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Building multi-chain is a new need for DeFi products

5 min reading

It seems like it is a necessity for DeFi products to be a multi-chain in order to reach out and develop further.

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Right now, your DeFi product needs to be multi-chain in order to compete - that's a tough (and exciting) reality for 2021. Whether you're building a wallet, credit service or DeFi game, your target audience knows there's more to it than the Crypto space. it as Ethereum. And they expect you to offer the best of all worlds.

There always seems to be a debate about which blockchain is the best base for the project. Enhanced security, low transaction fees and incredible speed - there will always be chains that offer more value. As speculators argue about the next potential Ethereum killer, a new multi-chain reality emerges that is less competitive. Rather than a dog-eat-dog framework, the future of blockchain and DeFi will support connected products in collaborative multi-chain consumer solutions, ultimately forgetting products that remain isolated.

This trend is driven in part by the Polkadot and Kusama ecosystems, which are based on a multi-chain philosophy. The parachains connected to the relay circuit communicate with each other seamlessly, which raises the bar even higher for the entire room. With a second line parachute slot auction imminent, they continue to set the standard for the multi-chain industry. Projects that make it easier for the average user to connect more systems – such as the Moonbeam protocol and the Phantom portfolio – are raising millions of dollars to simplify this new multi-chain reality for consumers. But how do you deal with it as a developer?

We can clearly see that the market is shaped by consumer needs. Depending on their needs, your users turn to blockchains that serve them better - and platforms that provide access to them. As a result, projects that support multiple chains get a larger audience and more liquidity. This means that your DeFi product must support at least Ethereum and a "niche" blockchain - there are established leaders in trading, betting, irreplaceable tokens (NFT) and more. And the more circuits you can use, the better. As a developer, when pursuing this multi-chain goal, you can face several obstacles.

Obstacles to build multi-chain

  • High cost: let's say you want to cross-connect; You need to do a large number of nodes for all the circuits you want to connect together. It is expensive and very maintenance intensive. It can be expensive for developers to get up and running nodes from a single blockchain. Now imagine you have to connect two, three, or ten. This becomes very difficult in terms of hardware, maintenance and access to capital. You will need more resources and investment to get started unless you can find another inexpensive solution.
  • Security Challenges: With the recent bridge hacks, security remains one of the biggest multi-chain challenges - when you trade assets, there are more opportunities for hackers. If we look at the recent PolyNetwork incident, we can see that bridges can be very vulnerable. Hackers discovered network flaws in messages between poly chains and used them to generate about $600 million in user funds. This is an important lesson for new multi-chain DeFi solutions to understand the consequences of security failures.
  • Layers of Complexity: Of course, linking and integrating blockchains adds another layer of complexity and solutions required to link disparate chains. Each chain offers a new set of quirks, mechanics and nuances that builders need to understand. This likely means that DeFi organizations will need access to more talent to gain access to more skills. Blockchain is constantly evolving, and so are you.

The solution

Despite the added hurdles and difficulties of building multi-chains, this is critical to the future success of DeFi products. There are no isolated products on Web 3.0, because they don't exist in a vacuum, but in a new, decentralized economy. Projects need a stable and networked infrastructure in order to advertise effectively in this economy and to inspire new target groups. But how do we get there?

We need to provide developers with easy and affordable access to nodes, APIs, and support for an ever-growing number of blockchains. With more build options, DeFi developers can break down barriers to entry and contribute to next-generation blockchain and finance. The sooner we break this bottleneck, the smoother our next step towards a better user experience and mass uptake will be.

 

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The new DEFI platform enters the market! Earn passively - token sale 0.25 $

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