DeFi Is Broken, It’s Time For Change
It shows a lot of promise but now a few years into the decentralized finance experiment, the sector also has some glaring problems to address before regular people are willing to forget about centralized financial services entirely. Yet, there's still plenty of hope.
Radix is among those claiming that "DeFi is broken" in its current form and offers a solution. The asset-oriented smart contract platform claims "infinite scalability" and will directly address many of the pain points blocking DeFi from getting to its first one billion users and beyond.
What's up with DeFi?
For all its promise of providing an alternative to traditional financial services, decentralized finance is still not quite there. Among the issues pressing the sector is scalability — current blockchain implementations just can't handle the number of transactions the traditional financial industry demands. This has resulted in compromises to one of DeFi's core strengths, composability.
Ethereum's scaling roadmap focuses on transactions occurring away from the main blockchain on rollups. Further down the line developers hope to accommodate more users with sharding. The problem with both of these solutions is they negate the "money Lego" qualities of programmable smart contracts. Cross-shard or cross-rollup interoperability is a serious concern.
Other networks compromise on decentralization to achieve greater scalability. However, events like Binance recently halting the BNB Chain amid a security compromise show that this isn't a viable solution.
Developer availability is also an issue and that isn't helped by the steep learning curve ahead of those aspiring to build innovative DeFi applications. Ethereum, DeFi's main hub, uses the programming language Solidity, and many traditional developers struggle to learn it. This often results in the overuse of copied code, stifling innovation. Other times, it results in unsafe code, introducing potential exploits.
The Radix solution
Radix has been building an alternative that is ready to onboard the $400 trillion traditional financial system for the last nine years. Originally known as e-Munie, the network has implemented a novel consensus mechanism called Cerberus that enables unlimited parallel transaction processing — essentially, the DeFi-optimized Layer-1 blockchain is infinitely scalable.
By processing transactions in parallel, Radix does not suffer the same bottlenecks Ethereum does when demand for block space is high. Because transaction fees remain low, Radix is better positioned than most of today's smart contract networks to provide financial services to those typically excluded from mainstream finance.
Additionally, transactions remain on the base layer, meaning applications deployed are always interoperable. Despite the sharding implementation that enables parallel execution, the team behind Radix has managed to ensure that Cerberus can perform cross-shard transactions entirely atomically.
On December 8th, Radix the only smart contract platform that has been designed specifically with decentralized finance in mind, is starting the movement for those who know DeFi deserves better.
The network is currently gearing up for its next upgrade, Babylon, the update will bring Scrypto, the network's native programming language, to the public Radix network and unleash the power of RadFi. Babylon is expected in Q2 2023 and follows the December 2021 Alexandria release.
Scrypto looks set to revolutionize DeFi because it is built around the concept of on-chain assets. This makes the language more logical when getting started, ultimately leading to a swallower learning curve and fewer eventual smart contract application exploits.
Such a fresh approach may serve to breathe new life into the DeFi sector. Despite enjoying a massive surge in adoption over 2020 and 2021, most metrics show dwindling DeFi usage throughout 2022.
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