Wanchain vs Flare — Why Wanchain Is The Ultimate Protocol For XRP
The doom and gloom of 2020 brought an onslaught of challenges to the global economy as well as lives all across the world. Those who were invested in the cryptocurrency market experienced one of the last brunts of the multi-year bear market. Fortunately, the latter part of the bear market brought the official emergence of DeFi (otherwise known as Decentralized Finance). DeFi, or decentralized finance is a decentralized, peer-to-peer financial system that mirrors the world of traditional finance. Since early 2020, DeFi has grown from a multimillion-dollar TVL rate to an astonishing $60 billion in total value locked.¹
The emergence of DeFi has opened the gates to a new world of banking and financial services that anyone with little more than an internet connection can participate in. However, for DeFi to further reach its goal of becoming completely mainstream, it must be usable for everyone across different blockchain protocols. Thankfully, Wanchain is at the helm of this goal as its technical focus aims to interconnect and utilize all blockchains through DeFi.
Wanchain- Bringing DeFi To All Platforms
What is Wanchain?
Wanchain is a well-established, decentralized blockchain interoperability solution. Wanchain’s mission is to drive blockchain adoption through interoperability by building fully decentralized bridges that interconnect many of the different existing blockchain networks. This cross-chain infrastructure empowers developers to build truly decentralized cross-chain applications to power the future of DeFi.
How does it work?
Wanchain’s protocol utilizes a unique network of decentralized Storeman Nodes that manage the exchanged assets between blockchains in a way where funds are not obtained by a centralized entity. This system enables users to transact and engage throughout different blockchains and DeFi applications back and forth across various blockchain platforms.²
How do Wanchain Storeman Nodes work?
Wanchain’s storeman node system is at the core of its cross-chain technology. Storeman nodes are nodes that verify cross-chain transactions and ensure the smooth and secure transfer of value between heterogeneous blockchains. Through the application of multiparty computation and threshold secret sharing, the storeman nodes work together to perform cross-chain transactions without revealing the private keys of the accounts involved. Storeman nodes take turns in active delegation which means that no single storeman node can be in charge for too long. There are multiple storeman nodes, each containing a unique signature that are grouped and delegated randomly to ensure increased decentralization and maximum security from any possible deviants.³
Every time a cross-chain swap is carried out, a vast majority of storeman nodes agree and the amount of required signatures is used in confirming the swap. This mechanism is known as the threshold signature scheme. Exploiting nodes to steal funds is practically impossible as such a task would require a vast majority of all storeman nodes to be attacked to get the required amount of signatures from each node simultaneously.
Overall, those who use Wanchain’s cross-chain protocol can enjoy quick and seamless transfers between blockchains. What’s better is that Wanchain’s cross-chain bridge service is absolutely free of charge. The natural framework of Wanchain’s platform means that all cross-chain transactions are decentralized, secure, and fully collateralized.
Wanchain- a veteran in successful cross-chain bridges
Wanchain has already launched a series of successful blockchain bridges which helps to unite all cryptocurrency users:
Supported WANbridges:
- Bitcoin-Ethereum direct bridge
- Bitcoin-Wanchain bridge
- Ethereum-Wanchain bridge
- EOSIO-Wanchain bridge
- XRP Ledger-Wanchain bridge
- XRP Ledger-Ethereum bridge
- Binance Smart Chain-Ethereum bridge
XRP- The Multi-Billion Dollar Global Payment Gargantuan’s intro to DeFi
Sitting at over a $120 billion dollar market cap in 2018, XRP is one of the largest cryptocurrencies that specialize in cross-border payment solutions for large financial institutions. The Ripple network is one of the most extensive in the blockchain space as its partners have ranged from well-known financial giants like American Express, Santander, Bank of America, MUFG Bank, and the Royal Bank of Canada to name a few.
One of the most important details to note is that Ripple and XRP have a huge community and enjoy one of the most prominent fan bases in the crypto sphere. The problem, however, is that the entirety of XRP in user’s wallets cannot be used in DeFi applications like those found on Ethereum. A system that allows users a gateway for XRP into DeFi is a game-changer for both the XRP ecosystem as well as for DeFi’s TVL as it helps to achieve mass adoption for decentralized financial services.
Flare Network- A new Wanchain Rival?
Looking to solve XRP’s problem of isolation is the Flare Network. The Flare Network is a “distributed network running the Avalanche consensus protocol adapted to Federated Byzantine Agreement and leveraging the Ethereum Virtual Machine. It can thus be leveraged as a scaling method for smart contract networks without relying on economic safety mechanisms. The absence of a link between network safety and the native token, the Spark, allows for greater flexibility as to how the native token can be used.
Flare XRP (FXRP) is backed by Flare’s Spark token and is exchangeable at a 1:1 ratio with XRP. The FXRP system is a set of financial mechanisms encoded in smart contracts that enables XRP holders to create and redeem a 1:1 representation of the XRP token on the Flare Network, called FXRP. In order to achieve this, the system relies on agents participating in the system, putting up Spark as collateral and earning fees in return.”⁴ In simple terms, agents are responsible for converting the sender's original XRP to FXRP.
