How Portal is making wrapped tokens a thing of the past.
When a financial market grows remarkably, it also makes way for people to discover flaws and needs in the system. This has recently happened to the Decentralized Finance (DeFi) space, which has seen substantial growth in a short period but is still left with many areas that need to be optimized.
At Portal Finance, we are launching a DEX, which will solve and optimize a crucial part of DeFi trading — wrapped tokens. A wrapped token is essentially a token that represents a cryptocurrency from another blockchain. The wrapped token has the same value as the original cryptocurrency but can be used on non-native blockchains.
In practice, people can utilize their crypto assets on different blockchains. An example would be using the wrapped Bitcoin on the Ethereum blockchain.
While wrapped tokens have been a good way for people to cross-chain trade in DeFi, it hasn’t proven to be an optimal solution due to security risk as DeFi keeps growing and moving toward potential mainstream adoption.
The number of DeFi hacks has grown significantly in the last 12 months, amounting to $1.4 billion in losses. Most recently, DeFi Protocol Acala faced a 99% loss in its stablecoin after hackers issued 1.2B AUSD. Here is a list of some of the biggest DeFi hacks from the first quarters of 2022.
Harmony Bridge: $100M
Axie Infinity Ronin Bridge: $625M
DeFi has been screaming for a better way to cross-chain trading, and we believe we have the solution with our cross-chain DEX. Instead of wasting time and money with wrapped tokens, the Portal DEX will make the process cheaper, faster, user-friendly, and most importantly: keeps the custody of your keys, your coins, in your hands.
How is Portal solving wrapped token inefficiency?
So how can the Portal DEX solve wrapped token inefficiency and optimize other areas in the DeFi space?
First, the Bitcoin-built platform will make DeFi completely anonymous with its zero-knowledge swaps. The DEX eliminates the need for wrapped coins such as wBTC, wETH, and others. With our technology and user-friendly interface, Portal will become a service anyone can use and maintain anonymity.
Portal Layer 2 & 3: The heart of our technology
To dive deeper into the Portal technology, most of the magic happens through our Layer 2 and 3 techs, also known as Fabric. It is an open-source toolkit that helps launch censorship-resistant layers on top of the Bitcoin base layer.
The two Portal layers improve the foundation of the Bitcoin layer to make it safer by supporting a fully private and off-chain execution of smart contracts. Furthermore, Fabric brings asset issuance, P2P swaps, staking, liquidity, and other useful advantages when trading on the Portal DEX.
In short, Fabric is the heart and brain of Portal and the technology that ensures the technological advantages of using Portal over other exchanges, especially wrapped tokens. We believe that Portal, backed by Fabric technology, will be put in a position where it can truly deliver self-sovereignty for everyone.
As Portal continues to be built, it’s expected to branch out further and make trading in DeFi more optimal by the day. It shouldn’t be necessary to use wrapped tokens to do cross-chain trading, and that is what we are going to change.
The Portal project is a peer-to-peer, trust-minimized application running on top of Bitcoin. It allows users to access a decentralized network right from their wallets. In addition, users can now manage multiple blockchain assets and financial services from within their wallets. The project is backed by Coinbase Ventures, ArringtonXRP Capital, Republic Capital, Synapse Network, B21 Capital, and several other big names in the crypto and DeFi space.
With Portal, DeFi becomes a service that anyone can provide, maintaining anonymity for a competitive fee within open, transparent markets, with a security model as robust as Bitcoin mining. And because it is built on Fabric, it comes with privacy, speed, and security.
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