Building multi-chain is a new requirement for DeFi products


Currently, your DeFi products need to be multi-chain to be competitive-this is the difficult (and exciting) truth of 2021. Whether you are building a wallet, lending service or a DeFi game, your target audience knows that there is more to the crypto space than Ethereum. They want you to provide the best in the world.

It seems that there will always be a debate about which blockchain lays the best foundation for the project. Enhanced security, low transaction costs and strong speed-there will always be a chain that provides greater advantages. When speculators argue about the next potential “Ethereum killer”, a new multi-chain reality is taking shape, which has a less obvious competitive impact. The future of blockchain and DeFi will no longer be the framework of dog-biting dogs, but will favor products that integrate into cooperative multi-chain user solutions, and eventually forget those products that remain isolated.

This trend is partly due to Polkadot and Kusama ecosystem It centers on the multi-chain philosophy. Parallel chains connected to the relay chain can easily communicate with each other, thereby raising the standard of the entire space even higher.With the second set of parachain slots auction Near the corner, They continue to set standards for the multi-chain industry.

Projects that make it easier for ordinary users to connect to more systems—such as the Moonbeam protocol and Phantom wallet—are raising millions of dollars to simplify this new multi-chain reality for users. But, as a developer, how do you navigate?

We can clearly see that the market is shaped by user needs. Based on their needs, your users are moving to a blockchain that can better serve them-and a platform that provides access. Therefore, projects that support multiple chains have gained more audiences and more liquidity. This means that your DeFi product needs to support at least Ethereum and “niche” blockchains-there are mature leaders in fields such as transactions, mortgages, and non-fungible tokens (NFT). The more chains you can interact with, the better.

When you are a developer pursuing these multi-chain goals, you may face several obstacles.

related: How much conspiracy is behind Kusama’s parachain auction?

Obstacles to building multiple chains

High cost: Suppose you want to build a cross-chain bridge; you need to run a large number of nodes for all the chains that you want to bridge together. In terms of maintenance, this is expensive and very intensive. It can become expensive for developers to start and run a single blockchain node. Now suppose you need to connect two, three, or ten.

It becomes extremely difficult in terms of hardware, maintenance, and funding. Unless you can find other cost-effective solutions, you will need more resources and investment to get started.

Security challenge: In view of the recent bridge hacking incident, security is still one of the biggest challenges related to multi-chain-when you exchange assets, hackers have more opportunities.If we look at Recent PolyNetwork events, We can see that the bridge will become very fragile.

Hackers discovered the weaknesses of the network in Poly’s cross-chain messaging, and used these weaknesses to obtain approximately US$600 million in user funds. This is an important lesson for the new multi-chain DeFi solution to understand the consequences of safety failures.





Complex levels: Of course, connecting and integrating blockchains will increase the complexity and workarounds required to connect different chains. Each chain provides a new set of features, mechanisms and nuances, and builders need to be familiar with these features. This may mean that DeFi organizations will need to access a broader talent pool to acquire more skill sets. The blockchain is constantly evolving, and you need to do the same.

solution

Although there are obstacles and additional difficulties in building multi-chain, it is critical to the future success of DeFi products. There can be no isolated products on Web 3.0, because they do not exist in a vacuum, but a new generation of decentralized economy. Projects require a strong and interconnected infrastructure to effectively promote themselves in the current economic environment and excite new audiences. But how do we get there?

We need to provide developers with simple and affordable access to nodes, APIs, and supporting the growing blockchain. Through more construction methods, DeFi developers can break the barriers to entry and begin to contribute to the next generation of blockchain and finance. The sooner we break these barriers, the smoother our next steps to improve user experience and mass adoption will be.

This article does not contain investment advice or recommendations. Every investment and trading action involves risks, and readers should research on their own when making a decision.

The views, thoughts and opinions expressed here are only those of the author, and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Chandler Song He is the co-founder and CEO of Ankr Network, a San Francisco-based Web 3.0 infrastructure company and a Forbes “30 under 30” winner. He previously worked as an engineer at Amazon Web Services.