Decentralized finance has seen a massive growth over the past year as the total value locked in DeFi protocols climbed to over $270 billion. It has become one of the most crucial aspects propelling blockchain and cryptocurrency adoption to the masses. However, DeFi platforms currently remain siloed within the boundaries of the very blockchains they are built on. The same is true for P2E games, metaverses, and everything built on blockchains. That’s because blockchains, by nature, are not meant to interoperate with other blockchains or with any other system outside their own.
Blockchain Interoperability is the Future
Web3, cryptocurrencies, and DeFi aim to use blockchain technology to build an internet of value that can be used as the foundational layer for unlocking new business models. The aim is to decentralize the power structure of the internet by giving both users and developers maximum control in shaping how the network achieves its objectives.
To make this a reality, we need to create a framework for blockchains to communicate. Termed as “cross-chain compatibility,” this enables the exchange of economic value and information between various blockchain networks.
With this, DeFi users will be able to find more avenues and strategies to put their cryptocurrency and NFT assets to work. DeFi applications will be able to have access to a larger community of users from day one and find product-market fit much faster.
On that note, bringing cross-chain compatibility for DeFi forms the core motive for Clover Finance, a Polkadot-based blockchain platform focused on building an ecosystem of solutions for making blockchains interoperable.
Cross-Chain Compatibility: A Foundational Innovation
Cross-chain compatibility will enhance the potential economic use cases for multiple DeFi protocols to collaborate with each other and broaden the reach irrespective of what blockchains they’re based on.
Enabling that is Clover, a platform whose smart contract allows developers to build and deploy cross-chain DeFi protocols. Additionally, developers also have the option to migrate their existing decentralized applications on Ethereum to Clover’s cross-chain layer, with minimal development time and effort. This is because Clover has built both Ethereum Virtual Machine (EVM) and WebAssembly (WASM) compatible infrastructure that utilizes SPV chain simulation technology to create the lightest and fastest DeFi cross-chain infrastructure. Developers will also be able to utilize an identity-based user classification module to provide users a personalized experience in Clover’s DeFi ecosystem.
Apart from keeping developers’ interests in mind, Clover finance redesigned the networking layer to allow users to seamlessly transact their tokens without depending on the blockchain’s base currency for paying transaction fees. This significantly simplifies the onboarding process for new DeFi users, who otherwise would have had to first buy the base currency of the blockchain in order to start interacting with DeFi applications.
Further, Clover Finance allows users to interact with cryptocurrencies and NFT assets from a range of chains, including Ethereum, Polkadot, Solana, Binance Smart Chain, Fantom, Avalanche, Kusama, Edgeware, and others. By providing a single, easy-to-use cross-chain compatible DeFi portal that is fully accessible through Clover’s own DeFi wallet, Clover is able to serve new DeFi users with a valuable product proposition.