Below you will find a break down of the XRP to FXRP process:
XRP -> FXRP (Minting):
Step 1: The user sends a Collateral Reservation Transaction on Flare Network to see if there is enough quota;
Step 2: If there is enough quota, the FXRP system will return a list to the user, which contains the amount of XRP to be credited to each Agent account, which means that the user’s money is not credited to one Agent, but to each agent. The proportion of the remaining quota of each agent will split its own XRP and transfer it to each agent’s account;
Step 3: After receiving the list returned by the FXRP system, the user transfers the money to each Agent account within the time specified in the list;
Step4: The FXRP system monitors each Agent account, and when it finds that the money is credited, it generates an equivalent amount of FXRP for users on the Flare Network.
FXRP -> XRP (Withdrawal):
Step 1: The user sends a Redemption Transaction on Flare Network to burn FXRP;
Step 2: After receiving the Redemption Transaction, the FXRP system tells each agent to transfer XRP back to the user account within the specified time;
Step 3: After receiving instructions from the FXRP system, each agent will call XRP to the user within the specified time. Specifically, the Agent transfers money to users in two stages, namely Cycle1 and Cycle2. If you hit all the money in Cycle1, you can get the full withdrawal fee; if you hit all the money in Cycle2, you can get a transaction fee that is comparable to the amount of money you hit in Cycle1; if you don’t hit all the money in Cycle2, then 50% of the deposit will be deducted.
Other points to note:
1. Agent’s mortgage asset type is Spark, the native currency of Flare Network, over-collateralized, and the minimum mortgage rate is 250%;
2. It is allowed to increase the deposit and withdraw at any time. If you want to withdraw, you only need to burn the same amount of managed FXRP to get the deposit back.
Unfortunately, Flare’s cross-chain solution is technically only theoretical as it does not currently have a working gateway. The above explanation assumes that Flare will work entirely as it's laid out in the whitepaper.
Wanchain vs Flare Network- Which is best for the XRP Ledger?
While both Wanchain and Flare both seek to bring XRP to the world of DeFi via cross-chain solutions, only Wanchain has a successful working bridge for XRP.
Assuming that Flare might one day release its XRP bridge, will Wanchain finally be dethroned as the current cross-chain bridge for XRP? After comparing both systems we came to some conclusions!
Wanchain’s protocol has numerous advantages over Flare
In our comparison, we found that Wanchain was:
- More secure- In the Flare Network, the users’ XRP security is ensured simply by a collateral mechanism. A malicious agent could easily steal a user’s XRP when the value of his collateral is lower than the user’s XRP amount. With Wanchain, the user’s XRP security is ensured by both the threshold signature scheme and its collateral mechanism. Only no less than a threshold number of Storeman can work together to move the XRP in a locked account. Thus, Wanchain achieves better security than Flare Network.
- More scalable- The Flare Network’s on-chain computation complexity increases linearly as the number of agents increases. In Wanchain, the on-chain computation complexity remains constant as the number of Storeman nodes increases. Wanchain can support hundreds of Storeman nodes, while Flare Network cannot support hundreds of agents. Thus, Wanchain is much more scalable than Flare Network.
- Lower cost- In the Flare Network, users are charged with three kinds of fees, i.e. Collateral Reservation Fee, Creation Fee, and a Redemption Fee. This means that Flare users must over-collateralize when using Flare Network. With Wanchain, the cross-chain service is free for users. Thus, Wanchain has a lower cost for users than Flare Network.
- Better user experience- The Flare Network requires users to send N transactions in XRPL during the issuance process, where N is the number of agents. In Wanchain, users only have to send a single transaction in XRPL. This makes Wanchain more user-friendly and simple to use.
- Quicker and more reliable redemption times- On Flare Network, users have to wait for N transaction confirmations in XRPL during the redemption process. If an agent fails to send XRP to users’ accounts in cycle 1, more time is required to send in cycle 2. In Wanchain, only a single transaction confirmation in XRPL is needed during the redemption process. Simply put, Wanchain has a shorter redemption time than Flare Network.
- Increased resistance to network delays- Wanchain’s framework makes it highly resistant to network delays. Flare Network however is easily more susceptible to network delays.
- More forgiving user fault tolerance- Flare Network if users send more XRP to agent’s accounts than required, the extra amount of XRP cannot be returned. With Wanchain, this situation never happens because users always receive the same amount of wanXRP as the XRP sent to a locked account.
Wanchain is the world’s first solution to bring XRP into the world of Defi.
XRP’s gateway into the DeFi world is a game-changer as it helps to introduce a whole new realm of utility to the XRP ledger while also leading the front lines for widespread adoption of decentralized finance. Wanchain couples one of the best user experiences in the crypto space with its cutting-edge technical prowess running in the background. Given that Wanchain provides users with the fastest, cheapest, most secure, and most reliable working solution for XRP, we must declare Wanchain as the best solution for the XRP ledger and its vast field users.
