Blockchains are disrupting traditional financial institutions such as banks, credit unions & OTCs etc. by introducing new technological innovations such as decentralized public ledgers, tamper-proof record keeping and self sustaining community driven economies.
DeFi is one of the core pillars of this economy enabling “Decentralized Finance” which enables anonymous private, peer-to-peer smart contract enabled financial transactions. All of this is enabled via technology making centralized intermediaries redundant. The current standard for decentralization in projects is the eventual transition to DAOs such as Uniswap, DASH, Aave etc.
DeFi has taken crypto by storm and captured over 58 billion dollar total value locked (TVL) on just the Ethereum blockchain in less than 1 year. Despite this rapid growth, DeFi is still in its infancy, with many solutions and lots of problems!
Take Ethereum DeFi for example. Congested network traffic and bottlenecked speed during peak hours. But outrageous $300 gas fees during price dips and massive volume sell-offs are just one of many issues. Another one are wallet tracking services that can track a user’s entire history, wallet data down to the very first transaction. In fact, Blockchain analytics and monitoring has made privacy and confidentiality one of the core issues faced in the blockchain enabled DeFi.
In trading for example, extracting transaction metadata has become a vital trading strategy called frontrunning. The tech logic is, all transactions’ metadata is publicly broadcasted on the blockchain, even before confirmation. All “unconfirmed” transactions are queued in a mempool, awaiting confirmation, on the basis of the highest gas fee. Users can copy another user’s trade and execute it faster by allocating a higher gas fee.
The problem at the core is that blockchain transaction metadata is publicly available in real-time. Analytics platforms like Chainalysis or The Graph etc. can read and analyze any transaction almost instantaneously. Analytics has led to addresses belonging to notable personalities like Elon Musk of Tesla, Vitalik Buterin of Ethereum and Dallas Cowboy Shark Mark Cubani’s Wallet being publicly labelled and tracked on popular whale analytics platforms, that track large transactions such as big sell-offs or buy-ins.
Confidential DeFi is coming
With all these challenges and issues aforementioned, a truly private and confidential blockchain is needed; and Beam is providing this solution.
Beam is a layer one true confidentiality & privacy-by-default blockchain based on suite of privacy centric technology protocols such as mimblewimble, Lelantus and Dandelion, which completely conceals the value and metadata of transactions, while still retaining and enabling blockchain’s vision of becoming a true public tamper-proof decentralized digital economy.
BeamX is the DeFi layer situated on the Beam blockchain allowing for privacy-by-default and true confidentiality in DeFi, masking key metadata such as transaction time, amount, token type etc.
Addresses are not stored on the Beam blockchain. No information about the sender or the receiver is stored.
Beam roadmap comes with improvements to a growing privacy & confidentiality centric DeFi ecosystem. Big changes have gone live in 2021 and many features are still on the way. From Smart Contracts to DAPPs to Oracles, Bridges Stablecoin, to partnerships with AMM-based DEX & NFT. Beam sets forward an ambitious roadmap paving the way for a truly private & confidential DeFi ecosystem.