“Scalability is what we need today, not tomorrow”
How does your usual day start? What’s the very next thing right after having a cup of coffee — chasing the headlines and tracking the changes in the market? Congratulations, you’ve got a FOMO fever! Decentralized Finance has been hitting milestones like crazy, and there is a massive amount of protocols screaming about better, smoother user experiences. Chasing the most lucrative yields or the most exciting deflationary features has become a new trend, offering multiplied gains — while being followed by the multiplying risks. Are you afraid to enter DeFi because of various issues? There is a solution coming to make it better.
Knowledge makes money
The importance of financial and tech literacy in the modern world is often undervalued. Learning the ropes of what “blockchain” is, what “crypto” is, and what stands behind the tricky food, doge and meme inspired protocols definitions is vital. We already exist in the digital age. The future has come and there is no way back — there is only a way forward. One needs to start absorbing the crypto knowledge regardless of age or area. Otherwise, you might find yourself unable to cope with the rising gap between the outdated crooked financial system and the new alternative blockchain-based decentralized global P2P economy.
For those who managed to miss the hottest news of 2020 and 2021, DeFi stands for Decentralized Finance or a permissionless decentralized version of various traditional financial instruments that includes exchanges, lending, borrowing, synthetic assets, and more. This field experienced tremendous growth and significant change over the past few years.
Start from the initial and most crucial information, research the area and its history from zero to first billion of dollars in market cap and further skyrocketing to new heights. We’re standing on the verge of a major breakthrough.
Pitfalls of progress
Every maturing industry has its share of disadvantages. In the case of DeFi, these cons are unfortunately numerous: lack of reliability among technical solutions and developer teams, insufficient protocol security, limited scalability, high gas fees that kill the global adoption. What stops crypto from enterprise acceptance and could propel token prices to the Moon? Better interfaces for substantial transactions are a must — corporations are simply not convinced that existing ones will do the trick and are safe-to-use at the moment.
The high probability of another super-lucrative opportunity may shake the market greatly once again. Since some of the popular tokens fell into decay, many other protocols appeared. Armed with extensive marketing campaigns, they offer another harvesting opportunity with substantial yields and rumored technological supremacy over the previous generation.
Nothing good can be expected though: the so-called “DeFi stimulus check” airdrops, insane liquidity farming APYs, and tokens with a shorter life span than during the infamous ICO era were accompanied by a heartbreaking wave of exit scams and hacks.
The DeFi progress may seem infinite and inspire new users to enter the field, but it’s limited with certain technological problems. While scalability issues of a single chain may be solved, what’s the point of building a decentralized economy when most of the market players continue to rely on a single layer and wait for another promised scalability upgrade for months? The very essence of a new economy is against that outlook. The new generations of DApps or decentralized applications require multichain solutions to foster innovation.
Scalability is the only way forward
Despite the rapid increase in demand and the fact that protocols evolved rapidly in a short period of time, many projects, token issuers, and liquidity miners face bottlenecks when navigating through the current DeFi landscape. Token issuers face their share of risky challenges when designing smart contracts since they must ensure that there is a proportional distribution of token rewards for liquidity providers. The later party, markets based on different public chains, suffer from the increase in yield farming fees and timeframes to facilitate the transactions as well as rising inconvenience.
Evident from recent events are that alternatives are highly anticipated in the crypto world. For example, PancakeSwap, the leading decentralized exchange on Binance Smart Chain, has taken the lead over ethereum in terms of transactions.
Today’s DeFi market greatly suffers from fragmentation, lack of interoperability, and inefficiency of bad debt liquidation. In turn, new solutions that cater to assets outside of the Ethereum ecosystem have been on the rise.
There is no denial that scalability, security, and user experience are currently the main points to focus on for the developers. When designing Cellframe back in 2017, we already predicted this issue to happen since our underlying technology has an embedded sharding mechanism and implements various out-of-the-box consensus models.
Cellframe provides interoperability by using Cell bridges to public blockchains. It’s possible to connect several blockchains into a single system including integration of public blockchains! The project also features the open-source framework for launching fully customizable and scalable subchains, interoperable by design in the Cellframe ecosystem.
Next, we utilize the Mirror Chain solution for the protection of public and private blockchains from terminal attacks. It doesn’t affect blockchain performance, restores the latest state in the case of attack, and can be used for interoperability features.
Finally, Cellframe Cells can act as a second layer solution for existing public chains e.g. Ethereum or almost any other layer-one platform: it may work as a sidechain for throughput outsourcing.
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