Cross-Blockchain Interaction as a New Pillar of DeFi Development

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Cross-Blockchain Interaction as a New Pillar of DeFi Development


The current decentralized finance (DeFi) ecosystem seems to overlap, because it practically offers uniform features. Maybe it's the impact of a very competitive environment. So, what is the role of the cross-blockchain interaction protocol as a new foundation for the development of DeFi in the future?

BY: Cynthia Wu
Founding Partner & Head of Global Business Development Sales Matrixport
 
The current fact is that DeFi's total locked value (TVL) has decreased by US$23 billion since the beginning of the year. TVL is the total value of crypto assets stored in the DeFi protocol or in the DeFi protocol in general. It is the primary benchmark for measuring interest and quality in a particular sector of the crypto industry.

TVL in the end is a measure of achieving a high level of liquidity and scalability, but it is not yet optimal, because the role of cross-blockchain (multichain) interaction in it is not yet full. Like a program on a computer, it must be able to be installed and used on different operating systems, so the DeFi and crypto use cases in it are much larger. So, quality DeFi is high TVL, but it can be used on different blockchains, so it feels more flexible and easier.

Cross Blockchain Solution for Thousands of DeFis on Matrixport

I believe that multichain will play a huge role in increasing the adoption of DeFi and becoming the main motor of a good type of DeFi.

We are also aware of the complexities that DeFi developers face in order for their applications to be compatible with different blockchains, from choosing a consensus algorithm, writing secure smart contracts to choosing the right transaction settlement method.
 
This inconvenience, of course, takes time and costs and effort. At Matrixport we have as a solution, namely Cactus Custody combined with Institutional Metamask. This type of Metamask is different from the usual Metamask which is massively used in browsers. Metamask Institutional is a version tailored for corporates, organizations that desire a higher level of security and privacy.


The combination of Matrixport's Cactus Custody with Institutional Metamask is as a DeFi Connector that allows our clients to securely store their private keys in a qualified custodian and access DeFi on the main Ethereum Virtual Machine (EVM) compatible blockchain in a controlled manner. In essence, this DeFi Connector secures access to thousands of DeFis on a single platform.

Future DeFi Growth

The slick development of cross-blockchain protocols for financial applications is evident, with a 10-fold growth for Layer 1 alone, around US$21.8 billion.

As cross-blockchain interactions become more common, we will enjoy better quality DeFi than today, with a wider and more mainstream innovation scale.

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