Over the past few months since last year, the crypto market has embraced the sector’s newest chapter, the decentralized finance sector. While the sector has shown more promise as the days roll by, there have been many hindering factors that have tried to mar their growth potential. Anyone conversant with the space and how the decentralized finance market works would know the huge fees attached to carrying out transactions on the platforms in the space.
Recently, due to the clear congestion in the last few months, the transaction fees in the sector have skyrocketed to touch a new high. Despite that, analysts have argued that most of the good products are on Ethereum, and if you’re going to enjoy the benefits of good services, you will never have it good or easy.
Avalanche aims to help users reduce transaction fees
In view of this, Avalanche has reached out to one of the biggest decentralized exchanges in the sector, Sushiswap, to switch over to its network. The developers of Avalanche are of the candid opinion that once they can woo Sushiswap from Ethereum and get them on board, they are on their way to displacing Ethereum as the biggest in the sector.
Noticeably, in terms of total value locked down in the decentralized finance sector, Sushiswap is still ranked in the first position. The network also positioned that once Sushiswap switches over to their side, they would extend their offerings in the DeFi sector. The Total Value Locked, also known as TVL, is a way to measure how much the users on different platforms have sent into respective smart contracts on the exchange.
In simple terms, it is a way to measure the popularity of a DeFi protocol. Around January, the developers announced that they had been successful in establishing a bridge to Ethereum. With that, famous protocols like Aave, Wrapped Bitcoin, and Chainlink has already made their switch into the network.
DeFi sector offers privacy and security
While centralized finance is being accepted by everybody due to how popular and easy to operate it is, the decentralized finance is a whole new experience. The decentralized finance sector is a space that seems to bring the service provider and the user together without the need for a financial third party.
Activities like loans, derivatives accounts, and interest accounts are some of the activities carried out in the space. While centralized exchanges allow traders access to only a type of digital asset per trade, decentralized exchanges have allowed users to trade more than one coin simultaneously.
Also, the users are solely in charge of their assets, unlike centralized exchanges responsible for tokens deposited by their users. With Privacy and security as benchmarks in the space, they use smart contracts for their peer-to-peer trading needs. To begin trading on decentralized exchanges, users would first need to deposit Ether, the currency that all protocols accept, built on the blockchain.