Solana is gaining ground in DeFi, with its market share rising as Ethereum’s falls. Proposed changes to Solana’s inflation could significantly impact its cryptocurrency and DeFi applications. Meanwhile, Ethereum co-founder Vitalik Buterin’s recent proposal seeks to enhance efficiency within the network, addressing criticism over transaction fees and performance. Governance discussions and security issues also emerged within the DeFi community this week.
Solana has gained significant traction, now representing 10% of the total value in decentralised finance (DeFi) as Ethereum’s share has decreased from 70% to 57% since last June. Recent proposals aim to shift the balance further, particularly concerning Solana’s inflationary structure.
A proposal by the venture firm Multicoin Capital suggested reducing inflation by lowering staking incentives, which secures the blockchain and generates new Solana. This action was believed to increase Solana’s price and attract more investment in DeFi protocols. Although the proposal garnered support, it ultimately failed to achieve the necessary supermajority for approval.
Galaxy’s research branch has since revived this discussion. They propose allowing validators to vote on inflation reduction, offering multiple reduction levels. A supermajority vote would result in a weighted reduction based on the validators’ choices. However, critics argue this method could lead to strategic voting, undermining the proposal’s integrity.
In Ethereum’s realm, co-founder Vitalik Buterin introduced a controversial proposal to replace the Ethereum Virtual Machine (EVM) with the RISC-V programming language to enhance execution efficiency, potentially solving critical scaling issues. This proposal underscores tensions within the Ethereum community, as it weighs maintaining high transaction costs for enhanced security versus adopting layer 2 solutions for better efficiency.
Buterin’s suggestion is seen as an attempt to address recent criticisms, confirming Ethereum’s commitment to retaining its position in the DeFi landscape in the face of Solana’s rising influence.
The DeFi community also witnessed significant governance activity this week, including:
– Lido DAO voting to renew delegate incentives
– Aave DAO proposing to extend the Aave Chan Initiative partnership
– Arbitrum DAO contemplating a new DeFi incentives programme.
Additionally, discussions surrounding security are prominent, with many victims of sophisticated phishing attacks sharing their experiences, emphasizing the need for enhanced security measures in the DeFi space.
Community members are encouraged to share insights or tips related to DeFi developments through direct communication.
