Traditional finance doesn’t work, but nor does DeFi – here’s the solution


Microsoft Internet Explorer drove a global shift towards digitization, but without a successor, the internet wasn’t ready for true mass adoption - nor was DeFi until Radix.

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Traditional finance doesn’t work, but nor does DeFi – here’s the solution [Sponsored]

There is no better time than a bear market to reflect on Web 3.0. We’ve come so far since Satoshi’s whitepaper, and yet, still have so far to go.

During the bull run that followed 2020’s DeFi Summer and continued into November 2021, DeFi went from a minuscule subsection of crypto to a $200 billion behemoth. Many people made a lot of money, and it looked like we would be ‘up-only’ forever.

As we know all too well, though, nothing lasts forever.

Radix: The Layer-1 Built For DeFi

Since November 2021, a bear market has wreaked havoc on DeFi and our wallets. Without the distraction of free money, we’ve had no choice but to look into the mirror and try to figure out where DeFi can be improved.

With reflection, we see that Ethereum is still not scalable, and even though layer-2 rollups help, they add another layer of complexity for regular users. Alternative layer-1s are a little too ‘smoke and mirrors’, experience outages more than my ‘98 dial-up, or simply not built for scalability. AppChains are a cool invention but like an archipelago, each AppChain “island” cannot be easily composed with another. As a result, they are heavily reliant on bridges which on their own account for half of all DeFi hacks. Hacks and exploits continue to plague the industry, with a record $718 million stolen in October alone.

What DeFi needs is a truly scalable and safe layer-1 network. A layer-1 ready to service all of the world’s financial needs. A layer-1 that consumers feel comfortable using and developers want to build on. A layer-1, that word on the proverbial street suggests, might have already arrived.

Introducing Radix – the radically different solution creating a genuine opportunity for DeFi to scale securely, for good. To put it simply, this layer-1’s Cerberus consensus mechanism and Scrypto smart contract language are revolutionary.

Stop by RadFi 2022 on December 8 to find out exactly how Radix will change DeFi for the better.

But for now, let’s take a look at why Radix will be so radically different.

Infinite Scalability: Is It Really Possible?

When you think of a scalable blockchain, you probably think about Solana. With an average of 2,000 transactions per second (TPS) and a theoretical maximum of 710,000 TPS, Solana has arguably improved the scalability issue.

That said, it pales in comparison to Radix’s, which will eventually be, *gasps*, unlimited. Like the internet itself, throughput on Radix will increase linearly with each additional validator node added to the network.

The key is Radix’s unique Cerberus consensus mechanism. Developed over the span of 9 years, the final iteration of Cerberus will unlock unlimited linear scalability by improving on a familiar DeFi process, sharding, but in an entirely novel way.

Sharding is a technique that breaks up large amounts of data into smaller chunks, splitting up the network “horizontally”, so that different groups of computers each look after their own shard. It’s a lot more scalable to process 1/50th of the transactions across 50 groups of computers, than all of the transactions across just one group of computers.

Cerberus takes sharding and puts it on steroids. How many steroids? Well, let’s look at it by comparing Ethereum and Radix.

Ethereum, in its final form, will have 64 shards, or 2 ^ 6. Radix, under its “Xi’an” release, will have 2 ^ 256 shards. To put that into perspective that’s about as many atoms as there are in the universe.

But sharding on its own doesn’t give you linear scalability. You need a way for the shards to communicate with one another. The technical term for this is cross-shard atomic composability. Effectively what this means is that two or more separate validator sets – one set for each shard – can come to consensus on a transaction if they need to. If they agree, then the transaction is committed to all shards simultaneously. If one part fails or any shard disagrees, then the whole thing fails safely, and nothing is written to any shard. The transaction has been “composed” across shards “atomically” (it’s all or nothing).

This may sound quite technical but in reality atomic composability is absolutely necessary if DeFi is to thrive. You need this all or nothing capability to allow for arbitrage across multiple DEXs. You need it if you want to snap multiple dApps together for complex transactions, like a flash loan. Composability is to software as compounding interest is to finance. And all other sharding solutions break atomic composability across shards (like those AppChains we mentioned earlier).

Put it all together, and you have a consensus mechanism that will give Radix unlimited scalability and composability, two of the most essential qualities for a layer-1 network and a vital feature if DeFi is ever to become mainstream.

A revolutionary consensus mechanism fit for a revolutionary network.

Scrypto: The Intuitive Smart Contract Language That DeFi needs

Most of us average Joes don’t think too much about what’s happening behind the scenes. All we see and care about is whether or not the network or dApp is a) working and b) able to make us a little profit.

But the picture is much, much bigger than this. Smart contract languages are crucial to DeFi but are currently one of its weakest links.

Solidity has several key areas that are in crucial need of improvement. Probably one of the more notable would be its barrier to learning. While a basic dApp in Solidity can be made in a day, if you want one that is actually secure, it takes years to learn. And even then, some of the most experienced developers still get hacked. This drives many would-be developers away, which is far from ideal for the future growth of DeFi.

Second, and more importantly, is the unnecessary bloat required to develop dApps. Solidity developers have to build all the logic for tokens in their smart contracts, which are repeated for each new token introduced. The result is lines and lines of duplicated code, which increases the risk of a devastating hack.

Solidity is hard to learn, hard to work with, and as a result makes dApps vulnerable to hacks and exploits. DeFi needs better. It needs Scrypto, Radix’s native smart contract language.

The beauty of Scrypto is that it’s asset-oriented. Developers don’t need to waste their time writing mountains of code for each token. Instead, Scrypto provides built-in tools to simplify the process. These tools can take automated market-makers from 750+ lines of code in Solidity down to 100-200 lines of code in Scrypto. Fewer lines of code equal fewer possibilities of an error, which means a lower chance of hacks and exploits.

Couple this with the fact that Scrypto is based on Rust, a much more developer-friendly language than Solidity, and you have a smart contract language ready for the big leagues.

The Radix Revelation: DeFi’s Road To Success

It is without question that DeFi is destined for greatness.

The need for a financial system that is permissionless and trustless is great, and it’s only growing larger as lack of transparency and financial irresponsibility among centralized organizations increases.

Unfortunately, DeFi has so far been unprepared to take on this burden. Ethereum is great but it’s not scalable to the extent that is needed for mass adoption. Alternative layer-1s have a host of issues, and rollups, AppChains, and bridges are far too complex for new entrants. To put it bluntly, nothing in DeFi is secure enough to safely handle trillions of dollars – yet.

Radix was built as a solution to these issues. The infinite linear scalability offered by Cerberus will be capable of handling anything thrown its way, while Scrypto will enable developers to spend more time building instead of wasting time on mountains of code. Once Radix completes its roadmap, it will be tough for any other layer-1 network to compete.

With an engaged and vibrant community of developers continuing to grow, and a range of new, innovative dApps & solutions already popping up in the space, it’s becoming blindingly clear for a lot of us that the answer DeFi has been searching for is here.

There’s a radically better way to drive the future of finance, and it starts with Radix.

Get your free ticket to stop by RadFi 2022 on December 8 and see for yourself.