Impact of Ethereum 2.0 on DeFi ✅💥⬇️
⏯️ DeFi (or “decentralized finance”) is an umbrella term for financial services on public blockchains, primarily Ethereum. With DeFi, you can do most of the things that banks support — earn interest, borrow, lend, buy insurance, trade derivatives, trade assets, and more — but it’s faster and doesn’t require paperwork or a third party. As with crypto generally, DeFi is global, peer-to-peer (meaning directly between two people, not routed through a centralized system), pseudonymous, and open to all.
⏯️ Ethereum 2.0 was a broad term used to cover several improvements to the Ethereum blockchain, which tackled some of its most pressing technical hurdles. However, it was an informal name, and its community doesn't recognize it as a valid name for the blockchain and network—the Ethereum Foundation prefers to refer to the upgraded blockchain as Ethereum, with the consensus layer called ETH 2 and the execution layer called ETH 1.
Impact ⬇️⏯️
This Ethereum upgrade was complex, but the network needed it for several reasons. The Ethereum network was bogged down by technical limitations—namely network congestion, scalability, and accessibility.
The implementation of Ethereum 2.0 incorporates many steps aimed at enhancing the security of the network, a critical aspect for decentralised finance (DeFi) platforms that facilitate transactions involving substantial amounts of value.
#DeFiChallenge #DeFiEthereum2.0
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