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Chainlink’s Nazarov sees two ways for mainstream DeFi adoption

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As decentralized finance begins to gain ground, Chainlink co-founder Sergey Nazarov believes there are two ways for more mainstream adoption. 

Speaking at the Smart Contract Summit, Nazarov said he sees two ways DeFi “crosses the chasm” and more Web 2.0 companies to adopt these technologies. 

“The transition occurs in two different key dynamics. The slower path is in the interest yield. We’re currently in a low-interest environment and the appetite to combat yield will be massive. The second, and the faster path, is through counterparty risk. This is where the solvency of brand-based guarantees erodes and math-based contractual guarantees come in. The slow case is compelling, the fast path is scary, but we will be seeing both.”

He added one of the exciting possibilities for DeFi is when people start thinking of blockchain for financial products, transitioning from the idea that blockchain is for tokens only. He said the industry would eventually see investors have crypto because they believe it has superior value over other financial products and not hold crypto only as a means of diversification. 

Nazarov noted data, such as market data, is always essential, but so is privacy. He pointed to its newest acquisition, DECO. The DECO protocol uses advanced cryptography and zero-knowledge proofs to provide enhanced privacy to users. 

Chainlink is a big player in the DeFi space. Its LINK token saw a meteoric rise this year as interest in it is at an all-time high, as previously reported by Cointelegraph.



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A review of SushiSwap roll-outs

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Launched in August 2020 as a fork of the Uniswap decentralized exchange, SushiSwap briefly surpassed its competitor. Now ranking third behind Uniswap’s v3 and v2, the DEX rolls out numerous integrations with major networks beyond its native Ethereum blockchain to offer users a single entry point and lower fees. 

The SushiSwap protocol is one of the largest proponents of a multi-chain future in decentralized finance as the DEX is already live on Ethereum, Binance Smart Chain, Polygon, Avalanche and Fantom. Data by Covalent provides insight on SushiSwap across these five chains.

Data reveals the most popular chain by the number of swaps executed daily is Polygon, as the protocol usage skyrocketed in May. Polygon continues to set new records as it hosted 120,000 swaps on SushiSwap recently.

Left far behind, Ethereum ranked second as of June 2021 by daily swap count. Fantom and Avalanche tend to follow the same trend as Ethereum, although the gaps among the three have been widening since the active trading days in late May. Avalanche and Fantom even outstripped Ethereum by the number of transactions on May 19, when a market-wide liquidation frenzy occurred.

A closer look at daily swap volume shows a different story. The dominance of Ethereum in SushiSwap had been unshakable for a long time, with the peak of trading volume at almost $3 billion on May 21. However, Polygon overtook Ethereum by swap volume in June with a $420-million mark, which highlighted the rapid take-off of the layer-two scalability solutions. 

The reduction of transaction costs is the major driver behind the adoption of a multi-chain approach. SushiSwap has achieved this by offering options outside of Ethereum. Data on gas usage on Ethereum and other chains could not even be compared in one chart due to a dramatic difference in numbers.