Blockchain platform Qtum has announced a bumper $1M fund to spur third party developers to create defi applications on Quantum Chain. Qtum’s architecture overlaps with Ethereum significantly; both networks use the EVM and Solidity programming language, making it easy for devs to jump ship. Qtum founder Patrick Dai announced the initiative and pledged up to $5 million in total if there is sufficient demand. QTUM is up 8% in the last 24 hours, signaling that the crypto market has caught on to the network’s rallying cry to defi devs and the influx of new users this may bring.
As Ethereum’s network fees have soared and the mempool filled, defi users have been frustrated by their inability to perform microtransactions and to interact with the chain for tasks like sending stablecoins, trading on DEXs, and locking assets into liquidity mining protocols. Other chains, including Qtum, have higher throughput and lower fees but lack Ethereum’s network effects and developer community. To solve this chicken and egg problem, Qtum’s defi fund will bootstrap development while giving Solidity programmers an incentive to migrate.
While Ethereum is due to upgrade its network to ETH 2.0, development progress has been slow. This week, a bug on the ETH 2.0 testnet caused the blockchain to fork into multiple chains, each recording a different network state. The fault has been partially attributed to reliance on centralized cloud servers provided by Google (NASDAQ:GOOGL) and Cloudflare (NYSE:NET).
Qtum Lays Down Its Defi Credentials
In a blog post on August 17, Qtum presented its case for being a more suitable framework for defi development. It lists a number of advantages that Qtum holds over rival chains including compatibility with ETH’s smart contract ecosystem, and Neutron middleware compatibility that enables other programming languages to be used to code smart contracts. WASM, RISC-V, and the x86 virtual machine developed by Qtum can all be utilized on its UTXO-based blockchain.
Qtum can claim to have been hosting defi long before the term was coined; as far back as 2017 the stable cryptocurrency QCash was issued on Quantum Chain. Now, the blockchain’s architects are determined to accelerate the growth of defi on Qtum. The Quantum Chain Foundation will provide development funding for individuals and teams interested in building on Qtum, allocating funds in accordance with the size, nature, and value of the project in question.
Like Ethereum But Different
While Qtum and Ethereum are bonded by the same EVM and smart contract language, there are some key differences between the pair. For one thing, Qtum uses the UTXO model that was popularized by Bitcoin, whereas ETH deploys an account-based system for tracking on-chain addresses. In addition, Qtum is a PoS chain, while Ethereum’s transition to Proof of Stake is still a work in progress. Features unique to Qtum include a Decentralized Governance Protocol (DGP) that enables specific blockchain settings, such as the block size, to be modified by making use of smart contracts.
Defi’s exponential growth has taken even its greatest proponents by surprise. More than $6.3 billion is now locked into defi protocols on Ethereum, and $500M of BTC is represented on ETH. In the last 30 days, network fees on Ethereum have exceeded Bitcoin and are currently outstripping Bitcoin by 4:1. Switching some of that business to faster, more scalable chains will bring relief to defi users frustrated by being priced out of interacting with decentralized finance, while freeing developers to deploy applications that are not constrained by throughput and gas costs. The onus is now on Qtum to show that anything Ethereum can do, it can do better.