2020 was called the "First Year of DeFi". In this year, a new round of explosive growth happened in blockchain.
Relying on the previous architectural foundation, distributed finance has grown savagely under the DDM incubation of the public chain. Numerous DEX and smart protocols are like the fleets in the 15th World European Navigation Era, which has opened up a new era of crosschain for decentralized finance.
Compound's first liquidity mining has completely promoted the explosion of the market.
UNISWAP quickly took the concept of DEX into the hearts of the people
The rapid rise of countless DEX has made the centralized exchanges feel like sitting on pins and needles.
However, despite the rapid development of the entire industry has showed great potential, it is still in the early stages of "barbaric" development.
The total locked-up volume (TVL) in DeFi finance is one of the most important indicators to measure the scale of the DeFi industry. It calculates the total value (USD) of all ETH and various ERC-20 tokens locked in the smart contract of a project. The figure below shows the change trend of the lock-up volume from the beginning of DeFi (in 2017) to the present. It can be told that the decentralized financial market has actually experienced a "dormancy period" of up to three years, during which the lock-up volume has always been at a low level. Struggling. It wasn't until Compound distributed COMP governance tokens to users in June 2020 that the lock-up amount showed a significant change. Then it rose rapidly at an alarming rate (the total lock-up amount of DeFi has exceeded $35 billion at the time of writing, and the real lock-up amount exceeds $25.5 billion).
Tons of Difficulties in the Great Era of Crosschain
The development of Defi is indeed exciting, but with the continuous development of the industry and the continuous increase in transaction volume and lock-up volume, the DeFi ecological problems dominated by the ETH Ethereum chain have gradually been exposed. Among them, the most unacceptable problems are network congestion and high GAS fees. The GAS fees used for transfer is as high as a few dollars, and the highest fee is more than 20 times the average. A transfer may even take several hours.
The high transaction fees and limited throughput on the ETH chain are bad for the continued development of DeFi.
In the great era of blockchain, there are more than one route and more than one fleet. In view of the difficulty of ETH, the main solutions in the market include: 1. The expansion plan for ETH layer2 led by matic; 2. The new public chain plan led by BSC SOLONA.
New public chains such as BSC and Solona attracted huge traffic in the DeFi ecosystem on ETH when they were launched. They are fast in transaction speed, low in GAS fee and wonderful in product design. The ecology of DeFi continue to develop with the support of multiple high-quality public chains.
On the other hand, the research on ETH Layer2 is also constantly moving on. With the continuous advancement of technologies such as Matic, Plasm, and ZK rollup, the development dilemma of DeFi seems to have a new way out.
Has the ecological problem of DeFi been solved?
No, no, new problems come out. The development of technology is often acted like this. Problems continue to appear, and then they continue to be solved. The new problem that appears in DeFi this time is how to aggregate DeFi liquidity that has been dissipated by congestion and develop new liquidity. Because on the current DEX aggregation track, most platforms only support the DEX on a single blockchain network, and does not provide cross-chain asset exchange services, which cannot meet the needs of users. Besides, many tokens with high market cap are restricted due to their smart contracts, and their liquidity has also been hindered.
How should DeFi aggregate the dispersed liquidity, and how should it develop new liquidity?
Crosspoly, opening a new route for the great era of crosschain
In response to this problem in the current DeFi ecosystem, Crosspoly Lab from Silicon Valley provides a perfect solution.
Crosspoly is a heterogeneous cross-chain aggregation protocol based on multi-computing distributed key management. It provides transaction traffic for each DEX on public chain, finding the best price for DeFi users and automatically placing orders. It is committed to providing users with more mutual trust, safer and mor efficient flow in the transaction of heterogeneous assets.
Take the exchange transaction of BNB and ETH as an example. If users need to operate in DEX, they need to go through a complicated cross-chain process, and the time period may be as long as several weeks. For new users, it is even impossible to find the corresponding exchange method. The advantage of crosspoly lies in the one-click smart exchange. Users don’t need to know which and where token is traded. Crosspoly automatically finds the transaction pair of a certain token without user judging its depth. Crossply analyzes contract address data for users and automatically analyzes the optimal depth and price, allowing users to achieve a centralized experience in decentralized products, and the interaction method of K-line and technical indicator line is the same as the centralized experience.
As shown in the figure, the DeFi gas fee reached its peak in 2021, with the highest daily fee exceeding 15,000 ETH, which is approximately $45 million. Except for DeFi transactions, most of the gas fee comes from the packaging and distribution of cross-chain assets. Such a huge gas is really unacceptable for individual users. At the same time, it is not conducive to the sustainable development of DeFi's cross-chain ecology. Through the Crosspool of Crosspoly, these redundant and wasteful transaction requirements can be effectively solved, thereby greatly reducing the congestion of the block and greatly reducing the transaction fee. According to Crosspoly intranet test data, if Crosspool can account for 1% of the transaction funds of the entire network, the daily fee of the entire network will be reduced by about 30%, which reaches $7.5 million.
The reason for able to achieve such a large fee reduction is the technical support provided by Crosspoly, which extends the protocol on the the original cross-link protocol to overcome the algorithm differences between different chains. This is also the biggest technical highlight of the crosspoly.
