DeFi Going Multi Chain With Algorand
DeFi Going Multi Chain
The other day I talked about how the future of blockchains and how "Ethereum Killers" just aren't a thing anymore. The future of blockchain comes down to chains helping each other. No single blockchain is ever going to be able to do everything effectively and efficiently however combining blockchains that work together each doing something better than the other all fit into place when they have easy compatibility between them.
This brings us to DeFi, one of the biggest issues with DeFi at the moment is all (at least that I know of) work on a single blockchain and don't incorporate others. It's either Polygon, Ethereum or Binance for the most part right now.
While there are some attempts to close the gap between chains they often lack and are cumbersome making many transactions on the back end in order to convert the currency to another. This often times eats up more fees than what is needed with a more liquidity system with a single transaction via a swap.
C3 Protocol - Algorand
The Algorand is a new project which just recently locked in 3.6 million to make a cross-chain defi friendly for large investors.
While this only acts for large investors it will start to pave the way for smaller investors later on once the system becomes operational as innovation in the industry continues to evolve.
C3 will be building a cross chain clearing engine which will work in the same way that prime brokers act as a hub for collateral management. The first of these connections will of course be Algorand and Ethereum. Yep Ethereum even with the highest of fees still gets a very larger portion of the DeFi love.
There are three main verticals for Ethereum DeFi those being Lending, Borrowing, Perpetuals/DEXs. In almost all cases each of these are separated right now and all of them do not currently sit within one solid platform. This is an area that Algorand is looking to build and work with which will allow for more abilities to investors.
In general the system will work by locking collateral in one place and use it across many positions.
This ability to start tapping into many sources are the next evolution in blockchain/crypto I believe. If we want to embrace decentralization then we need to realize that these blockchains need to easily work with each other and not be the "killer" of another.
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