DeFi is supposed to be the great recalibrator of finance. It is supposed to offer people a better alternative to traditional centralized financial instruments and services. Lately, we have all seen how centralized services can lead to catastrophic losses for users due to a lack of transparency.
However, at present, using DeFi protocols can be extremely time-consuming, confusing, and inefficient. Many problems in space can be traced back to how they have evolved. There are currently many networks, each with their own ecosystems and platforms they are integrated with. While this has led to innovation as individual chains compete for space in a crowded market, it has also stalled growth and made life difficult for the end user.
ZetaChain, a decentralized blockchain network, has taken a different approach by creating the first omnichain smart contract platform. The opportunities provided by such a network — DEXs that can switch from any chain to any other initially, DAOs that are not tied to one network — could well lead to a more unified and efficient era in DeFi. Their community has grown significantly over the past few months and the future they are building seems to resonate with many. We were able to speak with the ZetaChain team about their project and the expected impact on the industry.
When did the ZetaChain project first appear?
The team gathered during 2021. Cryptocurrency has been and still is in a state where users either take on additional risk using crypto, such as working through a centralized exchange or dubious bridges, or overcoming many obstacles to complete even simple tasks. ZetaChain took shape as a concerted attempt to address these issues and provide a new, sane, secure, and enjoyable default standard so that more users can use and benefit from cryptocurrencies.
What problem did you notice in DeFi that needed to be fixed?
When users join the crypto ecosystem through a particular dApp, this fragmentation creates a huge hurdle for the user to seamlessly implement or try the dApp on another chain. Several projects emphasize interoperability, but most interoperability systems only apply to specific blockchains, force and require significant protocol integration work, or are one-time bridges that may have questionable security architectures.
How can your network natively work with blockchains that don’t work with smart contracts?
Our implementation of TSS (Threshold Signature Scheme) allows ZetaChain to store assets on external blockchains that may not have adequate smart contract capabilities such as Bitcoin and Dogecoin. This feature allows smart contracts in ZetaChain to manage assets such as bitcoin in a similar way to any other tokens on any chain. This capability is very similar to Ethereum, where a smart contract can manage assets according to predefined logic. The difference is that ZetaChain omnikey smart contracts can manage assets from anywhere, not just assets on the same chain. In this way, you can effectively use Bitcoin smart contracts or smart contracts that manage many different assets at the same time on different networks.
What benefits will omnichain technology bring to end users?
Users will have fewer barriers to using crypto, wherever and whenever. With omnichain, we will be able to build applications that abstract networks for many use cases, such as using any wallet and interacting with any application, anywhere. There will be decentralized, true alternatives to things like CEX where you can trade any asset for any other asset. In general, as an end user, you will get a better and more convenient UX, more freedom to do what you want in the entire ecosystem, less risk and minimal fees.
Will ZetaChain create its own platforms or will it be up to network users?
In addition to creating the most basic protocol, ZetaChain aims to create very useful products and core features that help users interact with the network. It will also create tools to help demonstrate universal dapps built on top of ZetaChain by developers and partners.
Of course developers have the ability to create whatever they want on ZetaChain: new protocols/platforms, new businesses and new public goods. The ZetaChain team is very close to the community and contributes a lot to the creation and planning of new features. The team also provides resources such as technical assistance to developers and partners to build better and faster.
How did ZetaChain attract so many users during the beta stage?
In everything ZetaChain launches, we are committed to providing users with real, useful products that they can play, learn and interact with. ZetaLabs has been an important launch for us where the community can contribute to ZetaChain by testing native cross-chain asset transactions and inviting people to do the same. At any given time, hundreds of people are tweeting about ZetaLabs and ZetaChain. Our growth to date is mainly due to people resonating with the real underlying issues we see in crypto as well as the real product to get an idea of what the future could be.
What do you think is the biggest problem DeFi is facing right now?
I think the biggest problem with DeFi right now is the lack of convenient, transparent, smart, risk-minimized and smart options, especially when running on many blockchain networks. People tend to go for the simplest solutions, and the simplest solution in many verticals is now often the centralized or risky solution. Also, the lack of good defaults leads to a huge problem of liquidity, identity, and data fragmentation.
If DeFi is going to live up to its promise, then truly decentralized solutions need to compete with centralized ones in terms of UX and features, and minimize risk with strong underlying security. ZetaChain is working to provide a multipurpose network by default so that more developers can create these experiences for more users.
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