Sam Bankman-Fried believes even ETH 2 cannot handle DeFi’s growth potential

Sam Bankman-Fried, cofounder and CEO of FTX Exchange, believes that Ethereum cannot handle the growth of decentralized finance.

Speaking with Camila Russo from Rebel podcast, Bankman-Fried said the Ethereum blockchain is limiting the development of DeFi and the only way around it is to build on other networks.

“At one point, it’s just clear we weren’t going around that. Either we’re going to build it on Ethereum or we’re going to build something we thought would be really exciting, but not both. “

He said that whenever his team tried to build something new that they were excited about, “it immediately outpaced the Ethereum blockchain throughput by orders of magnitude.”

Bankman-Fried claims to have tested more than 30 blockchains, including Ethereum, before deciding to build its DeFi Serum project on the Solana blockchain due to its speed and infrastructure.

Bankman-Fried believes DeFi could one day be used by 1 billion people, meaning blockchains will have to significantly expand their scalability capabilities to support a 10-digit user base. Even downsizing enhancements in Ethereum 2.0 won’t provide enough capacity for what Bankman-Fried has in mind:

“Not only 100 times faster than Ethereum, we need, like, a million times faster than Ethereum.”

During the DeFi boom of the past few months, the growing popularity of Ethereum-based DeFi protocols has heavily congested the Ethereum network, raising rates to over $ 15. When fully operational, Ethereum 2.0 could increase by a factor of 100 to 1000.

Solana CEO and founder Anatoly Yakovenko – who was also on the podcast – echoed Bankman-Fried’s thoughts, stating that the current version of Ethereum is so poorly designed that the hardware requirements for its network of 15 transactions per second, they are not much lower than those needed by Solana, who is currently processing 500 to 600 TPS.

However, not everyone is writing Ethereum. DappRadar communications director Jon Jordan told Cointelegraph in June that he believes Ethereum 2.0 will bring great benefits to DeFi. He believes that the introduction of sharding chains and a proof-of-stake consensus model will solve some of the most fundamental problems of decentralized applications, greatly increasing the speed and throughput of transactions.