Through the intelligent heterogeneous cross-chain aggregation protocol, Crosspoly establishes multiple aggregated cross-chain transaction pools to provide transaction traffic for each DEX on public chain. It selects the best price for DeFi users and automatically places an order. It searches for the best depth on major public chains for slippage protection, and judges the trading pair with the highest price when selling and the best price when buying, and automatically places single. At the same time, public chain assets of different ecology are introduced to cover most transaction scenarios.
In order to solve the impermanence loss problem of DEX, Crosspoly adopts the intelligent AMM market maker mechanism and independent cross-chain technology. Various DEXs are aggregated through heterogeneous cross-chain + aggregate swap, and real-time RAM price oracles are used to retrieve smart contract data in microseconds in real time, bringing users the lowest GAS fee and the smoothest trading experience. This achieves a senseless transaction that is smoother than that of a centralized exchange.
SPMC Private Key Management Mechanism Makes Crosschain More Secure
Besides the problem of liquidity ecology of DeFi, security is also one of the major problems in the blockchain. The attacks on DEXs are mostly caused by the price-feeding mechanism of the oracle machine.
In Crossspain V1.0 of Crosspoly, the team uses SPMC technology to split the private key of Crosspoly cross-chain aggregation pool into 32 segments(Sk1-SK32), and distributes them to 32 private key segment managers. Each manager only has one private key fragment. Any transfer operation can only be performed on chain assets after all private key managers agree.
Each private key segment is backed up to 31 notaries at the same time. When the manager is not online, the notary will provide the missing segments to ensure successful transactions. In addition, all managers and notaries conduct an on-chain election every 10 minutes, and the election method is determined according to the number of CP Tokens staked on the chain.
At the same time, Crosspoly will continue to conduct notary election campaigns in the updated versions, and more private key managers will participate in asset management. In a real sense, the DAO governance model is used to conduct community governance. All can contribute their own strength to the project and participate in community construction.
In addition, all private key managers can get all the exchange settlement profits of cross-chain transactions, and encourage more users to participate in the election and the construction of a prosperous ecosystem.
Cross-chain (Crosspool) Encapsulated Asset Liquidity Mining
Crosspool cross-chain encapsulated asset liquidity mining is a solution to the shortage of asset liquidity between cross-chains. The cross-chain aggregation protocol combines platform cross-chain encapsulated assets and on-chain assets at a 1:1 ratio for LP mining. Through mining rewards, the encapsulated asset conversion and smart contract interaction of cross-chain encapsulated and mapped assets on different public chains are realized. Crosspoly's mining incentive method can not only promote the liquidity of platform assets, but also drive the capital flow of major DEXs, promote the sustainable development of the DeFi ecosystem, bring benefits to users themselves, and achieve a win-win situation.
Crosspool, the cross-chain encapsulation of asset liquidity mining, is a solution to the shortage of asset liquidity between cross-chains. The cross-chain aggregation protocol combines platform’s cross-chain encapsulated assets and on-chain assets at a 1:1 ratio for LP mining. Through mining rewards, the encapsulated asset conversion and smart contract interaction of cross-chain encapsulated and mapped assets on different public chains can be realized. Crosspoly's mining incentive method can not only promote the liquidity of platform assets, but also drive the capital flow of major DEXs, promote the sustainable development of the DeFi ecosystem, bring benefits to users themselves, and achieve a win-win situation.
For example: If a user wants to convert BTC/XRP/FIL to BTC/XRP/FIL on the ETH chain, he only needs to transfer a BTC/XRP/FIL into the Crosspool, and the swap pool triggers the contract to generate a cross-chain encapsulated assets in ETH format, like eBTC/eXRP/eFIL. And in this case, the eBTC/eXRP/eFIL and wBTC/wXRP/wFIL (ETH chain mapping token) can be combined together to do the LP mining, so as to realize the liquidity of cross-chain encapsulated assets.
Participate in Crosspoly Now
In August, the Crosspoly Aggregation Cross-Chain Trading Competition is about to kick off. At that time, 5 million CP tokens will be airdropped and product testing and community promotion will be carried out. Participation will not only enhance your mining experience, but also may get unexpected huge amounts of profits.
At present, Crosspoly has launched the chain-aggregation agreement. Next month, the Mediterranean era version of CrossPoly Crossmed will be officially launched. It will support mainstream DEX of Etherum, BinaneSmartChain, huobi EcoChain, polygon, and support Uniswap, Sushiswap, Mdex and other protocols.
In September, Crosspoly will launch a distributed private key management mechanism and heterogeneous aggregation cross-chain protocol to further expand transaction scenarios, BTC, LTC, ADA, FIL and other non-smart contract full aggregation protocols will be supported, which breaks up ecological barriers.
It is expected that in mid-to-late July this year, Crosspoly Crossmed V1.0 will be launched soon. The cross-chain protocol for homogeneous aggregation will be officially launched for public testing, including Uniswap, sushiswap, mdex and pancake.
In early August, the CrossPoly Crosseur version is updating. The private key management mechanism and heterogeneous aggregation cross-chain will be officially launched.
At that time, the era of blockchain, the great crosschain that belonging to Crosspoly will officially begin!
Crosspoly, which focuses on the strength of the platform, aims to build a thriving ecological system. In the future, as the transaction volume and liquidity continue to increase, Crosspoly will gradually improve the product structure and become a powerful competitor on the track.
As for the participants, you may not be able to seize every opportunity in the market, but as the cross-chain aggregation track takes off, Crosspoly is undoubtedly the biggest opportunity that can be seized right now.