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It is more urgent for DEFI to make assets cross-chain.How to realize the harmony of assets on the chain?



Since the birth of Bitcoin in 2009, while the value of Bitcoin has been gradually discovered and confirmed, hundreds of altcoins have also been developed, each with its own advantages and characteristics. Although the supremacy of Bitcoin remains intact, there are not many applications based on Bitcoin because of the difficulty of development and the many restrictions. With the improvement of DEFI infrastructure and the expansion of applications, the interoperability requirements of assets on the chain are getting higher and higher, and the value of "cross-chain" technology is gradually highlighted. This article will analyze in depth what cross-chain is from various aspects? Mainly through what technology to achieve? Why do DEFI applications have more urgent requirements for cross-chain technology? How does cross-chain ensure asset security? MDEX settled in BSC, cross-chain assets become "sweet pastry" again? Last week, there was a big news for DEFI. The king of DEX on Huobi Chain Heco —— MDEX "settle down" on BSC. It took only 12 hours to achieve a TVL of 2 billion US dollars. In addition to establishing a home on BSC, MDEX officials also stated that they will deploy on more public chains, and plan to gradually land on public chains including Ethereum layer2, OKExChain, Polkadot, and Near in the second quarter of this year, and realize multi-chain asset interoperability. With the popularity of the BSC public chain, more and more DEFI projects based on other chains such as Ethereum have been transferred to BSC to achieve dual-chain or multi-chain interoperability. As early as 2013, it was mentioned in the BitShares white paper that "it is possible to conduct transactions between BitShares chains, increase the scalability of the network, and trade BitBTC and real Bitcoin without intermediary agents or trust. It can be automatically executed by software." In September 2016, Vitalik Buterin also elaborated on the technical path and application value of cross-chain in his report "Chain Interoperability" for R3. "The recognized cross-chain technology is divided into notary mechanisms, There are three types of side chain/relay and hash lock. The application value is reflected in: asset cross-chain, atomic swap, cross-chain oracle, generalized cross-chain contract. Ethereum expansion solution Polygon integrates DeFi game platform Team3D (VIDYA): According to According to official news, the Ethereum expansion solution Polygon has integrated the DeFi game platform Team3D (VIDYA). It is reported that Team3D (VIDYA) provides hosting solutions for multiplayer player-to-player games, betting and e-sports betting. [2021/6/2 23: 04:49] However, due to the lack of blockchain applications and the infrastructure of the blockchain is still in its infancy, asset cross-chain was more like a concept when it was proposed. After 2020, with the market application scale such as DEFI rising exponentially, How to make Bitcoin equipped with complex smart contracts and introduce its value to other public chains? How to link ecologically mismatched applications on large public chains such as Ethereum, HECO, BSC, and Polkadot? How to minimize user participation in DEFI It has become a very urgent issue, and asset cross-chain technology has once again become a "sweet pastry". What is asset cross-chain? There are many public chains on the market now, and the familiar ones are Ethereum, EOS, Cardano, NEO, QTUM, BYTOM, Aeternity, each public chain is essentially an independent account book, and the value stored by a user on one chain is difficult to achieve circulation on another chain. And cross-chain can make The value crosses the barriers of chains and chains, solves the problem of completing bookkeeping between different distributed ledgers, breaks the "island of value", and realizes the circulation, storage, and transfer of assets on different chains. For example, Bitcoin can also be stored in Ethereum The assets on the Ethereum network can be circulated on the BSC chain. The cross-chain does not change the total value of each blockchain, but only an exchange between different holders. The DeFi lending agreement Liquity The lock-up volume (TVL) reached 2.5 billion US dollars: On April 19, according to OKLink data, the DeFi lending agreement Liquity's lock-up volume (TVL) reached 2.5 billion US dollars. Note: Liquity is a benchmark MakerDAO can achieve A zero-interest decentralized lending agreement, using ETH as collateral to lend the stable currency LUSD, the minimum mortgage rate is 110%. The system does not charge loan