We live in a world completely driven by innovation and one of the best innovations this world has seen —blockchain technology— continues to push the boundaries of what is possible. Since its inception, the blockchain industry has produced impressive sub-industries within it. That in itself is one of the amazing things about living in a world where a technology like the blockchain exists. The ability to have technology upshoots from this umbrella industry.
Today, there is Decentralized Finance (DeFi) which has proven to be a significant means of alternative finance, there is the Metaverse, blockchain gaming, and more recently Artificial Intelligence (AI). In this article, we will explore how these cutting-edge technologies are being used to create unparalleled products and user experiences while revolutionizing the entire blockchain scene and the world at large.
In the last 3 years, adopting blockchain technology for businesses playing in the payments and exchanges, smart contracts, and digital identity has attained an impressive level of popularity. In the first half of 2022, this improved popularity brought with it an increase in investments by venture capitalists. For context, in 2021, the total inflow of capital in the blockchain industry was $30.5 billion. By July of the next year, 2022, that figure was surpassed, with a total inflow of $31.3 billion.
Made up of a network of data (ledger) that are decentralized and distributed, the blockchain has brought with it a shift from the traditional, centralized systems of carrying out financial transactions to an alternative peer-to-peer finance system that is backed by decentralized technologies. These technologies boast of platforms offering financial services like lending and borrowing platforms, financial instruments, and a vast network of protocols.
With a Total Value Locked (TVL) of $45.41 billion, DeFi has proven to be the sector in the blockchain industry with the most use cases for all (individuals and institutions alike).
Decentralized Exchanges (DEXs) in DeFi
Decentralized Exchanges are peer-to-peer marketplaces where users in a non-custodial manner can trade their cryptocurrencies without needing an intermediary to help with custody of the funds or facilitate the transfer of said funds. With DEXs, traditional intermediaries like banks, payment processors, brokers, etc are replaced with smart contracts that are blockchain-based and facilitate the exchange of assets.
One positive of DEXs is that compared to the traditional finance sector where transactions are opaque and coordinated by intermediaries who offer limited or no insight into their decisions and actions, DEXs provide the user with full transparency into the movement of their funds and the mechanisms that facilitate the exchange. DEXs also reduce the risk associated with transactions by stopping the passage of user funds through a third party's crypto wallet during trading. This decreases the centralization risks plaguing the cryptocurrency ecosystem.
Perpetual DEXs
Perpetual DEXs are blockchain-based cryptocurrency exchanges. They are decentralized, permissionless, and non-custodial. These exchanges use liquidity pools for liquidity, allow leveraged perpetual contract trading, and incorporate order book models. Just like how Bitcoin is used to democratize currencies, perpetual DEXs are used to democratize exchanges because:
They are transparent and accessible
Because these DEXs are built with smart contract codes on the blockchain, they are fully transparent and anyone can review the code at any time. As a result of being on the blockchain, all trades on the exchange are visible on the blockchain network. Perpetual DEXs also do not discriminate and anyone, anywhere in the world can access a perpetual DEX anonymously with a Web3 wallet and a VPN (if they are located in a country that is resistant to blockchain technology and cryptocurrencies).
They are secure
With perpetual DEXs, there are no centralized points of failure because they are distributed across the blockchain. As a result, unlike centralized exchanges, perpetual DEXs are protected from the risks of recklessness, fraud, and negligence. When using DEXs, the user always controls their funds as they alone retain their crypto keys.
At the core of decentralized finance lies perpetual DEXs that provide users with unmatched efficiency in executing transactions. A great example of a perpetual DEX is Rexbit. Rexbit Exchange is a platform where users can trade perpetual cryptocurrency futures with advanced orders, copy trading, and other features. Rexbit's on-chain order book is deployed on Polygon, Polygon zkEVM, and Arbitrum network. The asset prices on Rexbit use Chainlink data from dozens of exchanges and this helps to prevent manipulation.
Rexbit is a by-product of Zilto which offers users the security of decentralized services (DeFi), 100% centralized experience, and traditional finance (TradFi) services. Zilto helps the user switch between crypto and traditional finance with ease, puts a stop to the manipulation and theft of user funds on centralized exchanges (FTX a recent memory), and eases the difficulty with accessing DeFi due to poor user experience and technologies.
