Mapping Ethereum’s DeFi eco-system projects on Polkadot

Priyeshu Garg

Polkadot has been rapidly growing from a niche blockchain project to one of the richest DeFi networks that have real potential to compete with Ethereum. While still in its infancy, the network already has a robust ecosystem of decentralized applications, all of which offer similar, and sometimes even more functionalities than their Ethereum counterparts.

We take a look at some of the upcoming Polkadot parachains and compare them to their Ethereum counterparts.

Projects flocking to utilize Polkadot’s scalability and decentralization

Introduced in 2016, Polkadot has become one of the most influential blockchain platforms on the market, with its sights set on achieving unprecedented decentralization. The blockchain was created by Gavin Wood, one of the original founders of Ethereum, who envisioned the platform as a way to provide businesses and developers easier access to blockchain technology.

Wood’s quest, as time has shown, has become incredibly attractive to developers. In the past year, dozens of new projects have launched on Polkadot with dozens more planning on migrating at least a portion of their networks to a Polkadot parachain.

Smart contract execution

One of the most exciting categories of the DeFi ecosystem that have gotten a lot of traction on Polkadot are smart contract execution projects. Smart contracts on Ethereum cannot be executed by a third-party protocol built on top of Ethereum, which drastically limits the effectiveness of the network.

Polkadot, however, enables developers to launch all kinds of smart contract execution platforms on its parachains. Phala, Edgeware, Plasm, and Moonbeam are the most promising smart contract execution projects currently on Polkadot, each one bringing a different kind of functionality to the network.

The Phala Network brings a layer of privacy to smart contract execution, with its founders claiming it’s the first confidential smart contract network built on Substrate. Phala applies a Trusted Environment Execution (TEE) design that allows confidential data to run in an isolated and private environment and outputs results alone with authorization.

Phala currently has two products—the pLIBRA and Web3 Analytics. The former is a confidential computation component built for Libra granted by Web3 foundation, while the latter is a tool that analyzes user data and output results without invading personal privacy.

Edgeware is a third-generation, self-upgrading smart contract platform in the Polkadot ecosystem. The Substrate-based chain allows users to create smart contracts written in Rust and compiled into WASM. What makes Edgware unique is the fact that it’s able to provide ongoing self-improvement without requiring the system to stop. The platform’s modularity separates different blockchain parts into modules, allowing changes to be performed on just a single part of the blockchain, not the whole system.

Moonbeam is another Ethereum-compatible smart contract parachain on Polkadot. Set to reach full capacity in 2021, the big part of its functionality is offering a set of unique features that target Ethereum developers. It’s a highly-specialized Layer 1.5 chain that mirrors Ethereum’s Web3 RPC, accounts, keys, subscriptions, logs, etc. The goal of the platform is to extend the base feature set found on Ethereum with additional features and functionalities that include on-chain governance, staking, and cross-chain integrations.

The Plasm Network is a scalable smart contract platform on Ethereum supporting Layer 2 solutions. One of Plasm’s most important characteristics is the fact that it’s compatible with different types of virtual machines—as of now, the protocol supports EVM, OVM, ECDSA, and Solidity. The network was the first parachain to launch on Polkadot’s Rococo V1 testnet and the first platform to deploy a smart contract on the testnet.

Credit markets and stablecoins

With industry powerhouses such as Maker, Tether, and USDC all hosted on Ethereum, it’s no wonder other blockchain platforms have trouble competing with the network effect Ethereum has. However, several Polkadot projects have launched as direct competitors to their Ethereum counterparts, showing big promises when it comes to acquiring a significant market share.

Equilibrium is a cross-chain implementation of Curve Finance on a Polkadot parachain, launched to help mitigate the costs of swapping assets on Ethereum. The protocol identified a need for low-slippage stablecoin swaps on Polkadot and enabled users to deposit collateral to create a decentralized stablecoin called EQ. Equilibrium is similar to MakerDAO, as owning the EQ token enables its users to participate in the protocol governance.

Acala is a fully-decentralized dual-protocol network and the first stablecoin to launch natively on Polkadot. The network, however, wants to become more than just another stablecoin—Acala’s development team has set out to build a DeFi hub that powers cross-blockchain liquidity and various other applications. Just like Equilibrium, Acala is Polkadot’s counterpart to Ethereum’s MakerDAO, Compound, and Aave protocols. The platform will enable users to borrow and lend the Acala Dollar (aUSD) to manage outstanding loans and earn interest on their holdings, as well as use the token to participate in governance. Once fully launched, Acala will also derivative and DEX trading of aUSD.

