Decentralized finance is also known as DeFi for short, DeFi may completely change the way we see traditional financial services. DeFi is a movement that aims at making a new financial system that is open to everyone. Through DeFi many of the traditional centralized financial services that we have grown accustomed to, are available in a completely trustless, transparent, and efficient manner that does not require a central intermediary.
In the past, we have always used centralized finance. While traditional financial transactions are controlled by middlemen, decentralized finance frees the system from these institutions’ constraints. With drastically lower costs decentralized finance has great investment potential and its total value has grown. Decentralized Finance represents the alternative to traditional financial services.
There are no banks instead there are pieces of code that run and act as a bank. They are open to anyone. They do not require you to trust them because they are a piece of code. If you wanted to, you could read through them and verify that it is not going to scam you. There is also censorship resistance and cheaper than traditional centralized finance.
Decentralized finance represents an aspect of the crypto sphere which centralizes peer-to-peer (P2P) transactions and digital finance. It taps into the advantages of smart contracts and the efficiency and power of digital contracts that live on the blockchain, to provide platforms for lending, borrowing, trading, saving, and earning interest that do not require all of the usual bureaucracy and paperwork.
A major challenge faced by blockchain technology is an issue of interdependence and interoperability of blockchains; it had become tough for asset exchange to be complete between different blockchains. Thus, different blockchain main nets could not leverage the advantages or benefits of another blockchain. For this to be mitigated, it has become necessary to introduce the concept of cross-chain technology. Through cross-chain technology, transactions between blockchain main nets take place securely.
The central focus of our post today is on the decentralized nature of these cross chain transactions. What do we mean by decentralization?
To answer that, imagine when you were in a controlled monitored situation where everything you ever want to do had to be vetted, observed, and accessed by someone else other than you. That is what decentralization is NOT.
Decentralization is not a new concept. It has roots in different parlance and now in technology.
The rapid emergence and growth of blockchain technology have created a huge number of decentralized applications and platforms. However, the majority of these networks are operating in a separate environment, which limits the scalability and connectivity of the networks.
Due to the limited connectivity of blockchain networks, the current state of the blockchain industry is characterized by the lack of trust between its various members. Researchers and developers are now focusing on developing a strategy to improve the interoperability of blockchain platforms.
Interoperability is a process that enables various blockchain networks to communicate with each other, which significantly increases the connectivity of the networks. Many researchers, creators and developers are working on developing a cross-chain communication solution that can solve these issues.
Advancements in blockchain technology keep getting better with time and applications. The blockchain technology industry is experiencing a revolution of developments and community engagements. Interoperability of blockchains has been understood to make it easy for blockchain main nets to communicate with each other without interferences from third parties. This has led to the concept known as Inter Blockchain Interactions.
In recent times, the development of blockchain technology has been introduced to different sectors of the economy, especially the financial sector. This has introduced a crypto economy. This technology was further developed and taken to the next level where a decentralized and trustless ecosystem is created to remove the involvement of third-party authorities in transactions. This development was made possible due to the appearance of a smart contract.
Blockchain-enabled smart contracts hold a lot of advantages and this article seeks to discuss everything about connecting smart contract-enabled blockchains. Ethereum is the world’s first smart contract platform, which remains the most popular choice among developers to this day. The challenges relating to the scalability problems of Ethereum gave its competitors a window of opportunity to secure a market share in the world of smart contract platforms, and they are here to stay. Smart contracts were made popular by the rise of bitcoin and blockchain technology but some were of the opinion that it had been around for a while.
What then are smart contracts?
Smart contracts are like contracts in the real world. The only difference is that they are digital. It is a computer program that is stored inside a blockchain.
Due to the independence between blockchains, it is tough for asset exchange to be complete between different blockchains. This implied that different blockchain main nets could not leverage the advantages or benefits of another blockchain. The different blockchain main nets are unable to communicate with each other. For this challenge to be combated, the concept of cross chain technology as well as multi cross chain technology was developed. This concept led to concepts like cross-chain transactions and blockchain interoperability.
From this point, different blockchain main nets could interact with each other and exchanges could be made on them. Digital assets and tokens could be exchanged between the blockchain main nets in a decentralized ecosystem and without centralized authorities. This encouraged trust and data immutability.
ClassZZ blockchain main net presents to you a platform that ensures cross-chain transactions. ClassZZ is an excellent example of a blockchain project trying to explore cross-chain transactions. The aim is to make it possible for individuals to exchange native tokens and digital assets freely across different blockchains. The individual who makes the transaction to send out an asset to a particular must have the asset under his ownership before initiating the transaction. This forms the foundation of ClassZZ cross-chain transactions.
By using the Te Waka protocol that supports cross-chain transactions, ClassZZ is able to support message and transaction transmission between chains to ensure a free flow of communication. The Te Waka protocol is designed and presented as the first decentralized cross chain protocol for native tokens.
