How Tomochain Will Change the Status of DeFi, the Challenge of TomoFinance

Agencies
·2-min read

The DeFi market continues to grow from June~August 2020, commonly known as the "Summer of DeFi", to the launch of ETH 2.0. On the other hand, since many projects are built on the Ethereum blockchain, scalability (speed of transfer) and increasing transaction fees are challenges. TomoFinance is trying to solve the above issues in the DeFi market, which is expected to continue growing.

Also Read | Maker of Your Favourite Memes: Ashish Singh

DeFi Today and the Pioneer "MakerDAO

DeFi stands for Decentralized Finance. It is a financial ecosystem that utilizes blockchain technology and is characterized by the fact that there is no central administrator and anyone can access it. DeFi market has been expanding rapidly since the summer of 2020, and MakerDAO is playing an important role in it.

MakerDAO is the protocol behind the stable coin DAI, which is tuned to be worth roughly the same as one U.S. dollar. According to DeFi Pulse, the market capitalization of ETH locked in MakerDAO is approximately 300 billion yen (February 15, 2021), which is equivalent to about 17% of all locked ETH.

Also Read | HOPR Hosts Global Token Launch Event on February 24th After First-of-Its-Kind DAO Experiment

With more and more projects utilizing DAI, it is expected that there will be more transactions and derivatives dealing with DAI in the DeFi market.

Will Tomo. Finance be the pioneer of Tomochain DeFi?

MakerDAO plays an important role in the DeFi market, but because it uses the Ethereum blockchain, it has high fees and scalability issues.

TomoFinance is a platform for issuing TAI, a decentralized stable coin, on Tomochain.

TomoChain is highly compatible with EVM and can be managed under the same address as Ethereum. Transaction fees are 1/18000 of ETH and transaction speed is 80 times faster than ETH.

Users can borrow and operate the stable coin TAI by locking TOMO as collateral, and TAI will be used as a "decentralized" stable coin like DAI, mainly in the Tomochain ecosystem.

The launch is scheduled for Q1 2021, and more information will be available on the website and in the community.