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EAGLE PROTOCOL’S SOLUTION TO PROBLEMS IN DEFI ECOSYSTEM.
✓ INTRODUCTION
What Is Decentralized Finance (DeFi)?
Decentralized finance (DeFi) is an rising monetary know-how primarily based on safe distributed ledgers much like these utilized by cryptocurrencies. DeFi eliminates the charges that banks and different monetary firms cost for utilizing their providers. People maintain cash in a safe digital pockets, can switch funds in minutes, and anybody with an web connection can use DeFi.
✓ Issues in Defi
DeFi solves lots of points, however that doesn’t imply it isn’t with out its issues. The next issues are related to DeFi;
1️⃣ Lack of Interoperability:
Presently, there aren’t any choices on the market for a permissionless, non-custodial, chain-agnostic cross-chain swap resolution through which customers are free to cross-chain swap or bridge any asset they need with the identical pockets.
2️⃣ Portfolio Defragmentation:
Liquidity aggregation is likely one of the hottest subjects within the house as TVL (Complete Worth Locked) during the last two years elevated by over 100 instances. Whereas that is nice, the issue is that it’s fragmented with liquidity unfold throughout ten chains after which lots of of exchanges inside these chains. This results in capital inefficiency and better prices to customers, in each fuel and time, with no quick and environment friendly solution to bridge and cross-chain swap their belongings.
At first of Could 2022, 55% of TVL was on Ethereum, with that 45% remaining being unfold principally between about ten chains, however roughly 60 extra have tens of hundreds of thousands in liquidity. This causes fairly the fracture between blockchains and exchanges for customers to search out what they need, rapidly, and for an excellent value. It even turns into a difficulty throughout the similar chain , liquidity unfold throughout ten and even fifty exchanges, creating a necessity for customers to make use of bridges, liquidity, and DEX aggregators to search out the token and value they need. Bridges are most frequently not sufficient of an answer by themselves as after utilizing a bridge, customers want a DEX or DEX aggregator to finish the swap as bridges are restricted to stablecoins and native currencies, whereas Eagle protocol isn’t.
There are too many bridges to be educated on, every with their very own distinctive person interface, limitations, system to be taught, and time to bridge. Some apps (DEXs) or liquidity aggregators hyperlink to seven or extra bridges, every for a distinct chain, that customers would want to be taught, navigate, use, and presumably want a brand new pockets for. These apps enable deposits from a single chain solely, forcing customers to depart the app to bridge their funds, having to do lots of laborious work, paying lots of fuel charges, all simply to have the ability to use the earlier app (DEX). With a purpose to buy belongings on the brand new chain, customers want that chain’s native token, ex. ETH, in an effort to full any swaps on the vacation spot chain, that means customers must first buy and bridge the native token and commerce it for the token they need, including one other layer of complexity to the method.
3️⃣ Lack of safety:
One other main problem in DeFi is that of Bridge safety. By utilizing bridges, customers are entrusting their tokens with the safety of the bridge, not with the ability to preserve them in their very own wallets. This has been the reason for many exploits which have value customers over $1 billion {dollars} USD within the final yr alone.
✓ EAGLE PROTOCOL’S SOLUTION
Eagle protocol helps resolve this downside by not truly bridging belongings or locking customers belongings in a wise contract to burn or mint tokens.
The best and easiest solution to describe Eagle Protocol is that it facilitates cross-chain swaps with out bridging. Eagle protocol accomplishes this by sending messages utilizing the generic messaging layer on bridges to provoke and execute a swap throughout chains. Quite than requiring customers to lock or burn tokens after which mint them on the vacation spot chain, Eagle protocol makes use of single-asset liquidity swimming pools and the eagle protocol liquidity aggregation protocol, each deployed on all the hottest chains, to provoke swaps for the specified token. This leads to customers receiving their tokens in a short time, for a lot much less fuel, and never being restricted to swapping stablecoins or the chain’s native fuel token.
There are 4 steps to the method:
1). Customers choose their pair and chain of selection.
2). They provoke the swap on their residence chain right into a Eagle liquidity pool.
3). Eagle protocol makes use of the bridges to ship a swap instruction message to a relayer on the vacation spot chain; there isn’t a bonding or minting of belongings to or from the bridge.
4). The relayer, after confirming the message, sends the chosen asset to the person’s pockets on the vacation spot chain.
With this straightforward modern steps, Eagle protocol has introduced a brand new part to web3.
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