Can Ethereum go to the high-speed development of centralization finance, can it trigger the next round of blockchain bull market?

Historical experience shows that technological achievements and major events can be the cause of the bitcoin bull market. There are a number of recent signs that degrading the ecologically decentralized finance may trigger the next bit of bitcoin bull market.

First, let's review the triggering reasons for the previous bitcoin bull market.

The bitcoin bull market in 2011 was because Bitcoin began to be recognized and accepted by the outside world; the bitcoin bull market in 2013-2014 was due to bitcoin forks and the emergence of the first batch of new coins; the bitcoin bull market in 2017-2018 was Because of the rise of the second round of competition coins and the Token tide driven by the ERC-20 smart contract. In the upcoming 2020, the situation is very similar to that of 2017. Bitcoin is a highly liquid currency, and decentralized finance from Ethereum may trigger the next bull market.

01 Decentralized Finance

Decentralized finance is a movement that takes advantage of all decentralized networks to transform old financial products with a view to becoming a transparent protocol without trust, which would eliminate the need for intermediaries such as banks. All applications for decentralized finance are supported by Ethereum's smart contracts and are fully distributed and transparent. It can be used for payment, peer-to-peer BTC exchange, loans, KYC (know your customer) authentication, stable currency, asset management, citation and decentralized trading platforms.

Decentralized finance has been raging over the past few months with the proliferation of platforms and products that offer DeFi services. Decentralized lending platform MakerDAO has stood out in its adoption of the stable currency Dai, but it is only part of an evolving ecosystem.

Lending agreements, securities-based certificates, derivatives and trading platforms, etc., although their network scalability still has limitations, Ethereum's DeFi landscape is becoming one of its most profound application environments. The story of the Ethereum app has changed dramatically, and at the same time, the popularity of open financial instruments in the product is also consistent with this.

For example, Bloqboard's recent report on open loan agreements highlighted that active loans for four open loan agreements (MakerDAO, Dharma, dYdX and Compound Finance) increased by 1200% to $72 million in 2018.

So, what is the main open financial sector in Ethereum? Let's take a look at the most popular products – open loan agreements, distribution platforms and investments, forecasting markets, trading platforms and open markets, and stable currencies. Compared to any other category of open finance in Ethereum, open loan agreements may have attracted more attention. Decentralized lending is drawing great attention, largely due to the use of Dai and other P2P protocols such as Dharma and the rapid growth of liquidity pool designs such as Pound Compound Finance.

Compared to traditional credit structures, open, decentralized loans have many advantages: integration with digital asset lending/credit, digital asset collateral, real-time transaction settlement and novel secured loan methods, and no credit checks, which means this This type of lending can reach people who cannot use traditional financial services, and standardization and interoperability can also reduce costs through automation.

Ethereum is the foundation of decentralized finance, and it fully controls the protocols and applications built on it. Some people may ask, why aren't other blockchain networks, such as EOS, TRON, and NEO, or even bitcoin networks? Let's first look at the relevant data.

02 DApp recently released its third quarter market assessment report comparing the most popular blockchain networks. In the third quarter, Ethereum had the most active users, with more than twice the number of addresses in the second TRON. Ethereum added nearly seven million new home addresses during this period, and Ethereum has the highest percentage of subscriber growth compared to the second quarter.

Where do all of these growths in Ethereum come from? Not spinach, not a game, but a decentralized financial application. In the third quarter, the total transaction amount of Ethereum DApp reached US$804 million, while the DApp transaction amount in the financial sector accounted for 58%. If 18% of the trading platform field is also included in the scope of decentralized finance, Ethereum goes The actual proportion of centralized financial DApp trading finance is as high as 76%. pointed out in its third-quarter report that decentralized finance showed rapid growth in the third quarter. In the third quarter, decentralized financial DApp transactions reached US$525 million, while Ethereum decentralized finance. DApp's share of the financial sector exceeds 88% of the total transaction amount. This impressive achievement allows Ethereum to overlook TRON, EOS and Bitcoin.

03 Devcon 5

On the other hand, Ethereum and its decentralized financial services are attracting the attention of global institutions and companies. The Ethereum Enterprise Alliance (EEA) owns leading companies such as Microsoft, JPMorgan Chase, Santander, Accenture, ING, Intel and Cisco. Since the alliance was announced in February 2017, its membership has grown to more than 450. The goal of the alliance is to “create a collaborative alliance to enhance Ethereum and its peripheral systems to prepare them for enterprise applications. ”

The Ethereum Enterprise Alliance held the Ethereum Developers Conference Devcon 5 in Osaka on October 8th. The award-winning Token system called “Token Taxonomy Initiative”, or “TTI”, was supported by Microsoft and Intel. The new system uses Hyperleger Besu, an enterprise Ethereum-based enterprise Ethereum client.

Michael Reed, who manages the blockchain program within Intel Software and Solutions, said: "There are three types of Tokens used to motivate participating alliances, namely Reward Token, Reputation Token, and Fine Token. The system can be applied to any alliance to motivate Teamwork. The example we use is a software development alliance like EEA, where we try to motivate activities such as editing and developing specifications, developing and adding code. Then you can impose penalties on negative factors, such as insufficient contributions. Lack of review, no clear deadlines, etc."

The system was developed by the EEA Trusted Computing Working Group, and EEA member and ConsenSys expert Dr. Andreas Freund said: "This work proves that seven completely different EEA members can successfully collaborate and combine emerging technologies in novel ways to bring Come to new economic benefits."

According to experts, TTI is a specification at the Token level, and its generalization can attract the participation of other companies such as IBM, and the interconnection and interoperability of blockchain will become more and more in the future. This means that as long as the Token is issued in accordance with the "TTI" rules, cross-chaining and interoperability can be performed even on different chains.


In addition to these market and business relationship actions , EAA announced the Off-Chain Trusted Compute Specification V1.1 in terms of development and architecture . It is a set of application programming interfaces (APIs) that can be used to "chain" transactions in other locations, then transfer the summary to "chain" to improve scalability and latency, and support verified oracles. .

It uses the recently released specification EEA API, which allows programmers to move data under the chain and ultimately be independent of any trust verification method. Audited APIs are compatible with trusted execution environments, zero-knowledge proofs, and trusted multi-party computing. The EEA also released new specifications on privacy and licensing. Marea Gray, EEA board member and chief architect of Microsoft, said: "EEA brings together standards-based Token and off-chain computing methods to define the blockchain needed to drive global interoperability."

The Ethereum Business Alliance has previously announced the creation of a technical team called the EEA MainnetInitiative, which aims to accelerate and lead the EEA's companies and startups and developers engaged in major network technologies and interoperability solutions. The cooperation provides a channel for the Ethereum main network R&D team to understand more business needs.

Marley Gray, EEA's board member and chief architect, and technology giant Microsoft, said that the technology acceleration of the Ethereum main network requires higher interoperability and scalability, which is what the main network plans to achieve.

All of this shows that the technical performance of the Ethereum main network will be further improved, which will provide a stable technical foundation for its decentralized financial applications . What can be expected is that Ethereum's decentralized financial business will likely develop at a high speed, thus accelerating and promoting the true landing and prosperity of the blockchain.

Original: Wayne

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『Declaration : This article is the author's independent point of view, does not represent the vernacular blockchain position, and does not constitute any investment advice or advice. You are not allowed to reprint this article by any third party without the authorization of the "Baihua Blockchain" sourced from this article.