Why Oddz Chose to Build on Multiple Blockchains?
Built on Ethereum, Binance Smart Chain, Polygon (Matic Network) & Polkadot
TL;DR: The boom of DeFi in 2020 started bringing a lot of attention to the blockchain space. As the total value locked in DeFi rose from less than a billion dollars to $80 billion in a span of 12 months, there has been an increase in demand for more interoperability among different blockchain networks. Almost all popular DeFi protocols are built on Ethereum and so is Oddz Finance but that has its pros and cons. Some of the most common disadvantages of using any DeFi protocol on Ethereum is the scalability problem and the problem of interoperability. Users pay a lot of gas fee whenever the network is more congested. Sometimes, the transactions also take a very long time to get executed.
Building Oddz Finance on Ethereum, Binance Smart Chain, Polygon (Matic Network) and Polkadot will help users to easily communicate with different blockchain networks and also exchange value at ease. Users will be able to quickly trade different contracts on Oddz without paying any gas fees, thanks to our partnership with Biconomy! Moreover, our integration with different blockchain networks will give users multiple blockchain networks to choose from, based on their needs.
Ethereum’s DeFi Evolution, Its Advantages and Disadvantages
Ethereum is the first public, open-source blockchain-based peer to peer networking software that was developed to allow developers to build and deploy decentralized applications (dApps) using smart contracts.
While Bitcoin is the first cryptocurrency that was created, it is Ethereum that helped in unleashing the power of blockchain technology. People can now write smart contracts on the Ethereum network to perform various tasks ranging from making monthly payments to the landlord to making complex calculations and doing tasks on the blockchain. It has redefined the internet that we know.
We can build dApps, create complex smart contracts and build tokens on the Ethereum Network. The developer community of Ethereum is the largest in the world, and that makes it easier for more developers to join and grow the community. Anything that you want to compute on Ethereum can be done very easily. This is because the Ethereum network is a Turing complete blockchain. This means that Ethereum has the capability to understand and implement any future agreement, even those that have not been thought of yet.
Unlike Bitcoin and few other blockchain networks, Ethereum has a better transactions per second (TPS) rate which will further improve once the transition from Ethereum to Ethereum 2.0 takes place. The consensus mechanism will then change from Proof of Work (PoW) to Proof of Stake (PoS), thus reducing the energy consumed in the creation of new blocks and also ensuring that the nodes staking their ETH tokens get the rewards which will be in proportion to their contribution to the network.
Lastly, protocols on the Ethereum network can interact with one another. We have seen this trend going stronger during recent times where tokens from one protocol can be used on other protocols built on Ethereum to get better returns and also for arbitrage purpose.
Despite all the advantages mentioned above, one of the challenges associated with the Ethereum network is the transaction speed associated with it. Due to the rising popularity of DeFi and yield farming, network congestion has increased significantly. While a simple transaction on Ethereum Network could cost you around $5, any moderate to complex transaction could anywhere be between $50 to $100 or more. More gas fees are also associated with more pending transactions on the blockchain.
As seen in the image below, the Ethereum average gas price has been rising ever since the DeFi craze that began in summer 2020. Paying high transaction fees can become uneconomical for many traders who want to start with small amounts of money.
Developers who want to develop dApps on Ethereum need to code in a new language called Solidity. Since it is a new programming language, smart contracts are bound to have vulnerabilities that are sometimes difficult to identify. This has led to major hacks in the past.
There has already been an increased demand for blockchain networks that will allow developers to enhance their connection between different blockchains. The biggest problem related to the Ethereum network is its lack of interoperability.
The challenges of high transaction or gas fees on the Ethereum network, network congestion and slow transaction speed and the lack of interoperability between different networks has been an issue for some time now. This scalability problem on Ethereum has led many people to start exploring different blockchain networks. Some other blockchain networks include Polkadot, Binance Smart Chain and more.
Oddz Finance aims to change the way people see DeFi. We want to remove the barrier of restricting people to one blockchain network, be it Ethereum, Polkadot, Binance Smart Chain or Polygon (Previously Matic Network). We want traders to come and trade with even small quantities while bearing almost negligible gas fees. Why wait for longer durations when you can easily get your trades executed within a matter of seconds?
Below are some of the key reasons we chose to build Oddz Finance on Polkadot and Binance Smart Chain and integrate with a layer 2 solution like Polygon.
The Advantages of Building on Binance Smart Chain
The Binance Smart Chain (BSC) is a new smart contract-enabled blockchain that acts as a parallel chain to the Binance Chain. The drawbacks on Ethereum’s network led to the creation of BSC — an Ethereum Virtual Machine (EVM) compatible blockchain that could provide developers with the ability to seamlessly deploy dApps built for Ethereum on Binance’s new blockchain.
BSC was launched after the sudden rise in popularity of DeFi in 2020. The Ethereum network has been suffering from the scalability bottleneck for quite some time. BSC addressed that problem by giving one of the fastest blockchain transaction times and lowest fee structures for DeFi protocols. This made it more logical and appealing to the developers as well.
Adding to the above advantages of building on BSC, it is also possible for users to enjoy the flexibility of transferring assets from one blockchain to another as Binance Smart Chain is built with a dual chain architecture. To conclude, BSC is also interoperable, thus simplifying the process of transferring assets from one blockchain to another.
The Advantages of Integrating with Polygon
As mentioned in our integration blog, the integration with Polygon will allow options traders on Oddz Finance to execute contracts in a simple and secured manner. Due to the high throughput on Polygon’s network, users will be able to buy call and put options by leveraging Polygon’s high-speeds.
We have chosen Polygon because it is highly scalable, has a high throughput of up to 7,000 TPS on a single sidechain and provides users with a better user interface and experience. Lastly, Polygon is a very secure network, thus making sure that the funds are safe.
The Advantages of Building on Polkadot
Polkadot is a blockchain network that allows the transfer of arbitrary data and not just tokens across different blockchains. It unites a network of heterogeneous blockchains called parachains and parathreads while also connecting with external networks via bridges. In short, the Polkadot network is truly interoperable, helping transfer data across public, open, permissionless blockchains as well as private, permissioned blockchains.
The backend development on Polkadot is done using Rust (C++ like) and Substrate Framework, another common language that has become popular in recent times. At the time of writing, smart contracts on the Ethereum network can be called synchronously but this will get upgraded to a better version on Ethereum 2.0. Smart contracts can then call each other synchronously in the same shard, or asynchronously between shards. Meanwhile, Polkadot already has features that allow smart contracts to call each other synchronously in the same parachain, or asynchronously across parachains.
Finally, Polkadot provides more scalability by spreading transactions across multiple parallel blockchains. Another interesting feature of Polkadot is its data availability and validity scheme which allows chains to interact with each other in a meaningful way. Chains remain independent in their governance but united in their security.
As mentioned above, Oddz Finance wants to make DeFi accessible to everyone. We do not want people to wait for longer periods of time to get one of their transactions executed. Instead, we want to give them the best possible experience in DeFi.
Building Oddz Finance on Ethereum, Polkadot and Binance Smart Chain ensures that users can keep their funds as ERC20 tokens or change them to BEP20 tokens (in case of BSC) by going on Oddz Finance’s bridge. Developing the platform on different blockchains will give users a variety of blockchain networks to choose from based on their requirements.
Finally, we do not believe that the users should pay such a huge amount of money as gas fees and to protect them from such adversaries, we have partnered with relayers like Biconomy, which will ensure that the gas fees are almost negligible on the platform.