CRYPTO

Creating a multichan for defi products is a new requirement


Right now, your DeFi product needs to be multichen to be competitive – this is the hard (and exciting) truth of 2021. Whether you’re building a wallet, a credit service, or a DeFi game, your target audience knows there’s more to crypto space than Ethereum. And they hope you’ll provide the best in the world.

It seems there will always be a debate about which blockchain creates the best foundation for projects. Increased security, lower transaction costs and tremendous speed – there will always be a chain that offers greater benefits. As speculators argue over the next potential “Ethereum killer”, a new multichan reality is emerging that has a less intense competitive effect. Instead of a dog-eating-dog structure, the future of blockchain and DeFi will be in favor of products that a cooperative multichain user mixes with the solution and eventually forgets the ones that remain isolated.

This trend is partly driven by the Polcadot and Kusama ecosystems, which were created with a multichan philosophy in its core. The parachains attached to the relay chain easily communicate with each other, raising the bar for the whole space. Near the corner of the second set of the Parachin slot auction, they continue to set the standard for the multichain industry.

Projects that make it easier for the average user to connect to more systems – such as the Moonbeam Protocol and Phantom Wallet – are raising millions of dollars to make this new multichan reality easier for users. But how do you navigate it as a developer?

We can clearly see that the market is shaped by the demand of the user. Depending on their needs, your users are leaning towards blockchain that serves them better – and the platforms that offer them access. As a result, projects that support multiple chains gain a wider audience and more liquidity. This means that, at a minimum, your DeFi product needs to support Ethereum and a “niche” blockchain – established leaders for trading, stacking, nonfunctional tokens (NFTs) and more. And the more chains you can communicate with, the better.

When you are a developer who is pursuing these multichan goals, there are several obstacles you may face.

Related: How many conspiracies behind Kusama’s parachute auction?

Barriers to multichan construction

High cost: Suppose you want to build a cross-chain bridge; You need to run a large number of nodes for all the chains you want to bridge together. It is expensive and very intensive to maintain. Spinning and running a node in a single blockchain can be costly for a developer. Now imagine you have to connect two, three or ten.

This becomes extremely difficult in terms of hardware, maintenance and access to capital. You need more than luck to succeed in affiliate business.

Security Challenge: In light of recent hacks on bridges, security remains one of the biggest challenges associated with the multichain – there are more opportunities for hackers when you swap assets. If we look at recent polynetwork incidents, we can see that bridges can become extremely risky.

The hackers discovered network vulnerabilities in Poly’s inter-chain messaging and used them with an estimated $ 600 million in user funds. This is an important lesson for new multichan defi solutions for understanding the consequences of security failures.

Level of complexity: Of course, connecting and assembling blockchains will add the layers of complexity and the solutions needed to connect the individual chains. Each chain provides a new set of idiosyncrasies, processes and subtleties that manufacturers need to familiarize themselves with. This means that access to a wider pool of talent will probably be needed for more defense agencies to gain access. The blockchain is constantly evolving, and so will you.

The solution

Despite the obstacles and additional difficulties that represent multichan construction, it is critical to the future success of DeFi products. Web 3.0 cannot have any isolated products because they are not in a vacuum but a new generation of decentralized economy. In this economy, projects need a strong and integrated infrastructure to effectively promote themselves and stimulate new audiences. But how do we get there?

We need to provide developers with easy and affordable access to nodes, APIs, and support for ever-growing blockchain. With more ways to build, DeFi developers can break down entry barriers and start contributing to the next generation of blockchain and financing. The sooner we break down these barriers, the smoother our next steps towards a better user experience and wider adoption.

This article does not cite its references or sources. Each investment and trading move involves risk, and readers should conduct their own research when making a decision.

The opinions, thoughts and opinions expressed herein do not necessarily reflect or reflect the views and opinions of the author alone and with Cointelegraph.

Chandler song Co-founder and CEO of Ankr Network, a San Francisco-based Web 3.0 infrastructure company and winner of the Forbes “Under 30”. He previously worked as an engineer at Amazon Web Services.