Introducing Liquid Infrastructure: a new DeFi Primitive
From Distributed Ledgers to Real-World Assets
Blockchains as a concept have come a long way since their inception a decade and a half ago. Moving from the basic transactions of Bitcoin, to the programmability of Ethereum, to a teeming variety of on chain-applications with the proliferation of L1 and L2 chains and adjacent technologies
At each step along this path, the value proposition has seemed murky and uncertain. But with each new generation of technology, it has eventually resolved into a clear use-case that’s here to stay.
As the industry stands now, there’s clearly a niche for purely transactional chains, ones that simply move tokens from account-to-account in a decentralized fashion. With a wider and more complex scope, DeFi has also proven its longevity, presenting tools for financial markets that are provably fair and open, while remaining flexible.
The obvious question is: what’s next? To find that we can look at the failures within each of these industry-changing successes. No one would argue that transactional chains are clunky and DeFi is un-tethered to the real-world.
Transaction chains find most of their value in the global south, where the risk of corruption, theft or failure of the local financial system looms larger than the value fluctuation of tokens or UX problems around wallets and keys.
DeFi presents an incredible opportunity to uplift and open traditional financial systems. Even when performing at their most effective and efficient, traditional financial systems can’t reach the level of transparency and assurance of fairness that is possible with DeFi.
But the link between the many new DeFi opportunities and the “real world” — the world of infrastructure, of energy and utilities — the world in which we actually live — does not exist.
Thus, it is not surprising that we see a growing interest in the possibility of representing ‘real world assets’ on-chain. Currently, this discussion revolves around enlisting trusted custodians to bridge the real-world and the on-chain one. Right now, using a trusted custodian is the best approximation of that link that exists in the industry.
Althea L1 Enables Permissionless, Trustless Real-World Transactions
This is where Althea L1 enters to present a different, native, non-custodial approach to bridging the gap between DeFi and the real world.
The key concept of Althea L1 is Liquid Infrastructure. But what is Liquid Infrastructure? At the technical level, it’s a form of account abstraction that bridges the Althea L1 micro-transaction platform with its embedded EVM.
At the philosophical level it’s an approach to real-world assets on-chain that is tightly woven with actual revenue-generating applications and devices.
Liquid Infrastructure produces an NFT representing the revenue generated by a microtransaction account. This NFT can then be used in DeFi to transfer the account, aggregate the revenue, and manage the device wallet itself.
Take for example a vending machine, which accepts simple on-chain payments from people buying various snacks and drinks.
On existing platforms the funds would accumulate in a difficult-to-manage and impossible-to-transfer private key. This would inevitably lead to awkward questions: how often do you rotate the key? How might you sell the machine? What tools can you use to collect funds from hundreds of private keys safely and effectively?
On Althea L1 you can simply ‘liquify’ the vending machine account. In doing so, you create an NFT that holds revenues and allows the holder to configure the underlying account.
Liquid infrastructure NFTs represent a new DeFi primitive, connecting an on-chain asset to the real world without a custodian.
In the coming weeks, we’ll post several blogs that dive into how Liquid Infrastructure might be deployed in existing and speculative Althea L1-enabled networks. Stay tuned to find out more!
If you’re interested in building on Althea L1, you can join our ongoing hackathon on DoraHacks. Come build the future of infrastructure finance with us!
Come Build With Us!
Are you building in the iFi space? We are actively looking for builders and projects to take part in an upcoming iFi whitepaper. Contact us at hello@althea.net.
- Discord: Join our community
- Learn More about how Althea works: website, docs
- Participate as a validator
- Launch an Althea network: Hawk Networks
