Every day, the decentralised finance market grows and develops new and fascinating protocols. However, the niche faces the same issues that are preventing the entire crypto industry from advancing at breakneck pace.
DeFi sees its success as a result of its efforts to resolve concerns such as scalability, liquidity, and asset diversification. Fortunately, there are programmes with multimillion-dollar budgets in place to address these problems. RAI Finance, a decentralised cross-chain exchange growing on Polkadot at the same rate as the DeFi boom of 2020, is one of them.
In less than six months, RAI Finance transitioned from a Polkadot parachain to a DAO.
RAI Finance
RAI Finance is a decentralised cross-chain exchange that seeks to provide DeFi protocols with a diverse set of financial solutions. In the meantime, it's partnered with Polkadot, Chainlink, and Tidal Finance to provide liquidity to a growing number of distributed financial ecosystems.
RAI Finance, like many other DeFi ventures, aims to make digital asset creation simple and usable through a variety of protocols. By integrating its evolving framework with Polkadot's cross-chain technology, the protocol should be able to address some of DeFi's most pressing issues.
Liquidity is scarce.
Scalability is limited.
Diversification of available assets is dwindling.
Network fees are extremely high.
RAI Finance proposes the following solutions to these problems:
To boost off-chain transactions, the Zero-Knowledge Protocol/Proof (ZKP) is being implemented.
Via a parachain on Polkadot, the number of sponsored assets and their exchange across chains has increased.
The development of unique assets democratised trading strategies and yield generation tactics.
RAI Finance currently operates on a single sheet. The protocol, on the other hand, could boost asset swapping and automated business strategies in the future by adding layer 2 scalabilities. The DEX can also provide DeFi protocols with more liquidity and asset swapping options, thanks to the recent launch of its native token, RAI.
As previously said, RAI Finance isn't the only DeFi protocol attempting to address DeFi issues. This project, on the other hand, boasts a unique technological advantage. To put it another way, On the same platform, RAI Finance serves as an Automated Market Maker (AMM) and a Decentralized Exchange (DEX).
RAI Finance is part of the Polkadot ecosystem and runs on a parachain. After three years of testing, the group decided on an open-source sharding multichain protocol. Finally, Polkadot received the most support for its scalability and sustainability targets. Polkadot has also made some of the most exciting advancements in blockchain interoperability to date.
How RAI Finance works
RAI Finance seeks to eliminate all obstacles and restrictions that could restrict crypto users' complete freedom in decentralised finance. This lofty goal necessitates sophisticated computation and rapid architecture growth. As a result, DeFi's DEX offers a range of services that centralised exchange platforms cannot match, including:
Secure Off-chain Transactions
RAI Finance could improve scalability and ensure safe off-chain transactions by using Zero Knowledge Proof. This method would make it possible to perform trustless cryptographic computations. As a result, the quality of security for both public and private transactions will improve. Furthermore, since the majority of transactions would take place off-chain, each operation's cost and time would be greatly reduced.
Cross-chain Asset Support
Rai Finance, as a key component of the Polkadot ecosystem, will give users access to a diverse collection of assets and tokens. Users will use smart contracts to add specific assets and non-fungible tokens as the network expands (NFTs). As a result, in the long run, the protocol will be able to handle an ever-increasing number of properties.
RAI Token
RAI Finance is slowly evolving into a decentralised, self-contained entity (DAO). The release of the RAI token is a direct indication of this transformation.
RAI is an ERC-20 token that was released on January 13, 2021 by RAI Finance as part of a sale case. The event lasted just one minute and raised 647,666.93 USDT for the initiative.
RAI Finance currently has four applications:
Fees for Transactions
Any transaction is charged a small RAI fee by the protocol. The remainder of the transaction fees are split evenly among the other parties involved.
Creating Assets
When creating new assets or trading as part of their yield strategies, users must stake RAI.
Administration
When RAI Finance becomes a full DAO in the future, RAI holders will be able to vote on protocol functions and improvements.
Incentives for Networks
Participants on the RAI Finance network will be rewarded with RAI in the future when they provide liquidity to the protocol.
Final Thoughts
RAI has only been around for six months and is already making headlines in the DeFi industry. We see the project leaders launch new features and alliances almost every week. So, when we suggest that this protocol has a bright future, we're not joking.
RAI Finance has the attributes to develop quickly and easily into a powerful DeFi cross-chain exchange and DAO, thanks to powerful backing from Polkadot, Chainlink, and Alphabit.