interest, but needs to charge the issuance Fees and Redemption Fee (one-time fee). [2021/4/19 20:35:02] The method of realizing cross-chain assets 1) The side chain needs a contract to realize the network data acquisition of the main chain, including the method of switching mechanism between side chain data and main chain data, if necessary To generate 1BTC on the side chain, you need to lock 1BTC on the main chain. Conversely, if you need to cross 1BTC, the contract will first destroy the BTC on the side chain. The Element Chain launched by BTC Relay, Rootstock and BlockStream, and Vapor of Bytom Chain are relatively well-known side chains. If Bitcoin and Ethereum on the main chain are transferred to the side chain of Bytom, the assets on the main chain will be locked and destroyed. 2) Notary Mechanism The notary mechanism is a simple cross-chain mechanism that is widely used in digital currency exchanges and is essentially an intermediary method. Assuming that blockchains A and B themselves cannot directly interoperate, they can introduce a mutually trusted third party as an intermediary, and this mutually trusted intermediary will verify and forward cross-chain messages. EarnDeFi announced the sponsorship of Heco's first hackathon, and the current bonus pool is 72,000 US dollars: On March 26, EarnDeFi, a one-stop DeFi protocol on the Heco chain, announced that it would provide financial sponsorship for Heco's first hackathon, and jointly fund developers with Heco Innovative ideas and early high-quality projects, the current developer bonus pool totals 72,000 US dollars. It is understood that on March 16, Heco announced the launch of the first hackathon on HackerLink, with an initial prize pool of US$60,000. Since its launch, Heco’s first hackathon has attracted more than 50 project registrations, received 11,790 votes from the global community, and the community has donated a total of 1308.055 HT. Currently, global developers can still register for Heco’s first hackathon. Click on the link to view details. [2021/3/26 19:21:00] The notary mechanism mainly includes three types: single-signature notary, multi-signature notary, and distributed signature notary. The single-signature notary method is also called the centralized notary mechanism, which is usually acted by a single designated independent node or organization, which simultaneously undertakes the tasks of data collection, transaction confirmation, and verification. We usually conduct digital currency transactions through exchanges, which is often a centralized notary mechanism. In the multi-signature notary method, cross-chain transactions can only be completed after multiple notaries sign on their respective ledgers to reach a consensus. Each node of the multi-signature notary has its own key, and only when a certain number or proportion of notary signatures is reached, the cross-chain transaction can be confirmed. For example, the cross-chain of Bytom adopts the federated node signature method. The DeFi project SpaceSwap was officially released today: According to official news, on September 10, the DeFi project SpaceSwap was officially released. The way to make money in the fund pool. Among them, MilkyWay token reward (MILK) and MilkShake (SHAKE) are two reward mechanisms, which can further protect the interests of users. SpaceSwap realizes low-cost conversion, represents liquidity mining services through the aggregation and distribution of third-party liquidity pools, provides cryptocurrency liquidity participants with a high-yield liquidity mining protocol, and through an all-in-one SpaceSwap platform Aggregates all major DeFi protocols. [2020/9/10] The distributed signature notary method means that the notary is an alliance composed of a group of people/institutions, and the transfer of cross-chain funds is controlled by this alliance. Compared with the single-signature mode, this method is more secure, and the normal operation of the system will not be affected if a few notaries are attacked or do evil. For example, DeCus, a decentralized cross-chain protocol that will be launched soon, adopts a "repeated grouping" Keeper method to ensure the decentralization of the entire process of cross-chain verification. In this way, a Bitcoin-anchored currency, eBTC, can be created to participate in the DEFI ecological mining of the Ethereum network or other networks. 