DeFi
Developing DeFi applications is easier than ever – here’s why
If you’ve never developed a blockchain application, the prospect of doing so may seem daunting. Doesn’t this require strong coding experience, in-depth knowledge of cryptography, familiarity with smart contract languages, and many other skills? Not necessarily.
While some programming knowledge is certainly required and a working knowledge of blockchain is a definite advantage, everything else can be learned on the fly. With improved development resources, better tools and libraries, dapps can now be deployed much faster. Additionally, they can be equipped with powerful features that utilize innovations such as zero-knowledge technology – without the need to master SNARKs and STARKs.
In short, it is now possible to build and launch a feature-rich DeFi application without getting bogged down in compiling, debugging, indexing, and all the other tasks that Web3 development typically involves.
Better resources for developers
Four years ago, if you wanted to get started on Ethereum, you were on your own. Except for a handful of user-generated videos on Solidity basics and gas management, resources were scarce. This is no longer the case, thanks to a multitude of development-focused educational portals aimed at bringing builders up to speed. QuickNode manufacturer’s guide is probably the best place to start, detailing all the tools needed to build a DeFi application, from oracles to RPCs. While there are a lot of moving parts, each is clearly explained and, it should be noted, a typical dapp will not require all of these components.
Aspiring developers now have more than just learning resources at their disposal: the same goes for financial resources. A plethora of hackathons and grant programs now form a mainstay of blockchain ecosystems. Peas to EVM L2. These provide the support, mentoring and networking that can turn a DeFi idea into a concrete reality. As a result, developers no longer have to go it alone, working in a vacuum. Blockchain networks have the funds and will to help new developers get started.
Data on demand
A dapp is only as good as its data. DeFi dapps now typically pull data from a range of sources, both on-chain and off-chain. In the past, this meant running multiple blockchain nodes and being responsible for their maintenance and synchronization. However, the evolution of Web3 infrastructure providers now allows application developers to access powerful data feeds at the click of a button.
The best Web3 infrastructure companies provide data from on-chain and off-chain sources without introducing centralized choke points in the process. This is achieved by routing data through decentralized networks and using distributed storage to deliver content.
The way data is stored and delivered is now much more efficient, allowing thousands of read and write transactions to be included in a single block. Chromiefor example, uses relational tables that allow Web3 developers to access indexed data, eliminating the need for third-party indexers. Space and timemeanwhile, allows on-chain indexed data to be connected to its off-chain counterparts in a tamper-proof, relational format delivered in real-time.
Dapp developers may have 99 problems to solve, but data is not one of them.
Instant interoperability
One of the main characteristics of DeFi applications is that they are multi-chain. It is now common for EVM dapps, for example, to pull pricing data from other Layer 2s and non-EVMs such as Bitcoin. Deploying an application with built-in cross-chain functionality from day one is now relatively simple thanks to improvements in interoperability, including the emergence of cross-chain messaging protocols.
These allow data and assets to be securely transferred between different chains, enabling the execution of smart contracts based on actions that occur on other networks. Projects such as LayerZero provide decentralized infrastructure for DeFi dapps to extract data from multiple chains without introducing complexity. It’s one less thing for developers to worry about, allowing them to focus on their core competencies, knowing that interoperability is now the norm.
Smart Wallets
One of the biggest barriers to Web3 adoption has been the complexity associated with integration, especially when it comes to portfolio creation. Private key management may come naturally to crypto OGs, but seed phrases are something mainstream users have never encountered before, and they can prove a real barrier to adoption. The idea that 12 words can control an individual’s digital net worth — and that failing to secure those words can result in one’s wallet being depleted — is a liability many users don’t want to be associated with .
The arrival of smart wallets, which use various technologies, including MPC (multi-party computing), is a long-awaited breakthrough. Now, individuals can get started with Web3 without having to deal with private key management. Instead, they can secure their account using Web2 methods such as email authentication and 2FA. As a result, one of the biggest barriers to greater adoption of DeFi has been significantly reduced, but not completely eliminated.
DeFi developers can now integrate third-party wallets, including smart wallets, allowing users to log in using an authentication method they feel comfortable with. This is a major improvement aimed at making Web3 more user-friendly for mainstream users.
Making DeFi Less Intimidating
Over the past three years, many of the technical challenges of building a successful DeFi application have been resolved. From a developer perspective, a combination of better tools, educational resources, data delivery, and improved integration has made DeFi less intimidating, not only for users but also for those tasked with developing applications that rely on the characteristics inherent to the blockchain.
Even though DeFi development is now much more egalitarian, allowing small teams to compete on equal terms with larger projects, there are still issues to be resolved. One of the trickiest tasks is creating a loyal community which is the lifeblood of any successful Web3 project. But with the technical aspects now widely supported, developers can spend less time compiling and debugging and more time focusing on perfecting a DeFi dapp that delivers real utility.