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To answer the question of why Radix, we first need to understand what is DeFi (Decentralized Finance). DeFi is a general term for financial products and services that are available online to anyone with an internet connection without the need of using a traditional financial institution, like a bank. DeFi is a much better, faster, and cheaper solution to using the banking system we have today.
Unlike with a bank, with DeFi you have full custody of your money. For example, you could directly send money to anyone, invest, lend or borrow money, even earn high-yield interest on savings - all without having to go through a traditional bank. Your transactions are processed online within seconds, instead of days, and recorded on a public distributed ledger (or blockchain) at a fraction of the cost than with banks. Find out more about why DeFi is the future of payments here.
This is all made possible by using what are called "smart contracts". Smart contracts are agreements that are governed in the form of computer code (which cannot be altered) and they interact directly with a public distributed ledger (or blockchain). These smart contracts can be written to handle almost any imaginable type of transaction between two parties.
The key feature of a smart contract is that it provides "trustless" execution, meaning you do not need to put your trust into a third-party like a bank, lawyer, or escrow company to broker the deal. You do not even need to trust that the other party will make good on their end of the deal. The smart contract will only execute if both sides of the agreement are held up. This is the magic of DeFi!
Right now on Ethereum (currently the most popular smart contract blockchain) smart contract developers have to spend the majority of their time making sure there are no costly bugs in their smart contract code. This is because the Ethereum smart contract programming language called Solidity was designed for general use and not developed specifically for DeFi in mind. As a result, billions of dollars have been stolen through smart contract exploits and it is easy to see why.
Look how complicated it is to for a developer to program a smart contract without making a coding mistake using Solidity. Here is an example of one of the most popular DeFi apps on Ethereum called Uniswap where the smart contract just performs the simple task of swapping two tokens on Ethereum:
Radix, on the other hand has developed a much smarter contract programming language called Scrypto which has been specifically built to serve DeFi. Scrypto is an asset-oriented language that allows developers to build quickly with a much lower risk of exploits or hacks from insecure code. This is thanks to the Radix Engine which can stop insecure code from running by using the same type of finite state machine logic found in mission critical systems, like traffic lights.
Ever think to yourself while driving when you see a green light ahead, "How can I trust that the cross traffic at the intersection has a red light?"
In the intersection's traffic light system there are a set number of states programmed; one of which is when your traffic light is green the cross traffic light is red. Then after some time the state of your light changes to red and the cross traffic light is green. Since there is never a state when both traffic lights at the intersection are green at the same time you can feel much safer driving through the intersection.
By Radix applying the same style of finite state machine logic to smart contracts through the Radix Engine it should prevent any unintended state outcomes from occurring giving more peace of mind to smart contract developers. Now here is the same Uniswap example, but imagine it being programmed using Scrypto and how easy this smart contract would be to make on Radix:
Scrypto also allows developers to build components quickly through the use of a catalog of existing component blueprints created by other developers that can be easily assembled together like "money lego bricks". This not only makes building easier, but also provides a revenue stream for developers through the Radix Developer Royalties System whenever components or blueprints they create are used in a transaction.
The future of DeFi will require the ability for smart contracts to be able to communicate instantly with each other in order to compose complex transactions (like booking a plane flight, hotel room, and rental car all at once). No one wants to be stuck with a booked hotel room and a rental car if they cannot also successfully book their plane flight. Either the entire transaction across all of the smart contracts being composed must be valid and accepted all at once, or the entire transaction must be allowed to safely fail all at once. This is known as atomic composability and is necessary for complex transactions to work in DeFi.
Ethereum is atomically composable in its current state but with mass adoption will not be able to scale to support the amount of transactions per second that the future of DeFi will require. So Ethereum, as part of their Ethereum 2.0 upgrade plan, has decided to shard (split into pieces) their blockchain in order to be able to scale. Sharding, is basically breaking a single blockchain into multiple smaller parallel blockchains in order to scale by distributing the transaction processing load. As a result of sharding, these new separated blockchains can no longer communicate instantly with each other, breaking atomic composability.
Layer 2 protocols (roll-ups) and sidechains that were deployed to help alleviate the scaling issues facing Ethereum currently also have the same composability issue since they perform the majority of transactions completely within themselves and only interact with Ethereum as little as possible.
Likewise, other next generation layer 1 protocols like Polkadot, Avalanche, Near, and Cosmos have also been designed using sharded blockchains and fall victim to the same atomic composability problem as Ethereum 2.0.
Both layer 2 protocols and these next generation layer 1 protocols all make the same shortsighted mistake of disregarding the needs of DeFi for scalability. Atomic composability across all shards must be maintained in order to fulfill the full potential of DeFi.
Only Radix has been built specifically built from the ground up for DeFi to deliver scalability without breaking atomic composability. Using its consensus mechanism called "Cerberus", Radix can linearly scale to almost an unlimited amount of shards while maintaining cross-shard atomic composability!
Please watch this quick video below about Cerberus to learn about how Radix solves the blockchain scaling problem facing DeFi.
https://www.radixstake.com/uploads/b/136804025-566672514272144062/radixescaperoomrev_285.mp4
To learn more about how Radix is designed to scale: https://www.radixdlt.com/post/how-radix-engine-is-designed-to-scale-dapps
The future looks bright for Radix and the global adoption of DeFi. The traditional financial (TradFi) market currently has a total value locked (TVL) of around $400 trillion. Right now DeFi has only about $241 billion TVL. $241 billion sounds like a lot, but it is still over 1650 times smaller than TradFi today.
This is just the beginning for DeFi, its growth potential is huge, and Radix will be the foundation to support it. To learn more, I recommend reading the Radix DeFi White Paper or visiting the Radix website at https://www.radixdlt.com.