3) Relays CoinWin will launch MTA in the DEFI zone at 22:00 on July 18: According to official news, CoinW will launch MTA (Meta) at 22:00 on July 18, and at the same time open the "triple gift "Activity, recharge MTA to get MTA, buy MTA to enjoy 0 handling fee, and trade to share a prize of 50,000 yuan. It is reported that mStable is an Ethereum-based stablecoin aggregation protocol that provides a one-stop solution for stablecoin users and is committed to making stablecoin, lending, and swap (swap) trading services easier to use. [2020/7/18] Both Polkadot and Cosmos rely on the relay protocol to complete communication interconnection. Connect with other public chains through Polkadot and Cosmos, and set different functions for different chains to achieve better scalability and efficiency. 4. Hash lock The most representative is the Lightning Network: within a certain period of time, a micropayment channel is created by means of a deposit lock, but only small and micro amount transactions are supported. The use of asset cross-chain The main reason for the existence of asset cross-chain is that the current asset platforms are separated from each other. The total amount of the digital asset market is huge, but the existence of various subdivided ecology makes the available assets insufficient. Taking the simplest bitcoin as the public chain with the most consensus at present, it cannot participate in the DEFI ecology. The nature of the chain itself makes it difficult to do things related to smart contracts. How to financialize high-value, high-liquidity, and high-recognized assets is the biggest use of cross-chain assets. Specifically, the use of cross-chain assets on DEFI can be subdivided into mortgage assets, providing liquidity pools for decentralized transactions, and derivative value. Take WBTC, which currently has the largest number of Bitcoin-anchored coins, as an example (currently there are about 150,000 WBTC, accounting for about three-quarters of the total number of Bitcoin-anchored coins), most of the WBTC is currently used in Compound , AAVE and MakerDao and other lending platforms as collateral assets. WBTC is mainly a liquidity pool in the DEX field, and its development began to accelerate after the rise of liquidity mining. Such as providing liquidity in uniswap's WBTC/WETH pool. Provide the underlying standard of derivatives such as insurance, options and other related decentralized financial applications, but the current development of this area is not as perfect as the development of lending and liquidity provision. The current limitations of asset cross-chain However, there are many problems in the current asset cross-chain. For example, Xiao Ming has 1 BTC in his hand, and he also wants to obtain income through DEFI mining. He found that all DEFI platforms do not accept Bitcoin for direct financial management. Bitcoin must be exchanged for Bitcoin on Ethereum before you can participate in mining on platforms such as Compound and discover the value of Bitcoin. He first chose WBTC, which is currently the largest bitcoin-anchored currency in circulation (the BTC anchored with WBTC is stored in the cold wallet on the chain by the custodian BitGo), and later found that WBTC relies on acceptors, and he fell into thinking. What if the acceptor runs away? Isn't your own bitcoin insecure? Although BitGo has managed 16 billion US dollars of assets, these assets are not BitGo's own. If BitGo misappropriates or loses the BTC reserves corresponding to WBTC, BitGo will go bankrupt at best, and the holders of WBTC will suffer heavy losses. So Xiao Ming set his sights on the decentralized Bitcoin-anchored currency, and there is no central authority to manage the locked Bitcoin, such as RenBTC and eBTC. How does this kind of decentralized Bitcoin-anchored currency ensure the safety of user funds? RenBTC allows users to deposit native BTC into the designated RenBridge gateway as collateral, and RenVM issues the corresponding renBTC in the Ethereum network through smart contracts. The entire issuance process is relatively decentralized. The working principle of RenBTC eBTC is to host BTC assets in a multi-signature address by 10,000 custodians, and group these 10,000 custodians repeatedly. The system randomly selects signers, and signers can also leave the network at will to ensure decentralization. At the same time control the cost of signing. Source: eBTC network design Prospects for cross-chain assets With the development of decentralized finance, the "wall" between chains will definitely be broken more easily, and the limitations of cross-chain assets will become smaller and smaller. Under the premise of ensuring decentralization, holders of traditional digital currencies such as Bitcoin and Litecoin, and new currency related to NFT can participate in DEFI applications at the lowest cost. There are 100 demands, and there must be 1,000 supplies. How can future cross-chain assets achieve Datong? Still worth looking forward to.


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