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As the broader blockchain sector thrives, the Cardano network remains one of the leading blockchains among developers. However, the blockchain appears to have its limits, and a crypto pundit has declared that a full structural reset might resolve this limitation, making it more efficient.
The Cardano Decentralized Finance (DeFi) ecosystem is facing harsh criticism after a crypto pundit, Fallen Icarus, called out the leading blockchain for its core problems. His statement, which was mainly targeting the network’s discrepancy, was shared by Andrew Throuvalas, the co-founder of Charmsdevs.
According to Icarus, Cardano’s current DeFi landscape needs to be rebuilt from the ground up. Revered for his updated model of P2P DeFi, Icarus contends that Cardano DeFi made a mistake by attempting to imitate Ethereum’s “all-in-one” dApp concept, which incorporates all practical capabilities. These include high throughput, liquidity, instantaneous settlement, best price enforcement, and censorship resistance.
As a result of this approach, Andrew Throuvalas believes that the blockchain is facing several core problems, such as excessive cost and poor scaling, but it does not work in practice. Furthermore, he highlighted that the solution focuses on layered scaling, which satisfies more niches.
This is because the approach offers optionality of tradeoffs to users without ultimately sacrificing anything. An example of this is leaving sluggish but censorship-resistant ultimate settlement to a Cardano Layer 1 smart contract. Another is leaving high-throughput use cases to a less censorship-resistant but faster Layer 2 application, such as DeltaDeFi, the first Hydra DEX.
Throuvalas noted that this model is already operating successfully in Traditional Finance (TradFi). Typically, when a trade is executed, the DTCC, a Layer 1 for TradFi orderbooks, simply updates account balances. Meanwhile, the layer 2s provide every other thing that makes markets generate liquidity, and brokers like Fidelity offer swift trading.
Interestingly, Throuvalas claims that this is the model that Bitcoiners have been focusing on, and no user is attempting to scale on layer 1 or change the Layer 1. Rather, L2s are handling high-throughput applications like lightning, which the Tier 1 CEXs have ultimately embraced despite all of its challenges. Presently, this solution is being actively used for token trades and Bitcoin transfers.
In this model, layer 1 is not required to tackle every problem at once. Both Bitcoin and Cardano were designed as ultra-secure and decentralized base layers, regarded as the pinnacles of Proof of Work and Proof of Stake security. “Leave room for growth to the L2 solutions. It’s a long road, but the only one that makes sense,” Throuvalas added.
