Crypto exchange OKCoin confirms in a new report that the scaling of Ethereum (ETH) has seen an increase recently, while the total value stuck in Decentralized Finance (DeFi) has fallen.

DeFi Pulse data shows there is currently just under $ 35 billion in stranded value Challenge smart contract platforms, after well surpassing the $ 40 billion mark earlier this year.

As noted in OKCoinDeFi Update – Last week, digital assets based on the DeFi protocol were hit hard, while an Ethereum scaling solution received notable investment from venture capital firm Andreessen Horowitz or a16z.

As confirmed by OKCoin, the crypto market started to correct itself over the past week after “accelerating rapidly” over the past few months. As reported by the exchange, the price of Bitcoin has fallen well below the $ 50,000 mark (trading below $ 45,000 at the time of writing but fluctuating wildly). These price movements forced a “sharp drop in the price of ether and the rest of the altcoin market,” OKCoin wrote in its detailed market report.

Even though the cryptocurrency market-wide correction had a significant impact on the ecosystem, the DeFi space saw some “positive fundamentals” events last week. For example, scaling has taken a “big step” forward, with some Layer 2 scaling solutions on Ethereum “gaining ground,” the report notes.

DeFi protocols saw record monthly revenue, with more than $ 170 million, and the Uniswap non-custodial exchange managed to generate 43.6% of that total revenue, the report revealed.

Well-known or widely used DeFi tokens underperformed Bitcoin (BTC), the flagship cryptocurrency, last week. Ethereum-compatible governance tokens for DeFi protocols, like Compound (COMP), fell more than 20%, while the price of Bitcoin fell as much as 14% on the week, the report notes. He also mentioned that the Total Locked-In or TVL value in all DeFi protocols (in US $ value) saw a dramatic drop last week, dropping nearly 20%. TVL in DeFi sits just under $ 35 billion.

As declared in the report:

“The overall correction in the crypto market this week triggered an increase in liquidation volume in DeFi lending protocols. According to DeBank, more than $ 117 million in on-chain loans taken out through DeFi platforms like Compound and Maker were liquidated on February 22. This is the biggest DeFi liquidation day on record for the cryptocurrency market.

Although DeFi is an “over-collateralized” concept, traders or investors are liquidated when the value of the collateral they have provided falls below a certain set ratio, resulting in a smart contract or liquidators to “liquidate his loan by force”. OKCoin explained.

They also mentioned that DeFi users typically deposit Ether or Wrapped Bitcoin (WBTC) into platforms like Compound and then borrow stablecoins which can be deposited in order to generate a return (a process commonly referred to as yield agriculture).

While this strategy may seem safe when the market moves higher, traders are actually exposed to liquidating their collateral whenever the market begins to fall, the OKCoin team noted.

They also mentioned that an important discussion that took place recently concerned the Ethereum Improvement Proposal 1559 (EIP-1559). As confirmed by OKCoin, the proposal was first created almost two years ago. It revolves around the now “infamous subject” of Ethereum network fees (or gas fees).

EIP-1559 is a proposal co-authored by Ethereum co-founder Vitalik Buterin. The proposal aims to implement a base fee for each ETH transaction on the current blockchain network (Ethereum will soon be updated to Ethereum 2.0, with a completely different system). As stated in the proposal, the base fee would be ‘burnt’ and ETH miners would get a separate ‘inclusion fee’.

Paradigm’s Georgios Konstantopoulos and crypto researcher Hasu noted that around 20-35% of miners’ earnings could be “burned” if and when this particular proposal is approved and implemented.

Although EIP-1559 has received a lot of support within the Ethereum community – as some claim it could raise the price of ETH while making the Ethereum network much cheaper to use – it has also seen some ” pushback of some community members, ”OKCoin confirmed.

Flexpool, a relatively smaller ETH mining pool operator, noted that it was not too keen to approve EIP-1559.

The Ethereum mining pool said:

“At Flexpool, we believe it is not fair to support an initiative that offers to pay our miners significantly less for the same work. No money is saved on transactions; instead, it is paid for and then destroyed. Our miners do not support EIP-1559 and are therefore also against it.

While some may not like it, overall support for EIP-1559 a “has gathered pace recently after a number of public and private discussions on the subject of increasing Ethereum gas fees and the cost of gas. network congestion, ”revealed OKCoin.

F2Pool, which is one of ETH’s main mining pool operators, has now confirmed its support for the proposal:

The operator noted:

“After the DAO hard fork, key developers and major contributors have consistently relied on current Ethereum, helping it thrive and reach its current state. […] Today, the general community as well as major developers are siding with evolving Ethereum to include EIP-1559. It is important to side with the users and the main contributors.

These developments resulted in an attempt or effort to include EIP-1559 in an upcoming update to the Ethereum network.

Tim beiko, Product Developer at ConsenSys who has been involved in various discussions related to EIP-1559, suggested that EIP-1559 should be added or incorporated into the planned “London upgrade”.

Beiko noted:

“After a year and a half of active development, I think the EIP-1559 is finally ready to be included in a network upgrade and would like to propose that it be included in the next London upgrade. While there is still some work to be done in the client’s implementation, I believe there are no “major issues” outstanding on the EIP and they are ready to go through the process. normal network upgrade test. “