CWC Newsletter #41 (October 14, 2020)
By Taylor Ryker, Analyst
Teamwork is the Dreamwork: EOS supporting Ethereum dApps
If you did not know about the world of blockchain and were only privy to the mainstream headlines of the latest scandal or controversy, you would probably think that cryptocurrency was only a handful of tokens, primarily Bitcoin and Ethereum.
As a store of value, Bitcoin is shaping up to be the digital gold of the internet. On the other hand, Ethereum, a platform that can host applications like the apps on your smartphone, is probably at the moment the most talked-about due to the latest explosion in the cryptocurrency space: decentralized finance.
Decentralized finance (Defi), in short, is a way to allow users' to profit off of their own financial assets. Within a centralized financial system like the one that we live in today, we are encouraged to deposit or lend capital to financial institutions who then make money off of loaning that capital to others. Defi privileges peer-to-peer transactions over the monopolistic approach of banks dominating and authorizing money transactions.
The explosion of Defi has allowed many Ethereum traders to profit handsomely. By providing liquidity, token holders lend their tokens to exchanges that allow other users to swap their tokens for other tokens like a traditional exchange but for a small fee that is distributed amongst the liquidity providers as profit.
However for the past several months until now, small-time traders or investors were unable to truly profit from Defi on Ethereum. Many crypto pundits on Twitter voiced their concerns that only the large token holders or "whales" were able to profit from Defi trading.
Why were whales able to benefit from Defi while retail and smaller traders experienced a more difficult time? It was due to the expensive transaction fees on the Ethereum network. To place a liquidity claim, to withdraw, or any of the other actions needed to profit off of Defi on Ethereum, one needs to pay for a transaction fee that become cost prohibitive. Case in point, in many of the transactions the transaction fee was more than the value of tokens being transacted.
To me that sounds ridiculous. Due to the high transaction fees, the whales were the only traders to not be dissuaded from the high cost to transact because their trades were so large that a several hundred dollar transaction fee would be insignificant to them.
Users, investors, developers, and other crypto folks began to voice their displeasure in their inability to interact with Defi on Ethereum:
It seems to me that they are calling out for a solution. And a remedy has emerged!
Bitmond.com recently announced that they would be migrating from Ethereum to EOS to leverage EOS's fast and feeless transactions. Bitmond, according to their website, are digital collectibles that appear as 3D colored diamonds with which a user can interact with.
A major reason for their decision to move to EOS was due to the fact that the "network today is able to manage more transactions every day than the sum of all the other blockchain networks...It now seems clear not only to us how EOS.IO network is becoming one of the next breeding grounds for future projects."
With the increasing costs to transact on the Ethereum network, developers on other blockchains such as EOS have acted to meet their need for faster and cheaper transactions, such as the Callisto Network, Infinite X, and the DAPP Network.
The team behind the Callisto Network is now offering their services to those Ethereum developers who are in need of making their decentralized application (dApp) just work. Every day that their dApp is not generating profit is another day of cash burn or turning off the lights. These blockchain developers are too smart to be one-coin maximalists and should see that there are solutions available that maintain the decentralization of their dApp while leveraging the speed and scale of EOS.
If you would like more options to assist in your migration to EOS, I would also look at Infinite X. The team at Infinite X has put together an informative overview guide while also offering their services.
In addition to the Callisto Network and Infinite X, the DAPP Network is another project that bridges the Ethereum blockchain with the EOS blockchain. The team at LiquidApps has recently created a bridge that envisions developers to leverage the speed, scalability, and feeless transactions of EOS while using the capital liquidity on Ethereum.
Keep an eye on the growth of the DAPP Network because in addition to a blockchain bridge, the DAPP Network also offers other developer services such as cost-effective resources and other tools.
The future of cryptocurrency is a multi-chain world. Transcending the boundaries of one-coin maximalists, EOS and the EOSIO software are poised to offer a way to support the growth of other blockchains and the blockchain industry writ large.
Now, it is growing brighter for EOS during a year that has predominantly seen the token price of EOS languish and EOS FUD increase dramatically.
With EOS lending a hand to Ethereum and supporting its dApps, I hope that crypto pundits, commentators, Youtube influencers, CryptoTwitter thought leaders, and others can see that the antagonism between Ethereum and EOS needs to stop.right.now.
Why? Because team work is the dream work between Ethereum and EOS.
See you all next week for another round of the CoolWave Capital Newsletter.
For More EOS and EOSIO coverage: EOS Nation's Hot Sauce, EOSWriter's EOSIO Week in Review, Crypto Peter's Moran Post, and EOS Go's What Happened This Week on EOSIO.
Disclaimer: KJ Kingsley is not a financial advisor and holds the digital tokens or cryptocurrencies represented in the content above. This content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained in this post constitutes a solicitation, recommendation, endorsement, or offer by myself to buy or sell any securities or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of any of the author’s employers.