We have discussed in detail the ClassZZ main net and the protocol it uses, as well as the advantage of the main net built to achieve unbounded scalability. In discussing tokens, we understood that the ClassZZ main net facilitates the transfers and transactions of native tokens. This is what will be referred to in this discussion.
It is imperative to understand that token transactions are done online via a blockchain network. For the ClassZZ main net, we understood previously that the main net can ensure transactions and exchanges with native tokens under a decentralized and permissionless platform. ClassZZ makes use of the Te Waka protocol which is the world’s first decentralized cross-chain protocol for native tokens and is been proposed as the industry norm for cross-chain transactions.
The blockchain space as we know it has entered into a multi-chain era. A major advantage of blockchain technology is that it enables multi-token transactions. The compatibility between blockchains makes it easy for tokens to be transferred with ease across various blockchains. This recap is necessary for further discussions today.
We will look at tokens and the $CZZ Token.
Different blockchains exist around the world with each of them having its role, mechanism, and transaction methods. They, however, find it difficult to share data between themselves. Taking some steps back, it would be beneficial to recap a little on the essence of blockchain technology.
A blockchain is a sequential time-sensitive stream of data that is verifiable by a consensus of computers called nodes that make up its network. Each data record is called a block which is linked to each other and secured using cryptography. Cryptography ensures each new data record is unique and not tampered with.
Each coin has its blockchain like Bitcoin and Ethereum. What each blockchain network does is ensure that each transaction is secure and unique. Challenges come up with the exchange of currencies from one blockchain network to another making the process difficult and incurring extra charges when trying to convert assets from, for example, Ethereum for bitcoin. This process is not only tedious but also time-consuming and costly.
The cost of transactions and the time it takes to finish a single transaction, which goes up to several seconds in some blockchains itemizes some of the challenges facing blockchains. The complexity of this process increases when a transaction is made from one blockchain to another.
Vitalik Buterin recently wrote an article on Ethresear.ch on the idea of a cross roll-up dex, that would allow users to exchange tokens between two roll-ups in a decentralized manner. The purpose of this article is, in essence, a brief report on the progress we have made at the Class ZZ (CZZ) community on this topic.
Over the past two years, we have developed a decentralized cross chain transaction protocol called Te Waka. Te Waka is a kind of canoe that early Polynesian settlers used to travel between otherwise islands of the archipelago. This is very similar to the current state of the blockchain space.
Te Waka protocol has been running since April 2021, there’s already a fully developed application called czzswap that allow users to trade native tokens between Ethereum, BSC and Heco. Connect metamask wallet to your browser, and you can start swapping at https://classzz.com/swap. The same protocol would also enable users to engage in cross rollup transactions in an efficient and decentralized manner. Specifically, it will not require any intermediary, nor will it require any slow process to run on L1.
Cryptocurrency is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Unlike the exchange of physical money in the reality of our world, cryptocurrency transfers exist purely as digital entries to an online database describing specific transactions. In the transfer of cryptocurrency, the transactions are recorded in a public ledger. Cryptocurrencies are generally not issued by any central authority; they are decentralized networks based on blockchain technology. This decentralized structure allows them to exist outside the control of governments and central authorities. They enable secure online payments without the use of third-party intermediaries, they are a virtual currency that uses cryptography for security and because of this, it is difficult to counterfeit because of this security feature.
Cryptocurrencies operate on a blockchain that records all transactions updated and held by currency holders. Mining is a process through which units o cryptocurrencies are created, it is a distributed consensus system that is used to confirm pending transactions by including them in the blockchain. It enforces a chronological order in the blockchain, protects the neutrality of the network, and allows different computers to agree on the state of the system. To be confirmed, transactions must be packed in a block that fits very strict cryptographic rules that will be verified by the network. They can be stored and spent using cryptographic wallets.
Blockchain has become one of the most frequently discussed technologies for its ability to allow for peer-to-peer transactions without a centralized intermediary or a third party. It is no longer secret that blockchain technology has the potential to revolutionize the world. Already, its use and application has extended beyond to areas involving finance, identity management, governance, asset management and many more.
Blockchain is a potentially disruptive technology that can be used to advance many fields like cryptocurrencies, supply chains, and the industrial Internet of Things. The next-generation blockchain ecosystem is expected to consist of various homogeneous and heterogeneous distributed ledgers. These ledger systems will inevitably require a certain level of proper cooperation of multiple blockchains to enrich advanced functionalities and enhance interoperable capabilities for future applications. The interoperability among blockchains will revolutionize current blockchain design principles.
The development of cross-blockchain applications involves much complexity regarding the variety of underlying cross-blockchain communication. The way to effectively enable interoperability across multiple blockchains is thus essential and expected to confront various unprecedented challenges.
We had previously discussed what blockchain interoperability is. Networks can communicate across different blockchain platforms. It is the ability to share information, data and metadata across blockchain networks while keeping state and uniqueness consistent. The basis by which blockchains would communicate is hinged upon their compatibility.