Building Bridges: The Role of DeFi Protocols in Mass Adoption
October 2, 2023
Since the advent of Bitcoin nearly fifteen years ago, the crypto movement has grown to include many elements beyond simply sending, receiving, and mining coins. There has been much excitement around some of these new properties in recent years. Millions of users were swept up in the NFT boom of 2021. Millions more were perhaps disappointed by the unfulfilled promise of life in the metaverse. Innovative ideas continue to emerge today: supply chain verification, digital identities, gaming, telecomm, and more. These technologies are certainly moving the space forward and driving significant activity in the cryptoverse. However, no single aspect of crypto tech has as much potential to change the world as Decentralized Finance.
DeFi sets itself apart from other areas of innovation in that the traditional monetary system is both a fundamental pillar of society and extremely broken. The opportunity to change the way people use and access money has much broader implications than changing the way they buy and sell houses or verify ownership of a digital image. This is especially true in the face of severe inequality, rampant abuse of power, and protectionism that excludes and oppresses literally billions of people. Thus, development in the DeFi space presents the Ergo community with its best opportunity to make a lasting impact on the world and realize the vision set forth in The Ergo Manifesto.
As a leader in blockchain design and development, Ergo is well positioned to provide fair, transparent, and decentralized financial tools to people across the world. This mission begins with financial inclusion. The historical and technological barriers to entry are being removed through the development of easily accessible and permissionless financial tools. Ergo’s DeFi ecosystem makes transacting, saving, investing, and trading available to anyone with an internet connection. Technologies such as NiPoPoWs and Autolykos ensure that nothing more than consumer hardware is needed to operate with the highest security available in the space. An over-the-counter graphics card is all that is needed to mine. Nothing more than a modest android device is required to run a full node.
It is only through this uncompromising commitment to decentralization that an open and fair blockchain network can emerge. Ergo’s ethic of transparency creates an environment in which users no longer have to trust each other to safely interact with the blockchain. Many dApps across the ecosystem share this value and foster a culture of open source development. This dramatically reduces both the technological and counterparty risk users face when storing and exchanging value online. By enabling secure and private P2P interactions in this open and decentralized network, Ergo has the ability to deliver true financial sovereignty to everyone. No more unnecessary middle men or censures. No more sacrificing ownership and independence for convenience.
Ergo’s DeFi ecosystem is here. The cornerstones are in place and further development is continuous. It is only a matter of time before activity on the chain begins to approach its true potential. There are currently many Ergo-centric versions of popular DeFi applications found across the crypto space, with many unique applications as well. SigUSD offers a proven algorithmic stablecoin. Spectrum Finance provides a truly decentralized trading experience, with LP and Farming opportunities for users to earn. Duckpools has launched a pooled lending application, allowing users to lend and borrow assets to earn interest, create leverage, short, or hedge against volatility. Sigmafi offers a unique P2P collateralized bond service, and Sigma’O creates an options market and decentralized orderbook. Ergopad has created a seamless launchpad for new projects to ICO, with whitelisting and vesting contracts to ensure a smooth experience for investors. There is even something for the DeFi Degens with HodlCoin, a simple, yet exciting, financial game in which users compete to see who can hodl their coins the longest. On top of all this, the ErgoMixer provides users an added layer of safety by ensuring that they can operate privately. This reduces the threat of others tracking activity to attack users digitally or physically, and furthers Ergo’s mission of enabling financial freedom to all.
There are, of course, many more applications currently in development that promise to bring additional opportunities and users into the ecosystem. Perhaps the most anticipated of these is the Rosen Bridge. This novel bridge infrastructure will enable users to transfer tokens between the Ergo and Cardano blockchains. While this is the first instance of the bridge, it can and will be used to connect many other blockchains. In fact, Rosen is capable of connecting any two chains that have multisig wallets, even if no tokens are being sent to or from the Ergo blockchain itself.
Another imminent release is the DexyGold protocol. This is a new stable coin design that will be pegged to the price of gold. Dexy differs from the SigUSD stablecoin in that it is not simply overcollateralized and incentivized with a reserve token, but operates with a single token being bought, sold, minted, and burned between two protocols. This protocol can and will be used to create additional stable coins, perhaps to include commodities such as oil, copper, or uranium. This protocol will make use of yet another new release, Oracle Pools v2. This next iteration has improved tokenomics to incentivize the creation and maintenance of more oracles, providing a more stable and resilient DeFi ecosystem.
A fourth application, and potential juggernaut in the ecosystem, is ZenGate Global. This project aims to provide micro, small, and medium sized businesses with the infrastructure required to tokenize their assets and leverage the benefits of blockchain technology. The first offering from ZenGate will be a commodity exchange, known as Palmyra. This will allow small farms to participate in the global market like never before, offering supply chain verification, product traceability, and funding opportunities like only crypto can.
All in all, the Ergo ecosystem is booming. The scope of everything being developed here is beyond what can be described in a single article. In fact, the number of new DeFi products has necessitated yet another tool to be developed, Crux Finance. This tool will enable users to track their crypto portfolio and interact with many of the Ergo DeFi applications all in one place. Look for Crux to release their first product at the start of the new year, and in the meantime, keep an eye on the Ergo Blog and explore Sigmaverse.io for exciting new announcements, developments, and opportunities in the Ergo ecosystem.