This week Yves La Rose, CEO of EOS Nation, joined Corey and Jimmy D on the EOSIO Weekly podcast to talk about various EOS topics such as the PowerUp resource model, DeFi and flash loans, ProFi, and even IBC. Let’s take a closer look at each of these topics.
EOS Nation is currently actively testing the PowerUp model by building tools that allow users to tweak the parameters that will be in place for the deployment phase. Mainstream EOS users are not expected to be impacted by this coming change. Recourse providers, such as wallet developers and block explorers, are following the changes more closely as theywill be better able to fine tune their rental costs as the proposed rental period will go from 30 days (REX) to 1 day (PowerUp).
DeFi, flash loans and SX Vault
One of the advantages of building on EOS is the base layer permission set that enables users and applications to easily deploy multi-signature security to their account, which can be very complicated on other blockchains such as Bitcoin or Ethereum. On EOS, these easily implementable security features allow DeFi projects to significantly reduce the security risk.
One of the most popular DeFi projects on EOS, Newdex, recently made a huge shift as a DEX aggregator. The platform will now give access to a deeper pool of liquidity, allowing users to trade across multiple decentralized exchanges and liquidity pools available on EOS.
Flash loans on EOS are even more spectacular. Transactions on EOS follow the first-in first-out approach (FIFO) and block producers cannot reorganize or reorder the transaction flow, which is significantly different than on Ethereum where users need to to pay more gas fees for faster execution and where the miner can still choose which transaction to process, allowing for miners to arbitrage against users on the network (known as “Miner Extractable Value”).
Flash loans on EOS are a source of liquidity that can be accessed by arbitrageurs on the network. Combining the flash loans with a trading strategy could be compared to a sniper that is constantly looking for profitable on-chain opportunities. If such a profitable situation arises, the arbitrageur borrows funds from the flash loan and executes the transaction without having to waste any on-chain resources when a potential arbitrage transaction is not profitable.
Regulated and programmable finance, also known as “ProFi,” will give EOS users even more financial freedom and options. It’s important to note that we don’t think that ProFi will replace DeFi. DeFi has a clear use-case for the segment of the crypto population that wants to retain custody of their assets without having to go through the KYC process. ProFi is a solution that will bridge the gap for the growing segment of the crypto population that does require a regulated approach for their investment needs and strategies. ProFi will leverage the EOS protocol to build a rail for institutional funds and the traditional world legacy systems.
No rush for parallel processing on EOS
While enabling multi-core processing or IBC would certainly bring some positive reactions from the community, the actual increase in technical performance is not currently needed. The EOS Mainnet already handles as many transactions as the network wants to throw at it and, for the last 3 years, Block.one and block producers have been optimizing for single-core performance. When the time comes, and single core performance is fully-optimized, EOS will be able to transition to further multi-core processing capabilities.