The DeFi era is here. This sector of the cryptocurrency industry is garnering huge investments from all parts of the financial market while existing in an ever-evolving ecosystem. This has unquestionably affected some networks struggling to keep up with the pace of development, while others see it as a capitalist opportunity at stake.
Cardano, for example, launched smart contract functionality earlier this year to prepare the network to host DeFi applications. While its native ADA token saw unprecedented demand and growth in the days leading up to the Alonzo hard fork, its price action has been uneventful since then save for a loss of more than 50%.
Your network activity, however, has seen a big increase recently, and most of it may be attributed to its emergence as a viable DeFi contender.
But what makes Cardano a suitable option for developers to build on? Well, from the horse’s own mouth, it is due to “his vision for the future.” In a recent interview, Cardano founder Charles Hoskinson pointed out that while the open cryptocurrency movements started out as open source and decentralized, most networks want to block users on their protocols and tokens, “which is crazy”.
Instead, he says, cross-chain is the way to go for DeFi, where networks would be open to interacting with each other. He added,
“Future winners in the DeFi space are going to have liquidity and interoperability, the ability to move across multiple chains.”
He also praised networks like Chainlink that are not putting “all their eggs in one basket like Ethereum,” but are instead working towards this goal. Chain link recently launched its Inter-Chain Interoperability Protocol (CCIP), which it has dubbed a “new global standard for decentralized messaging, data, and token movements between blockchains.”
The network also recently exceeded $ 75 million in total insured value: a sign of the growing importance of multi-chain protocols.
The Cardano and Ethereum networks have also been connected through a recently launched cross-chain that allows users to migrate their NFTs between the two.
According to the executive, in the next few years, Layer 2 protocols will witness all the action, as most of the interaction will take place there, while L-1s will be used as “an evidence verifier and an agreement of last resort ”. He added,
“We saw that future and we designed the extended UTXO model, Hydra, our sidechain model, and all these other things to accommodate that future and if the dApps are going to live there, I think they could live there very comfortably.”
On the subject of dApps, Hoskinson also noted that a consistent way to cure dApps is of prime importance at this time. Here, users can ideally check and verify the apps, as in the case of the Google or Apple app stores.
“You have to make dApps detection really easy, then you can get a massive market, you can get millions to billions of users very quickly in the developed world.”
Apart from Cardano, protocols like DappRadar are also working towards a single point solution for navigating dApps.
This is a machine translation of our English version.