![](https://i0.wp.com/markmeets.com/wp-content/uploads/2022/04/Defi-feature.jpg?resize=800%2C475&ssl=1)
The technology requirement with a lot of attention is scalability. It is the next step to be taken by Defi towards mainstream adoption. The approach to the development of smart contracts is an equally essential sector of layer one platform which is often overlooked.
The heartbeat of any decentralized application’s ecosystem is its new cryptocurrency. Take, for instance, Ethereum (ETH), its solidarity programming language, and Ethereum Virtual Machine (EVM) is Ethereum’s “Nakamoto” consensus. However, decentralized finance (DeFi) has been taken by developers of smart contracts from a form of concept to actual reality.
While EVM and Solidity are the core technologies that made Ethereum become a pioneer of Defi unquestionably, mistakes are also made by the pioneers. Have you ever thought of the reason why there seems to be an unending series of Defi exploits and hacks today? It is due to the fact of the approach of programming that makes it very difficult to securely manage tokens. Because Defi wasn’t in existence during the development of Ethereum.
However, it is not easy to fix this. It is not possible to make major changes to the EVM and Solidity because the majority of the existing DApps will break. Therefore, newer platforms have the opportunity to learn and improve the experience of developers. This is because the next wave of the adoption of Defi could be enabled by the improved DApps built by those developers.
Why Defi development is hard on Ethereum
Even if it’s a token for decentralized lending and borrowing, tokens for an art piece or NFT game, or a financial derivative token, they virtually support every use case of cryptocurrencies and Defi.
However, ETH is the only token that the Ethereum platform natively understands. All other tokens exist as variables within each smart contract whether it is ERC-20, 1155, 721, or any other form.
USDT- Tether token is a list of associated balances and accounts inside it’s a smart contract. The same thing goes for every token created on Ethereum including Shiba Inu (SHIB). This is the reason ETH can’t be swapped on Uniswap (UNI). So what to do is to oddly swap wrapped ETH (wETH), an ERC-20 token that is ETH-backed and held in custody.
It creates a problem as tokens cannot be sent from one person to another as they don’t live in the wallet of users. They only live as a balance connected to count within the contract of each individual.
In exchanging USDT for SHIB, a message is sent informing you of a debit in your USDT contract account and your account is credited in your SHIB contract. USDT must only be transferred within the USDT contract, the same thing goes for SHIB.
Developers spend a huge amount of time on validation and testing which is due to the burden of new tokens being introduced into every smart contract and securing their contracts by all means. This hardly leaves them with time to create what they desire: Defi functionality.
These experiences can be frustrating. Can there be a better way?
Tokens as the basis for the development of Defi
What Defi is all about is tokens. This implies that tokens should be secondary in the process of development. They should be at the core front and center of the platform.
This is the reason alright a programming language can accelerate the development of not only a platform but an industry as a whole. The foundation, a layer one protocol is a good example of how it is done. It makes use of assets-oriented programming and the programming language of crypto is represented by it.
How does this work? At first, as in the list of balances and accounts outlined above, tokens are not established within the smart contract any longer. Instead, they live on a different level, following rules imposed by the platform. Just as it is ensured by the BTC platform that it cannot be drained, double-spent, or misplaced in a transaction. The same logical kind of behavior goes for tokens created on asset-oriented programming platforms.
Abiding with those rules, the expected properties of a physical coin in your hand or pocket are gained by these tokens. It can be physically given out, but the platform ensures that the token cannot disappear, neither can it be found in two places at the same time. Given this behavior of physicality, DeFi apps can be built by developers just like they would instinctively sketch them on a whiteboard.
Author Profile
Latest entries
Social MediaTuesday, 3 September 2024, 16:205 Tips and Tricks To Get More Views on TikTok Video
FinanceMonday, 2 September 2024, 13:35Does refinancing a car affect your credit?
BusinessSunday, 1 September 2024, 10:30Empowering Businesses with Cutting-Edge Software Solutions
TechFriday, 30 August 2024, 11:25How to Improve USB Mic Sound Quality on a Laptop
You must be logged in to post a comment.