Launching a blockchain-based project is a challenging task, and the success of the project depends on selecting the right blockchain network. With so many blockchains available, it's difficult to decide which one is best suited for a DeFi project.
Ethereum is probably the most popular blockchain for launching decentralized finance (DeFi) projects due to its versatility and usability. However, Ethereum's congestion issues can be problematic for large-scale DeFi projects. As expected, there are multiple Ethereum alternatives ranging from platforms such as Cardano, Polkadot and Avalanche to Layer 2 networks such as Matic Network and Polygon.
In this article, we'll look at the different types of blockchain networks and their features to help you make an informed decision when selecting a platform for launching your DeFi project.
Ethereum is the leading smart contract platform, and its EVM (Ethereum Virtual Machine) provides developers with a Turing-complete scripting language that allows users to create custom smart contracts. This makes it the ideal platform for launching DeFi projects, as it offers a wide range of features and capabilities.
Ethereum has a network throughput of about 15 transactions per second (TPS), which can be a problem for large-scale DeFi projects. Ethereum's congestion issues are caused by its low gas limit and high gas price. This limits the number of transactions that can be processed on the network, and the high gas prices make it expensive to use Ethereum for payments.
Ethereum's developers have addressed this problem through the "Merger" that saw Ethereum shift from a Proof of Work to a Proof of Stake network. However, there are still some complaints from users about the slow transaction speed and high gas prices.
Ethereum's scalability issues can be a roadblock for large-scale projects. However, since its the largest and most popular platform, there is still a lot of potential for launching successful DeFi projects on Ethereum.
• Turing-complete scripting language for creating custom smart contracts
• Wide range of features and capabilities
• High network security
• Scalability issues
• High transaction fees
Cardano is an open-source network built on a proof-of-stake consensus algorithm, making it more energy efficient than other blockchains like Ethereum. In addition, the platform is optimized for smart contract development and provides a wide range of features, tools and frameworks that developers can use to create DeFi projects.
Cardano's network throughput is much higher than Ethereum’s at around 250 transactions per second (TPS). This makes it ideal for large-scale DeFi projects as it reduces the risk of network congestion.
However, its transaction fees are still relatively high compared to other blockchains, such as Bitcoin. This can be a problem for projects that require frequent payments, but this issue is slowly being addressed by its developers.
• Optimized platform for smart contract development
• High network throughput (250 TPS)
• Low transaction fees
• Limited scalability
Polkadot is a sharded protocol that allows developers to launch cross-chain applications on different blockchains. This makes it an ideal platform for launching DeFi projects, as it enables specialized transactions and functions across multiple chains. Polkadot's network throughput is also much higher than Ethereum's at around 1000 TPS, which reduces the risk of congestion.
Polkadot comes with a testnet or canary network called Kusama, an excellent option for developers to test their applications before going live on the mainnet.
Polkadot is still in its early stages, and many of its features are yet to be implemented. However, its developers are actively working on improving its features and scalability.
• Cross-chain capabilities for specialized functions
• High network throughput (1000 TPS)
• Low transaction fees
• Testnet (Kusama) for testing applications
• Limited security
Tezos is a blockchain platform designed for smart contract development. It offers developers the tools and capabilities they need to create DeFi projects, such as on-chain governance, staking capabilities and more.
Tezos boasts of a high network throughput at around 40 TPS, which makes it a reliable platform for launching large-scale projects. In addition, Tezos’s blockchain is highly energy efficient thanks to its PoS (proof of stake) consensus protocol.
Tezos also has high network throughput at around 40 TPS, which makes it a reliable platform for launching large-scale projects.
Tezos is more secure than other blockchains as it uses a proof-of-stake consensus algorithm. This makes it less vulnerable to attacks and reduces the risk of data loss.
Pros
• On-chain governance
• Staking capabilities
• High network throughput (40 TPS)
• Secure and energy-efficient network
Cons
• High transaction fees
Launching a project on the blockchain requires planning on the project's security, scalability, sustainability and cost-efficiency. Every blockchain platform has its own unique features and capabilities, so it is essential to choose the right one for your project.
Ethereum is currently the most popular platform for launching DeFi projects. Still, Cardano and Polkadot can be practical alternatives depending on the type of project you are planning to launch. All three platforms offer decent security and scalability; however, we are still far from the ideal blockchain platform that can address all the challenges of launching a successful DeFi project.
Apart from the blockchain platforms mentioned here, projects such as IBM Blockchain, Hyperledger Fabric, Stellar and EOSIO offer open-source blockchains that can be used to launch projects.