Sources and More Informations:
To answer the question of why Radix, we first need to understand what is DeFi (Decentralized Finance). DeFi is a general term for financial products and services that are available online to anyone with an internet connection without the need of using a traditional financial institution, like a bank. DeFi is a much better, faster, and cheaper solution to using the banking system we have today.
Unlike with a bank, with DeFi you have full custody of your money. For example, you could directly send money to anyone, invest, lend or borrow money, even earn high-yield interest on savings - all without having to go through a traditional bank. Your transactions are processed online within seconds, instead of days, and recorded on a public distributed ledger (or blockchain) at a fraction of the cost than with banks. Find out more about why DeFi is the future of payments here.
This is all made possible by using what are called "smart contracts". Smart contracts are agreements that are governed in the form of computer code (which cannot be altered) and they interact directly with a public distributed ledger (or blockchain). These smart contracts can be written to handle almost any imaginable type of transaction between two parties.
The key feature of a smart contract is that it provides "trustless" execution, meaning you do not need to put your trust into a third-party like a bank, lawyer, or escrow company to broker the deal. You do not even need to trust that the other party will make good on their end of the deal. The smart contract will only execute if both sides of the agreement are held up. This is the magic of DeFi!
Right now on Ethereum (currently the most popular smart contract blockchain) smart contract developers have to spend the majority of their time making sure there are no costly bugs in their smart contract code. This is because the Ethereum smart contract programming language called Solidity was designed for general use and not developed specifically for DeFi in mind. As a result, billions of dollars have been stolen through smart contract exploits and it is easy to see why.
Look how complicated it is to for a developer to program a smart contract without making a coding mistake using Solidity. Here is an example of one of the most popular DeFi apps on Ethereum called Uniswap where the smart contract just performs the simple task of swapping two tokens on Ethereum:
Radix, on the other hand has developed a much smarter contract programming language called Scrypto which has been specifically built to serve DeFi. Scrypto is an asset-oriented language that allows developers to build quickly with a much lower risk of exploits or hacks from insecure code. This is thanks to the Radix Engine which can stop insecure code from running by using the same type of finite state machine logic found in mission critical systems, like traffic lights.
Ever think to yourself while driving when you see a green light ahead, "How can I trust that the cross traffic at the intersection has a red light?"
In the intersection's traffic light system there are a set number of states programmed; one of which is when your traffic light is green the cross traffic light is red. Then after some time the state of your light changes to red and the cross traffic light is green. Since there is never a state when both traffic lights at the intersection are green at the same time you can feel much safer driving through the intersection.
By Radix applying the same style of finite state machine logic to smart contracts through the Radix Engine it should prevent any unintended state outcomes from occurring giving more peace of mind to smart contract developers. Now here is the same Uniswap example, but imagine it being programmed using Scrypto and how easy this smart contract would be to make on Radix:
Scrypto also allows developers to build components quickly through the use of a catalog of existing component blueprints created by other developers that can be easily assembled together like "money lego bricks". This not only makes building easier, but also provides a revenue stream for developers through the Radix Developer Royalties System whenever components or blueprints they create are used in a transaction.
The future of DeFi will require the ability for smart contracts to be able to communicate instantly with each other in order to compose complex transactions (like booking a plane flight, hotel room, and rental car all at once). No one wants to be stuck with a booked hotel room and a rental car if they cannot also successfully book their plane flight. Either the entire transaction across all of the smart contracts being composed must be valid and accepted all at once, or the entire transaction must be allowed to safely fail all at once. This is known as atomic composability and is necessary for complex transactions to work in DeFi.
Ethereum is atomically composable in its current state but with mass adoption will not be able to scale to support the amount of transactions per second that the future of DeFi will require. So Ethereum, as part of their Ethereum 2.0 upgrade plan, has decided to shard (split into pieces) their blockchain in order to be able to scale. Sharding, is basically breaking a single blockchain into multiple smaller parallel blockchains in order to scale by distributing the transaction processing load. As a result of sharding, these new separated blockchains can no longer communicate instantly with each other, breaking atomic composability.
Layer 2 protocols (roll-ups) and sidechains that were deployed to help alleviate the scaling issues facing Ethereum currently also have the same composability issue since they perform the majority of transactions completely within themselves and only interact with Ethereum as little as possible.
Likewise, other next generation layer 1 protocols like Polkadot, Avalanche, Near, and Cosmos have also been designed using sharded blockchains and fall victim to the same atomic composability problem as Ethereum 2.0.
Both layer 2 protocols and these next generation layer 1 protocols all make the same shortsighted mistake of disregarding the needs of DeFi for scalability. Atomic composability across all shards must be maintained in order to fulfill the full potential of DeFi.
Only Radix has been built specifically built from the ground up for DeFi to deliver scalability without breaking atomic composability. Using its consensus mechanism called "Cerberus", Radix can linearly scale to almost an unlimited amount of shards while maintaining cross-shard atomic composability!
Please watch this quick video below about Cerberus to learn about how Radix solves the blockchain scaling problem facing DeFi.
https://www.radixstake.com/uploads/b/136804025-566672514272144062/radixescaperoomrev_285.mp4
To learn more about how Radix is designed to scale: https://www.radixdlt.com/post/how-radix-engine-is-designed-to-scale-dapps
The future looks bright for Radix and the global adoption of DeFi. The traditional financial (TradFi) market currently has a total value locked (TVL) of around $400 trillion. Right now DeFi has only about $241 billion TVL. $241 billion sounds like a lot, but it is still over 1650 times smaller than TradFi today.
This is just the beginning for DeFi, its growth potential is huge, and Radix will be the foundation to support it. To learn more, I recommend reading the Radix DeFi White Paper or visiting the Radix website at https://www.radixdlt.com.
Sources and More Informations:
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