DeFi, which is full of speculation and serious homogenization
On the Ethereum Layer 2 network Arbitrum, a mining project called Arbinyan was launched, and this mining project supported most of the TVL on Arbitrum. Obviously, it was attracted people attention by APY, which further generated FOMO sentiment. The infrastructure for the expansion of Ethereum is too speculative. Through Arbinyan, we can see that the current status of DeFi is still based on speculation.
The DeFi ecosystem dominated by Ethereum has been highly developed since 2020. In addition to the old DEX, lending, etc., it also further refines many sectors, such as synthetic assets, insurance, aggregators, and algorithmic stablecoins, however, from the perspective of these agreements themselves, the homogenization of track members is serious. The high APY attracts investors to participate, further forming a DeFi speculative ecosystem dominated by "digging and selling".
The inherent blockchain-based characteristics of DeFi itself, such as openness and transparency, have further restricted the development of DeFi. It is difficult for defi to integrate with traditional finance.
The gradually marginalized Bitcoin network
Bitcoin, as the leading asset in the cryptocurrency sector, has built a strong consensus and a very strong value foundation. Although the bitcoin network itself has poor carrying capacity,but the bitcoin network based on POW has a better security than other systems.
As the first blockchain system, the Bitcoin network does not support smart contracts, and Layer1 itself is not scalable and has poor interoperability, which also makes the Bitcoin ecosystem itself more closed. The well-known "Lightning Network" movement in the industry has progressed very slowly technically, and RSK, which is the side chain of the Bitcoin network, is also making some attempts on DeFi, but it itself has not caused any waves.
Obviously, the Bitcoin network itself has not played a leading role in the current construction of DeFi and has gradually been marginalized. Bitcoin assets are only wrapped to DeFi chains just like in Ethereum in the form of cross-chain bridges, and are combined with assets such as WBTC, HBTC, etc., to flow on different chains, and then become liquid assets in DeFi. Synthetic assets themselves are not real bitcoin assets, but users' trust in the issuer to further recognize the value of the synthetic assets to equivalent bitcoin, while the centralized storage of actual assets itself has certain risks. Similarly, for the Bitcoin network ecology, functional expansion is the top priority for application, and this is one of the main issues.
However, referring to the expansion plan of Ethereum Layer2, in fact, the Bitcoin network is still expected to use Layer2 as the basis for expansion, to achieve ecological scalability and interoperability, and rebuild a financial ecology that can match Web3.0.
DeFi protocol Portal built on the Fabric platform and around Bitcoin Layer1
From the perspective of the industry, it is recognized that Ethereum is worthy of the labels of "World Computer" and "Web3.0", and the mention of Layer 2 basically revolves around Ethereum. However, based on the Fabric platform, the DeFi protocol Portal built around the Bitcoin network is expected to further build a Web3.0 foundation for the Bitcoin ecosystem.
Fabric itself is an open source application platform for the anti-censorship layer built on Bitcoin. We can think of it as a Layer 2 infrastructure built around the Bitcoin network. It inherits Fabric’s censorship resistance, high efficiency, credibility, definancialization, and cross-chain interoperability. At the same time, Portal also inherits the security of Bitcoin Layer 1.
The data itself is not stored on the chain, traders can selectively disclose their own information instead of all transaction information being disclosed on the chain. Therefore, the Fabric system itself is anti-censorship, which provides a foundation for future commercial entities to build traditional businesses. Any business entity that builds a business based on Portal will also be able to selectively anonymize or disclose business information and further expanding DeFi in terms of functionality.
The current DeFi allows anyone to participate in the form of an account, but the user's authority is limited to the use of these infrastructures such as smart contracts, and the user can only passively use it in accordance with the procedures set by the agreement itself. Fabric allows users to use the Bitcoin blockchain as a "trust anchor" to develop their own peer-to-peer applications, which means that users can set their own smart contract programs with a low threshold, customized for specific businesses and preferences . Furthermore, it is possible to make smart contracts completely private and non-chain execution possible.
Based on the above characteristics, Portal's contract also represents autonomy, which means that only users can control their own assets, instead of the traditional DEX, the funds may be stored in a public smart contract pool. Applications built with Fabric are highly interoperable and can be quickly integrated between applications. With cross-chain support, through the trust of Bitcoin, the speed and liquidity of centralized alternatives can be further obtained, making Fabric a "connection organization" between blockchains. Therefore, Portal itself, based on Fabric, allows secure cross-chain exchanges, and there is no need to interact with other ecosystems in the form of "synthetic assets". Portal, as the first DEX on Fabric, will allow any asset to be traded with Bitcoin, further breaking the shortcomings of the linkage between the Bitcoin ecosystem and other ecosystems. In terms of efficiency, Fabric has a higher confirmation speed and lower transaction gas. Portal has also constructed an order book model, which aggregates liquidity in the trader network by homogenizing and matching orders in transactions, using a zero-knowledge system and proof of order book execution.
Compared with Uniswap and other AMM DEX, which only target a single ecology and do not have cross-chain interoperability, Portal is more suitable for constructing more complex, traditional financial services, such as loans, derivatives, etc.
From the perspective of the Bitcoin system itself, as the earliest blockchain ecology, it has built the strongest consensus and value barriers. Even with the further development of other ecology, the Bitcoin network is still the leader of the cryptocurrency sector. Portal itself uses the Bitcoin network as the foundation of Layer1. Compared with other DeFi protocols, Portal has a very solid value support.