated decentralized finance (DeFi) space during Q2 2020. Firstly, it includes Bitcoin on Ethereum overtaking BTC on the Lightning Network (LN). Secondly, the most critical security incidents that took to $26 million in losses. Lastly, the release of COMP tokens and the yield farming craze.

In May 2020, the total bitcoin on ethereum exceeded the total of bitcoin [BTC] on Lightning network. ConsenSys report suggests, the event is the key incident as Ethereum developers’ debate that cross-chain interoperability is “anti-maximalist.” Moreover, they believe it is the “more likely future” of blockchain or distributed ledger technology (DLT).

According to the post, the team is allowing the tokenizing of BTC on Ethereum and have been embracing this belief (cross-chain interoperability will enhance blockchains), and it is a success. Moreover, “Ethereum’s DeFi ecosystem has such strong gravity that even BTC holders have been finding ways to use it.”

In Q2 2020, the leading DeFi protocol Compound introduced its COMP governance token. COMP tokens have been distributed to Compound users. According to ConsenSys report, many users maximized their yield farming by using various DeFi strategies to get access to capital and then trading.

Securities and Hacks remains a threat

DeFi market is successful but it is still not very secure. The system is vulnerable to hacks and crypto arbitrage possibilities. ConsenSys report points out three major attacks defined Q2 in DeFi.

The largest being $25 million hacks on The hacker’s IP was exposed and he returned the hacked amount. The other two major hacks executed on Uniswap and Balancer witnessed $340,000 and $450,000 compromised, respectively.

ConsenSys, also pointed out the continuous efforts to make DeFi system more secure,

The report reads, “The DeFi community continues to develop strategies to hedge against [hacks and security breaches,] including: auditing services, security products, and insurance applications. All of this is benefited by the OS nature of DeFi, which allows third parties to monitor DeFi dapps, provide suggestions, and analyze attacks to help protect the entire community in the future.”

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