Akropolis is a Substrate-based chain providing a peer-to-peer way to cross-exchange value and data between informal and natively digital organizations. Originally launched on Ethereum, Akropolis suffered a devastating hack and has been shackled by Ethereum’s mounting fees. Launching the protocol as a Polkadot parachain has enabled the team to implement its Commitments to Future Cashflows (C2FC) financial primitive and simplify the creation of financial applications on Polkadot.

Bandot is a mortgage-based stablecoin based on Substrate, supporting the value exchange between different parachains on the Polkadot network. The platform’s users can issue smart tokens through the Bandot protocol and automatically exchange them through the value anchoring of the Bandot AMM. Users holding BDT, the protocol’s native token pegged 1:1 to the USDT, can participate in on-chain governance and access staking mortgages. Bandot’s BDT supports different types of currency collateral—DOT, BTC, and ETH.

Decentralized exchanges

Once considered the heart and soul of the Ethereum ecosystem, decentralized exchanges recently began suffering from mounting gas fees and increased congestion. Users looking to migrate to cheaper and more efficient options will benefit from Polkadot’s counterparts to the ever-popular DEXs such as Uniswap, Curve, Balancer, and Bancor.

Polkaswap is a non-custodial cross-chain AMM DEX designed especially for the Polkadot and Kusama ecosystems. The decentralized exchange employs a unique Aggregate Liquidity Technology (ALT) offering near-boundless liquidity with the security and convenience of a decentralized exchange. Polkadot’s interoperability enables Polkaswap to trade any tokens—decentralized exchanges based on Ethereum are limited to the network’s ERC-20 tokens. As it’s built on the SORA Network, Polkaswap will offer lower gas fees, making lower volume trades possible. Liquidity providers on the network are rewarded in the PSWAP token, earning 0.3% of trading fees per transaction.

HydraDX is another direct competitor to Ethereum’s Uniswap and Curve. A decentralized platform powered by Substrate, HydraDX enables developers to implement system-wide upgrades without triggering a hard fork. This makes HydraDX much more functional than its Ethereum counterparts—the platform enables users to swap cryptocurrencies from different blockchains, provide liquidity to earn rewards, and create new liquidity pools for new tokens. HydraDX implements an unconventional AMM model, using a single decentralized pool whose liquidity comes from individual liquidity provers and the platform itself. Liquidity provided by the protocol uses the platform’s native cryptocurrency, HDX, while individual LPs provide a wide basked of assets.

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DeFi on Cardano will enable users to earn yield on staked ADA

Priyeshu Garg

Once Cardano’s Goguen era is launched, users will be able to earn additional yield on their ADA without having to unstake their funds. Liqwid Finance, a DeFi solution built on Cardano, will enable users to earn governance tokens by providing liquidity to the ADA market on Liqwid—all the while their tokens remain staked on the mainnet.

Goguen set to unlock vas new DeFi capabilities on Cardano

Most of the conversation focusing on Cardano’s upcoming Goguen era seems to be analyzing the steps needed to unlock the smart contract functionality. However, the concrete things Goguen will bring to the blockchain seem to be seldom, if ever, discussed.

Liqwid Finance, a DeFi project built on Cardano, highlighted some of the upcoming features Goguen will enable, giving the Cardano community a rare glimpse into what the future will look like on Cardano.

Namely, the project, which won the first prize on IOHK’s Wyoming Hackathon in October, said that they received a lot of inquiries from the Cardano community about their upcoming Liqwid tokens. The DeFi platform focuses on peer-to-peer lending and is set to launch governance tokens that will be distributed as rewards for users providing liquidity.

The company said that the tokens will launch through user distribution and yield farming contracts just as the first HFC event for Goguen unrolls in February.

Yield farming rewards on top of standard staking rewards

While many members of the Cardano community seemed excited for the opportunity to provide liquidity to lending markets on the blockchain, some seemed worried that liquidity pools would drain the ADA delegated to stake pool operators.

However, Liqwid quickly disproved these claims by revealing that users who want to supply liquidity to lending pools on their platforms won’t have to give up delegating their tokens to stake pools.

The token locking functionality released last year, when combined with other features of smart contracts on Cardano, will enable users to earn additional funds on top of the standard staking rewards they get for delegating. Providing liquidity to a lending pool, such as the ones offered by Liqwid Finance, will not affect the funds delegated to stake pools.

The company also revealed that Liqwid’s core developers are currently exploring the option of having a hardware wallet connection to its platform. This would enable users to hold their ADA in a hardware wallet such as Trezor or Ledger and still provide liquidity to any lending pool on Cardano.

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This company is bringing DeFi to 140 million users thanks to a $50 million round of venture capital

Priyeshu Garg

Alameda Research, the company behind the FTX exchange, has led a funding round that raised $50 million to create a DeFi ecosystem on Maps.me, an offline mapping application. The funding will enable a multi-currency wallet to be launched on the Maps.me platform, unlocking decentralized payments for the app’s 140 million users.

