DeFi Is Back: Metrics Rocketing and RPC Node Providers Address Traffic Challenges

The rapid upsurge in cryptocurrency segment activity might overheat the market. It could also bring unexpected pressure to Web3 infrastructure. In December 2023, blockchain-as-a-service teams started adjusting their offerings to help dApps meet increased traffic.

DeFis Are Back in Business: TVL Up by 50% in Two Months, Solana, Cardano Lead the Surge

In October-December, 2023, the global ecosystem of decentralized finances (DeFis) impressed traders with a massive comeback. Some critical metrics of the DeFi scene are targeting pre-FTX collapse levels.

To start with, aggregated Total Value Locked (TVL) across all mainstream smart contracts platforms - Ethereum, BNB Chain, Tron, Solana, Cardano, Optimism, Arbitrum, etc. - soared by 50% in less than two months. In mid-October, this metric was attempting to conquer $40 billion. Two months later, it almost reached $60 billion, as per DefiLlama data.

High-performance smart contracts platform Solana (SOL) seems to benefit the most: its TVL increased by a whopping 153% amidst the euphoria around upcoming potential retroactive airdrops on the protocol.

The frenzy was triggered by the airdrop of Lido competitor Jito (JTO) which unexpectedly distributed four-digit bonuses to the participants.

Cardano blockchain registers an 186% TVL upsurge in the corresponding period: depositors locked over $520 million in its dApps which is a record-breaking level for the entire history of Cardano as a programmable blockchain.

The largest DeFi platform, Ethereum, slightly “outperforms” the segment with its 57% upsurge in TVL. Its largest DeFis, Lido, Maker, Aave, and Uniswap, registered a double-digit TVL upsurge in November-December.

Simply put, that can’t be explained by a coincidence or “dead cat bounce”: the bullish market in DeFi is gaining steam. All crypto segment actors - traders, investors, infrastructure providers - should be prepared to get the maximum of opportunities it is set to unlock.

Stress Tests for the RPC Endpoints’ Reliability

Typically, such events are accompanied by infrastructure overload issues. Back in the 2020-2021 bullish market, centralized crypto exchanges - even Tier 1 platforms like Coinbase, Kraken, and Binance - went offline when Bitcoin price surged past crucial levels - $10,000, $15,000, and so on.

Even fully decentralized services struggle with increased traffic. Amidst the 2020 DeFi craze, Ethereum-based apps worked much slower than usual, let alone $10-$50 gas for conversion.

During the ongoing market rebound, Bitcoin transaction confirmation time surged by 70-100%, as per Blockchain.com data.

Remote procedure call (RPC) endpoints, “points of entry” for dApps connected to the blockchain, are under pressure in such periods. In January 2023, amidst the collapse of the cryptocurrency market, all public RPC endpoints by Solana Foundation went offline.

Users were forced to migrate to private RPC node providers, i.e., services that are running RPC nodes (actually, blockchain full nodes) themselves, and connect dApps to them via API.

The point is that the stability and performance of RPC endpoints are of lethal importance for the functionality of DeFis. Periods of market euphoria only amplify this dependency.

Lifting Rate Limit Barriers on Shared Infrastructure: Case of Private RPC Node Provider

Increasing the accessibility limits for decentralized applications using shared infrastructure is one of the ways RPC node providers can help clients handle increased traffic. When it comes to premium service packages, all providers guarantee the best possible rate limit (number of requests can be processed per second), but such options can be rather costly for early-stage dApps.

As such, top-tier RPC node providers are raising rate limits for the tariffs with limited throughput. For instance, GetBlock, one of the most popular and innovative Web3 infrastructure providers in DeFi, increased its rate limit for shared nodes from 60 to 200 requests per second, i.e., by over 230%.

What does this actually mean for dApps? With the “RPS boost”, they can send 230% more requests to blockchains without delay. Say, its infrastructure won’t notice even a 3x increase in traffic acting just like previously and paying the same price per request.

To prevent the endpoints from being attacked by spammers, GetBlock introduces this offering only for paid shared node plans. Users of a free plan with 40,000 requests per 24 hours can upgrade their dashboards.

Also, for maximum safety, GetBlock only increases rate limits for those users who migrated toward API tokens, a new authorization model. New customers receive these tokens automatically while the existing ones are invited to claim them in their accounts.

According to internal research, with this offer activated, GetBlock becomes the most resource-effective provider when it comes to shared nodes with 200 requests per second bandwidth.

Wrapping up, the rate limits increase initiative seems to be a reasonable way to help dApps to kickstart new users on-boarding in Q4, 2023.