What kind of public chain can promote the next wave of DeFi?
Decentralized finance (DeFi) aims to revolutionize the traditional finance sector by replacing legacy, centralized institutions with peer-to-peer networks. DeFi uses blockchain technology and cryptocurrency to build applications, from everyday banking, loans, and mortgages, to asset trading, stablecoins, crowdfunding, yield aggregators, no-loss lotteries, and insurance platforms.
The existing financial system is complex that involves intermediaries. The DeFi sector wants to overhaul this entire system and build a permissionless, open, trustless, and transparent one.
Over the past couple of years, the DeFi has grown immensely popular, with the total value locked in the ecosystem reaching past $220 billion. These new breeds of decentralized and automated dApps are working on stripping traditional intermediaries like banks.
DeFi, however, is not without risks such as operational security, external data, smart contract execution risk, and dependency on other protocols. But this fast-growing sector is still in its early stages and working on its issues.
Technically, Bitcoin was the first DeFi application that allowed anyone to own, control, and transfer value over a decentralized network. Building on that, Ethereum brought smart contracts, which are programs that run when predetermined conditions are met.
Ethereum scaled up DeFi, and today, the majority of the dApps are built on the world’s second-largest crypto blockchain. Thanks to Ethereum, crypto developers can do innovative things with crypto.
The explosion of DeFi on Ethereum led to the price of the crypto asset ETH hitting a new all-time high (ATH) at $4,880 in early November 2021.
Built Just for Real-world Applications
While Ethereum offers benefits like decentralization, immutability, reliability, security, and a robust community of developers and supporters, it also suffers from limitations in the form of scalability — high fees and slow speed, which limits the further development of DeFi.
Potential solutions to this problem include base-layer sharding and Layer 2 solutions. However, the latter comes with its own potential issues, such as liquidity, limited composability, and onboarding and offboarding friction.
As Ethereum developers try to find ways to make it more scalable, alternative platforms like the Top Network have entered the market to offer a faster and cheaper foundation.
The TOP public chain is a decentralized blockchain ecosystem composed of the public blockchain, dApps & decentralized communication. Our blockchain can play an essential role in advancing the development of DeFi thanks to its innovative three-layered ledger architecture consisting of the main chain, service chains, and off-chain ledgers that make it capable of handling the real-world business of any size and volume.
Built exclusively for Web 3.0, the Top Network is the world’s first full-state sharding public blockchain that uses applied technologies such as double-layer sharding, double-layer lattice, and DAG data structure-based parallel PBFT.
Implementing Ethereum-compatible shards of TOP mainnet will allow various dApps and assets on Ethereum to be migrated to the TOP public chain and enjoy its fast speed and low fees. Once it has been achieved, our team will introduce a cross-chain bridge between Ethereum-compatible shards and other chains like ETH, BSC, and HECO. TOP assets and stablecoins can then be freely traded between all the supported blockchains.
In the future, we will also migrate to the GAS mechanism of the Ethereum EIP-1559, which will destroy TOP tokens and reduce the supply.
Besides having a design made for real-world applications and onboard masses, Top Network has a friendly token economic model for both users and developers. TOP token holders can stake their coins either as miners or voters to vote miners and earn rewards.
In addition to DeFi, we are also planning a DEX, an NFT hosting platform, and GameFi products to attract the mainstream audience.
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