Ethereum Engine Refactoring Discussion and New Trends in the DeFi Field

Recently, the Ethereum community and the DeFi ecosystem have seen a series of noteworthy developments. From innovations in underlying technology to the positioning of emerging projects, these trends could have a profound impact on the blockchain industry.

Ethereum Execution Layer Optimization Proposal

The co-founder of Ethereum proposed a long-term execution layer optimization plan, suggesting to replace the existing EVM with RISC-V. This proposal aims to:

1. Improve overall system efficiency
2. To cope with the massive computing demands that may arise in the future
3. Break through the performance bottleneck under the current EVM framework

It is worth noting that this change only involves the underlying execution engine and will not affect Ethereum's account model and contract invocation method. For ordinary users and developers, the way of interacting with smart contracts will remain unchanged.

The core of this proposal lies in addressing the potential difficulties in execution layer validation that may arise over the long term, or the need for special hardware support. RISC-V, as a general-purpose and efficient computing model, has a mature hardware and software ecosystem, making it an ideal alternative. However, this proposal is still in the discussion stage, and actual implementation may take several years.

New Public Chain Project Selection Camp

A certain emerging public chain project announced its choice of the Arbitrum ecosystem, a decision that came as a surprise since several well-known projects have already joined the OP Superchain camp. Although Arbitrum Orbit and OP Superchain are both L2-based scaling solutions, their design philosophies differ:

• Orbit allows developers to create dedicated Rollup or AnyTrust chains that can directly anchor Ethereum as L2, or anchor Arbitrum as L3.
• OP Superchain is committed to building a network composed of multiple parallel L2s, known as OP Chains, which are based on a shared OP Stack standard codebase.

In short, Orbit tends to focus on vertical scaling, while Superchain emphasizes horizontal scaling. In terms of modularity and flexibility, both have different focuses: Orbit emphasizes openness and supports various data availability options; Superchain focuses on consistency with Ethereum and multi-chain standardization.

New Developments in Established DeFi Projects

Liquidity mining situation of a certain DEX

The latest version of a certain DEX's liquidity mining program offers considerable returns, but the difficulty and thresholds for operation have both increased. Currently, the main audience remains experienced miners, and participation from new users is low. This design may hinder further adoption in the DeFi space.

Stablecoins enter mainstream Decentralized Finance protocols

The stablecoin RLUSD launched by a well-known payment company has been accepted by multiple mainstream Decentralized Finance protocols:

• A lending platform has added RLUSD to its V3 version.
• A certain AMM platform has deployed a liquidity pool of 53 million US dollars for RLUSD.

This indicates that stablecoins still have considerable room for growth in the current market environment, and both algorithmic stablecoins and compliant stablecoins can find their respective market positions.

well-established DeFi projects expand to new public chains

A well-known AMM protocol recently launched its V3 version on the Avalanche network and introduced the $AVAX incentive program. Although the rewards are somewhat attractive, the overall scale is limited. These established DeFi projects that have failed to become industry leaders are facing survival pressure and can only hope for a large-scale increase in on-chain activities.

New Trends in the Payment Sector

A well-known stablecoin issuer has launched the CPN network aimed at the global payment market. The network is designed to create a compliant, seamless, and programmable payment framework by integrating financial institutions, supporting fiat currencies, USDC, and other payment stablecoins.

The design goal of the CPN network is to address the infrastructure barriers faced by stablecoins in mainstream payments, including unclear compliance requirements, technical complexity, and the secure storage of digital assets. The primary issue that the project aims to solve is the challenge of cross-border payments, with the hope of improving the inefficiencies and high costs of traditional payment systems.

Competition in the Cross-Chain Communication Field Intensifies

Recent developments in the cross-chain communication field have been frequent:

1. A certain DEX chooses a certain cross-chain communication protocol as the information transmission bridge for its multi-chain expansion plan.
2. A well-known venture capital institution has made a large purchase of a certain cross-chain communication protocol token and has committed to holding it for the long term.
3. Another cross-chain communication project has released its future development plan.

Cross-chain communication, as a necessary track, is becoming increasingly competitive. The competition among various protocols in terms of transaction fees may benefit users, while protocol integrators need to consider stability and security more.

The Integration of DeFi and Traditional Finance

A well-known DeFi protocol's project has deployed $50 million of funds into the non-U.S. Treasury sector for the first time, specifically targeting a platform focused on connecting on-chain and off-chain unsecured lending. This platform mainly caters to qualified investors and institutions, managing the loan pool through a "pool representative" mechanism, responsible for key aspects such as credit assessment, loan term formulation, and default handling.

This trend reflects the gradual integration of DeFi and traditional finance, but it also brings new risk considerations. As the regulatory environment and user awareness change, such hybrid model projects may receive more attention and acceptance.