Popular offline mapping app receives $50 million in funding from major investors

A hugely popular offline mapping app Maps.me has just raised $50 million in funding to bring decentralized finance to its 140 million users. According to a press release shared with CryptoSlate, the funding round was led by Alameda Research, the company behind the FTX cryptocurrency exchange.

Genesis Capital, a Hong Kong-based investment firm, and CMS Holdings, a principal investment firm focused on the crypto industry, also participated in the round.

The funding will be used to introduce an embedded multi-currency wallet on the Maps.me mobile app, effectively unlocking the world of decentralized finance to tens of millions of new users. Maps.me said that the wallet will be able to provide access to turn-by-turn routing, travel guides, and hotel bookings, as well as process “a wide range of payment and investment tools in the Maps.me ecosystem.”

Introducing the world of decentralized finance to Maps.me users

The wallet embedded in the app will allow users to store value and earn yields of up to 8 percent. Users can also use the wallet to exchange funds, send money, and get cash back on transactions made through the app.

One of the biggest goals of Maps.me is to use the funding to combat the high fees seen on foreign exchanges. The company said that banks and third-party travel booking platforms also have extremely high commissions that make travel bookings a burden. The goal of the wallet, representatives from the company said, is to enable users to make direct bookings with near-zero fees.

Alex Grebnev, the co-founder of Maps.me, said that the company was looking forward to working with Alameda Research as the company has achieved significant scale in terms of its number of users.

Alameda Research noted that the main reason behind investing in Maps.me was the potential the platform has to bring about new users to the world of decentralized finance. Sam Bankman-Fried, the founder and CEO of Alameda and FTX, said:

“By embedding and democratizing access to yield-earning finance to millions of users via an everyday app, Maps.me has the potential to really propel DeFi mainstream adoption and bring a groundbreaking technology to the masses.”

Users of the FTX exchange can participate in the IEO of the MAPS token on the FTX platform. The token will be issued both on the Solana blockchain as an SPL token and on Ethereum as an ERC-20 token. The exchange limited the IEO to users whose accounts are KYC2 and ve either 1,000 FTT staked or a 30-day trading volume of at least $50,000.

Posted In: Adoption, DeFi

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Staking Polkadot (DOT) just became easier for institutions

Priyeshu Garg

Crypto custodian Fireblocks has announced the launch of new proof-of-stake capabilities on its platform, enabling its 165 enterprise and institutional clients to stake cryptocurrencies. The service rolled out with support for Polkadot (DOT), Tezos (XTZ), and Ethereum 2.0 (ETH) and promises a yield increase ranging between 5 and 15 percent.

Fireblocks users can now stake three cryptocurrencies, including Polkadot

While cryptocurrency staking is considered a relatively new thing in the industry, an increasing number of institutions and enterprises have been expressing their interest in the service.

Fireblocks, an enterprise-grade platform for moving, storing, and issuing digital assets, said that the significant demand from customers pushed them to introduce the service to its platform.

In a press release published on Jan. 14, the platform announced the launch of hosted proof-of-stake (PoS) services for Polkadot (DOT), Tezos (XTZ), and Ethereum 2.0 (ETH). To enable staking to their 165 enterprise and institutional clients, the platform partnered with infrastructure providers Staked and Blockdaemon.

“We are launching staking wallets to Fireblocks customers who collectively hold a significant balance of crypto assets,” Fireblocks CEO Michael Shaulov said. While he noted that the majority of Fireblocks’ clients hold bitcoin, the company has over $1 billion in assets between DOT, XTZ, and ETH.

This comes as no surprise considering the fact that some of its largest customers include major players in DeFi lending—BlockFi, Celsius, Nexo, and Salt. Revolut, B2C2, Coinflex, and Galaxy Digital are also some of its clients.

Hands-free delegation for institutions

Michael Shaulov, the CEO of Fireblocks, said that setting up staking requires the highest degree of security in storing the asset and delegating it to staking nodes or operators. According to him, this has been one of the biggest obstacles for institutions looking to diversify their portfolio and dip their fingers into staking.

The new service, which utilizes Fireblocks’ MPC-based wallets and monitoring infrastructure provided by Staked and Blockdaemon, managed to effectively solve this problem. The company claims that all of the assets staked on its platform will be protected from cyber attacks, internal collusion, and human error.

All of this could bode incredibly well for Polkadot, whose massive price growth could make it interesting to institutions looking to access blockchain technology. With a stable 13.78 percent annualized staking reward rate and a growing ecosystem, Polkadot has the potential to become a go-to platform for enterprises.

The same goes for Tezos and Ethereum 2.0, which could also see a rising interest in staking in the following months.

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