Tradable Utility Tokens in DeFi
The rise of DeFi has seen an increase in the number of multi-faceted utility tokens. These tokens are built on the blockchain which ensures their security and transparency, thereby ensuring the immutability of the token transactions, ultimately preventing fraud. Leveraging smart contract technology, these tokens enable various functionalities such as staking and governance.
An example of this token is the Mnl token. It is a tradable multi-faceted utility token that offers its community genuine DeFi experiences with its introduction of "real world" commercial enterprises with land-backed assets to the crypto space. Mnl provides its users with access to institutional-style involvement and interaction in a multi-trillion-dollar industry.
With utility tokens like Mnl providing transparency and robust security infrastructure, users can confidently participate in the ecosystem, knowing that their assets are protected.
Artificial Intelligence (AI) in DeFi
AI in its most basic form is based on the idea of building software that aims to replicate the human capabilities of learning and problem-solving skills. To build machines like this, there is the need for the provision of large volumes of data because this increases the insight and accuracy of inferences gotten from the data.
One of DeFi's advantages is its provision of large amounts of public data generated around financial transactions. This massive volume of financial data can be utilized to train, develop, and build intelligence models like arbitrage bots, which will assist users in maximizing gains on the movement of asset prices. DexCheck is an example of an AI tool in the DeFi space. DexCheck is a platform that seamlessly integrates advanced analytics, and cutting-edge AI-driven features with an intuitive interface, making complex insights accessible to everyone.
The DexCheck tool is designed to cater to a diverse audience, from experienced investors to first-time traders, by providing comprehensive analytics, market data, and trend forecasts across decentralized exchanges (DEX), cryptocurrencies, and NFT marketplaces. With DexCheck, users can make informed decisions, identify market trends, and mitigate risks effectively. The integration of AI technology in blockchain analytics is revolutionizing how users interact with the ecosystem, and it is making the industry accessible and user-friendly for all.
Cloud Computing in DeFi
Decentralized cloud computing is simply the decentralization of server capacity. What happens here is that rather than using a single server at one server center, datasets can be distributed across server centers that can be accessed at the same time by a large number of users from different parts of the world via the internet. Traditionally, Cloud computing is based on data centers rented out to consumers who access them via the Internet.
The use of cloud-based infrastructure has grown a lot and this has led to the creation of solutions to address some problems regarding infrastructure. Popular amongst these solutions is the usage of decentralized/peer-to-peer technology. Solutions like these are built on the blockchain networks of cloud service providers. In other words, using cryptography to protect the security of a network providing DeFi and cloud services.
An example of a platform like this is ToScale. ToScale is a multi-functional automated cloud platform used for digital asset management and professional trading on crypto exchanges in a single window. The platform allows users to securely store, manage and trade their digital assets in a decentralized manner while offering a full set of tools for professional traders, convenient monitoring, and the ability to offer users a passive increase in assets.
Play-to-learn-to-Earn Gaming in DeFi
Yea, I know you are wondering what this is. Worry not. This is simply the same play-to-earn gaming mechanic that you're used to but with a little tweak; learning. The Play-to-learn-to-Earn concept immerses users in a virtual world where they can learn about blockchain technology, trade virtual assets, and have fun doing these in an exciting and fun way while earning rewards at the same time.
This learning method combines gamification with education and valuable rewards which in turn results in the gaming platform it is built on engaging more users and strengthening the overall ecosystem. An example of a Play-to-earn-to-Earn gaming platform is Mogaland. Mogaland provides an immersive Play-to-earn-to-Earn metaverse game that helps users learn in a fun way.
Unlike other games, Mogaland uses real-world financial information to let you build real skills. And unlike trading platforms, they entertain and enable new ways of making money for the user.
Conclusion
As I try to conclude this article that has taken us on an exploration of the groundbreaking ecosystem that is DeFi, it becomes evident that different tools, technologies, and platforms contribute their fair share to the creation and provision of an unparalleled DeFi experience. By seamlessly combining security, transparency, and efficiency, the ecosystem empowers users to unlock the full potential of DeFi while looking forward to and venturing into new frontiers of innovation.
