The rapid growth of the decentralized finance sector (DeFi) took a shock after the recent 17.5% drop in Bitcoin (BTC) price. However, it is likely that the DeFi sector will continue to grow as Bitcoin recovers, especially as users continue to look for high-yield strategies as a means to earn interest on their Bitcoin and crypto holdings.
If the sector continues to grow as it did in the first half of 2020, the Ethereum network will find itself between a rock and a hard place. In recent times, the network has shown several symptoms of being overloaded and unable to scale.
These symptoms include exponential increases in gas usage which lead to higher fees and slower confirmation times. This in turn has made some smart contracts pretty too expensive to use and also causes significant challenges to leveraged DeFi investors and borrowers who are unable to quickly adjust their collateral to avoid liquidations.
Clearly, there is a need for