While it may not be certain whether DApps will converge under one umbrella, developers are working round the clock to introduce integration solutions.
Smart contract blockchain networks led by Ethereum have ushered in a new paradigm in the crypto ecosystem. While Bitcoin remains the most popular digital asset, upcoming innovations in decentralized finance (DeFi) and Non-fungible tokens (NFTs) are attracting more people to this burgeoning space.
As it stands, DeFi and NFTs account for more than half of the total on-chain activity, with NFT-oriented games taking the lion’s share. More interestingly, there has been a notable shift from the Ethereum blockchain following the rise of alternative Layer-1 and Layer-2 networks which offer a cheaper and faster DApp building environment.
Some of the blockchain ecosystems that are challenging Ethereum’s dominance include Solana, Binance Smart Chain and Polygon. These DApp-focused platforms have emerged as perfect fits for creating DeFi and NFT applications given their value proposition over the slow-paced Ethereum network.
That said, let’s take a closer look at the ongoing developments to get a gist of the innovations that are happening in the alternative smart contract ecosystems.
The Rise of Alternative Layer-1 and Layer-2 Networks
Ethereum’s debut in 2015 may have set the stage for the development of DApps but the network continues to face a myriad of challenges. Most notably, it is quite hard for DApps to scale within the Ethereum network which relies on a Proof-of-Work (PoW) consensus. This particular algorithm is energy-intensive, meaning that stakeholders have to allocate a lot of resources to carry out on-chain operations.
Thanks to alternative Layer-1 (Solana and BSC) and Layer-2 networks such as Polygon, small-time innovators and retailers now have an opportunity to interact with the DeFi and NFT markets. Unlike Ethereum, these platforms have a higher throughput, with Solana touting 65,000 transactions per second (tps) while Polygon can handle up to 10,000 tps at an average gas fee of $0.002.
Given these fundamentals, it comes as no surprise that DeFi and NFT innovators are opting for ‘Ethereum killers’. According to DeFi Llama, Solana currently enjoys over $6.6 billion in total value locked (TVL). Meanwhile, Polygon (an Ethereum scaling solution) has a TVL of $4.15 billion; a figure that will likely increase as more crypto users embrace cheaper DeFi and NFT ecosystems.
Emerging DApps on Solana and Polygon
So, what are some of the interesting DApp developments taking place on Solana and Polygon? While we may not be able to summarize all of them in this article, it is worth noting that these alternative DApp platforms feature similar applications to those on Ethereum (DEXs, lending protocols and decentralized betting ecosystems).
One of the leading DApps on Solana is a decentralized exchange dubbed Serum. This DEX features a full limit order book, enabling Solana users to swap native tokens with up to 60% off fees. Serum is powered by the SRM token which is currently trading at $2.5, according to the latest data by Coingecko. As for DeFi and NFT innovations, Solana also hosts prominent applications such as Raydium, Starlas and Chingari’s GARI network ecosystem.
On the other hand, Polygon has become a darling in the development of decentralized market protocols. This Layer-2 network is home to an upcoming betting ecosystem known as LunaFi, a crypto project that enables gamblers to take the side of the house by providing liquidity. Alternatively, one can also bet against the house through LunaBets’s online sportsbook & crypto casino. House LPs and gamblers who win bets are rewarded through LunaFi’s native token $LFI.
Notably, LunaFi is currently in its rollout stages, the project recently launched an Initial Dex Offering (IDO) game on Polygon and Binance Smart Chain. According to the latest medium update, LunaFi will pioneer its IDO in the coming weeks to pave the way for the market release of its decentralized betting protocol. Though still a nascent ecosystem, this Polygon-based DApp is on track to capture the $1 trillion betting market that has long been manipulated by centralized betting firms.
Looking into the Future of DApps
As mentioned in the introduction, the DApp ecosystem is gradually becoming a significant part of the larger crypto market. That being the case, it is highly likely that most of the futuristic crypto innovations will be based on smart contract networks. A trend that is already evident, given that most of the recent crypto projects are DeFi or NFT centered.
While it may not be certain whether DApps will converge under one umbrella, developers are working round the clock to introduce integration solutions. These innovations will enable DeFi and NFT communities to operate across various platforms, including Ethereum, Solana, BSC and Polygon.
A Blockchain geek and crypto enthusiast, have been in the crypto space since 2013 and believes blockchain technology will change the world.