In the increasingly competitive landscape of blockchain technology and cryptocurrencies, protocol innovation and the ability to solve the biggest problems facing the crypto community are necessary for any project that looks to have long-term success in the ecosystem.
Recently, the emergence of layer-2 technology like Arbitrum, Optimism and a bridge to the Avalanche ecosystem is revolutionizing the way investors, builders and developers interact with various protocols because each facilitates fast, low-cost transactions that improve the fundamentals of the decentralized finance (DeFi) ecosystem while also making it easier for retail-sized investors to capitalize on opportunities.
According to data from Token Terminal, DeFi continues to be one of the fastest-growing sectors of the crypto economy as evidenced by increases in the total value locked (TVL) on protocols. Some of the biggest gains from last week occurred on cross-chain compatible networks and layer-two protocols that offer a lower fee environment.
The first on-chain proposal was just executed!
2,500,000 RGT has been minted to sustain the DAO!
Thank you to the community for your input and vote.
Treasury address: https://t.co/YVSqAAN4nu
Transaction: https://t.co/EZRKSXT3jv
— Rari Capital DAO (@RariCapital) September 19, 2021
Related: Bitcoin is great, but real crypto innovation has moved elsewhere
Layer-1 projects and decentralized leveraged exchanges thrive
Another emerging trend shown in the data from Token Terminal is the growing strength of derivatives and options trading protocols as regulators increasingly crack down on centralized exchanges that offer derivatives services and have loose KYC and AML requirements.
Global regulators have increased their scrutiny on leveraged and derivatives trading platforms in recent months, while at the same time, established exchanges like Coinbase have applied to offer futures trading services, indicating that this is one sector poised for continued growth as cryptocurrencies become more mainstream.
dYdX has also benefited from the fact that it operates on a layer-two solution developed in conjunction with StarkWare that enables cross-margined perpetual’s with zero gas costs and minimal trading fees.
Data shows that Ethereum-competitors such as Tezos (XTZ) and Cosmos (ATOM) have al seen an increase in revenue over the past week, suggesting that the layer-1 battle is heating up as high fees on the Ethereum network continue to motivate users to explore other options.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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