For now, a multi-chain DeFi product must be a competitor – that’s the hard (and exciting) truth of 2021. Whether you’re building a wallet, offering lending services or playing DeFi, your target audience knows there’s more to cryptocurrency. more than Ethereum. They expect you to offer the best of both worlds.
It seems that there will always be disagreement about which blockchain is the best basis for projects. Increased security, low transaction costs and tremendous speed – there will always be a chain that provides even greater benefits. As speculators discuss the next potential Ethereum killer, a new multi-chain reality emerges with less impact on competition. Instead of a dog food structure, the future of blockchain and DeFi will favor products that overlap the collaborative multi-chain solution for the user and eventually forget those who remain isolated.
This trend is supported in part by the Polkadot and Kusama ecosystems, which are based on the multi-chain philosophy. Parachains connected to a relay circuit easily connect to each other, raising the bar even higher for the entire space. With the second batch of parachute auctions approaching, they continue to set the standard for the multi-chain industry.
Projects that make it easier for the average user to connect to multiple systems, such as the Moonbeam protocol and the Phantom wallet, raise millions of dollars to make this new multi-threaded reality easier for users. But how do you navigate as a developer in this?
We can clearly see that the market is shaped by users’ requirements. Based on their needs, users turn to the blockchains that suit them best and the platforms that give them access. As a result, projects that support multiple networks gain a large audience and more liquidity. This means that at least your DeFi product must support Ethereum and the ‘niche’ blockchain – there are well-known leaders in trading, betting, non-financial tokens (NFT) and more. And the more lines you can interact with, the better.
When you are a developer with these multithreading goals, you can face many obstacles.
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Barriers to building a multi-chain
For high costs: assume you want to build a bridge over the chains; You need to run a large number of nodes for all the chains you want to connect. It is very expensive and time consuming to maintain. Implementing and launching a single blockchain node can be costly for a developer. Now imagine that you have to connect two, three or ten.
This becomes very difficult in terms of equipment, maintenance and access to capital. If you do not find other cost effective solutions, it will require a lot of resources and investment to get started.
Security Challenges: In light of recent bridge breaches, security remains one of the biggest challenges associated with multihomed – there are several opportunities for hackers when exchanging assets. If we look at the recent incident with PolyNetwork, we can see that bridges can become very weak.
The hackers discovered network vulnerabilities in Polys messages across chains and used them to get around $ 600 million in user money. This is an important lesson for the new DeFi multi-chain solutions to understand the implications of security flaws.
Difficulty levels: Of course, connecting and merging blockchains will add to the levels of complexity and solution needed to connect different chains. Each series provides a new set of features, mechanisms and nuances that builders must become familiar with. This is likely to mean that DeFi organizations will need access to a wider pool of talent to access more skills. Blockchain is constantly evolving, and you need it too.
Solution
Despite the additional obstacles and complexity of building multi-circuits, this is crucial for the future success of DeFi products. There can be no isolated products in Web 3.0, because it does not exist in a vacuum, but in a decentralized economy for a new generation. Businesses need a strong and connected infrastructure to drive effectively in this economy and attract new target groups. But how do we get there?
We need to give developers easy and affordable access to nodes, APIs and support for an ever-increasing number of blockchains. With more ways to build, DeFi developers can break down barriers to entry and start contributing to future generations of blockchain and finance. The sooner we overcome these barriers, the smoother our next steps in improving communication will be.
