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The Future of Cross-Chain DeFi

It’s been a while since we talked about cross-chain approach and its importance for the whole industry of decentralized finance. And it’s pretty clear since lately, we’ve been busy developing new Clusters and Impulses, integrating new chains, and improving the DeHive platform so that you can benefit fast and with less effort.

Yet, today, we’d like to take a little step back and speak about cross-chain approach in DeFi and its future in the industry. Shall we?

The Future of Cross-Chain DeFi

What is cross-chain?

First off, let’s deal with the general notion of cross-chain and find out where it might be applied.

Cross-chain is an approach that facilitates blockchain interoperability building a bridge between two different chains to exchange information and value. In other words, it helps two independent blockchains communicate with each other.

The most popular cases of cross-chain implementation are asset swaps and transfers, which are basically the essence of DeFi. However, a cross-chain can also work with supply chains and even private institutions in traditional finance.

cross-chain DeFi

Why do we need cross-chain approach?

When the first blockchains were created, they were designed as fully autonomous systems that already have everything to function properly and don’t need to interact with other chains. Yet, as the industry evolved and new blockchains emerged, their interoperability became a top priority.

A closed system isn’t practical and efficient, especially when it comes to scalability and fast development. That’s why cross-chains were designed.

Cross-chain platforms ensure proper communication between closed systems, enabling data exchange. They help users easily trade and swap tokens, run different blockchain applications, and feel more comfortable within one nearly limitless ecosystem.

Top cross-chain projects

The most popular cross-chain projects include Blocknet, Cosmos, Polkadot, and Wanchain. Each of these platforms focuses on different aspects of interoperability and offers different functionality.

Blocknet is a decentralized network that connects blockchains and allows developers to build applications with its components. The main Blocknet products are XRouter and XBridge. XRouter connects blockchain networks to multi-chain dApps, while XBridge connects previously siloed blockchain assets via cross-chain atomic swaps. Besides, the project offers a decentralized exchange and a wallet.

Cosmos apps and services connect using the Inter-Blockchain Communication protocol and work as an ecosystem around the Cosmos Hub, a dedicated blockchain. Cosmos Hub serves as a marketplace, a security provider, a router between chains and apps, and a custodian.

Polkadot enables cross-blockchain transfers of any type of data or asset, providing access to a wide variety of blockchains in the Polkadot network. The project has also created parachains — advanced layer-1 blockchains that overcome the limitations of older networks. Parachains create an ecosystem of independent networks that developers can fully control and optimize for any use case.

Wanchain focuses on connecting public and private blockchains and building a multi-blockchain financial superhub. This way, the project wants to resolve the issue of interoperability and connect all chains and assets into one network.

The first cross-chain asset manager for DeFi

Another essential application of cross-chain technology is asset and portfolio management.

DeHive is the first crypto asset manager that is designed to work cross-chain. The DeHive team has introduced the system of unique Clusters and keeps improving it every day. Clusters help unite crypto-assets of a particular chain into one index, thus, making the process of crypto trading easier and bringing higher profit on investments.

DeHive Clusters allow users to create a portfolio within different ecosystems and keep it well-balanced automatically. So, in other words, Cluster is a yield generating index similar to the ones in traditional finance in a way. Besides, the cluster lock mechanism helps generate more profit by yield farming, thus, strengthening the user portfolio.

DeHive cross-chain asset management system is user-centered and completely authentic. All we care about is for you to get higher profit with less effort.

Try DeHive and see for yourself!

🐝JOIN OUR HIVE🐝 on social media and stay tuned!

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Team DeHive

Team DeHive

An experienced team of blockchain enthusiasts behind the growth and development of DeHive DeFi protocol