DeFi Needs To Radically Change, And This Project Could Lead The Way

Web3 has grown massively since the creation of Bitcoin (BTC) in 2009, and despite its volatile market activity, many suggest that Bitcoin opened the gates to a new financial future.

Since then, the spectrum has broadened greatly – notably with the launch of Ethereum in 2015. Among the most unexpected developments on the general-purpose smart contract platform was the emergence of the Decentralized Finance industry.

What Is DeFi And How Does It Work?

DeFi (decentralized finance) was one of the fastest-growing segments of the crypto industry over 2020 and 2021. Powered by the same public distributed ledgers used by cryptocurrencies, the underlying tech behind DeFi allows it to operate without a centralized intermediary such as a bank.

In its early infancy, the total value locked (TVL) in all DeFi protocols rose from $601 million in January 2020 to about $20 billion by the same time the next year. 2021 saw its TVL rise exponentially to $256 billion by year-end.

The term DeFi is broadly used to describe financial products and services within this decentralized system, such as trading, borrowing, and lending, that are delivered autonomously.

DeFi has since grown to become one of the most important sectors of the crypto economy; and just as crypto itself disrupted the concept of currencies, decentralized finance is poised to disrupt finance itself from its traditional ways of operating through banks, other financial institutions, and stock markets. Slowed by Complexity And Beset By Hacks, DeFi Is In Need Of A Paradigm Shift

The DeFi ecosystem has hundreds of decentralized applications and smart contracts, developed on programmable blockchains such as Ethereum. Apart from being transparent and efficient, one of the greatest potential superpowers of DeFi is atomic composability, meaning that products and services can easily be connected to interact with each other to build more advanced and complex financial offerings.

In recent years, DeFi protocols have been subject to multiple hacks, where vulnerabilities and complexities of smart contracts or other aspects of the DeFi service have been exploited by hackers for financial gain. In 2021, cyber attacks launched on DeFi caused $1.8 billion in losses , and as of the half year 2022, DeFi attacks accounted for a whopping 79% of the $2 billion lost in crypto attacks overall.

Smart contracts conceptualized on Ethereum, as well as other platforms, have mostly focused on improving scalability with some success, but have failed to deliver what developers need to take DeFi mainstream and generate true mass adoption. Radix To The Rescue?

This is where Radix comes in. Radix is a purpose-built decentralized smart contract platform made for DeFi, that aims to support the $400 trillion financial system through its innovative and transformative distributed ledger technology.

Radix has developed a solution to effectively address the vulnerabilities in DeFi, with its core developers having worked on the project for nine years – assessing and improving concepts to resolve the current issues faced by DeFi.

The minds and community behind Radix believe the tools that exist in the space today are inadequate, and it could take developers years to become competent enough to develop applications using these tools and validate & test them to build a genuinely secure, scalable & usable DeFi ecosystem.

On December 8, Radix will unveil how DeFi will become mainstream at RadFi 2022, a free virtual event. Head here to learn more & sign up to the event .

With billions of dollars worth of hacks still occurring annually in the crypto space, the team behind Radix believes that innovative new tools are needed for DeFi to deliver its promise of a radically better financial system.

They suggest there are four things absolutely required of the DeFi development paradigm before a future world of global-scale DeFi is possible. At the core, t h e way developers build smart contracts needs to be easy, safe, reusable, and composable.

Composability is the ability of financial products and services being offered through dApps (decentralized apps) to combine freely and instantly.

One of the issues currently being faced by developers, while building dApps on other platforms, is that – as more and more dApps are composed together, it becomes increasingly difficult for them to create applications that are secure.The team behind Radix believes the development has the answer to the issues currently faced by DeFi, and says that smart contracts and how they execute need to be thought through from scratch to be able to support the needs of DeFi.Which leads us to the Radix […]

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