Through decentralized finance (DeFi) platforms, the spread of financial services across the globe has increased significantly. More people now leverage these mini financial hubs for a lot of financial transactions.
Despite the significant inroads made by DeFi platforms, most aren’t free of challenges. To truly disrupt the financial world as claimed, these platforms have to meet the three-prong criteria: decentralization, security, and value. Navigating these criteria had been difficult for most DeFi.
Another gray area that hasn’t been handled right by most DeFi is the transaction speed. Most DeFi apps can’t match the transaction speed of the traditional financial institutions, which is a heavy blow for a technology that’s expected to shake up the sleeping sector.
How Does Nervos Benefit DeFi?
Most DeFi platforms have their problems inherent in the blockchain struggle: the digital LEDGER can’t seem to juggle speed, decentralization, and security at once. To rectify this challenge, the NervosNetwork was created.
Below are the ways Nervos gives DeFi platforms a fighting chance:
* Speed
Unlike what’s obtainable on the regular blockchain, the NervosNetwork is divided into two layers. Each layer has its distinct function. This sophisticated level of specialization ensures there’s an improvement in efficiency.
By having transactions in one layer, speed is given a significant boost. Due to this layered setup, the NervosNetwork blockchain is capable of rivaling the throughput of the biggest traditional finance institutions.
* Scalability
Different networks on the digital ledger are poorly equipped to handle the level of growth that has become quite necessary with DeFi.
The NervosNetwork, through its dual-layer arrangement, is set to check all the scalability targets required for DeFi platforms to thrive.
* Decentralization
While most DeFi platforms lay claim to decentralization, the tragedy of state could prove such claims null and void.
The current arrangement by the different networks gradually (over time) requires an increase in disk space as previous transaction history takes up more space.
Initially, the disk space consumed might be negligible, but it adds up over time, especially in the face of increasing adoption.
The result is a higher cost in adding more disk space which might not go down with most miners if they can’t find a solution. Of course, a small pool of miners running the show is no different from any centralized system, and this negates the purpose of the digital ledger in the first place.
The NervosNetwork through its dual-layer structure proffers a solution to this ticking time bomb.
By dedicating one layer to the storage of assets, the NervosNetwork reduces the amount of state data that goes into a local disk. This way, mass adoption can happen without DeFi apps worrying about the explosion of state data.
* Security
With hacks and exploitation becoming a norm among DeFi platforms, most are starting to consider running back to networks with some form of control for improved security.
If done, this goes against the reasoning behind decentralized finance applications.
One of the challenges bedeviling most networks hosting DeFi platforms is the dependence on the proof of stake (PoS) architecture. This creates loopholes for exploits while relinquishing power to a few.
The NervosNetwork approach entails using both the PoS and its more rugged sibling, proof of work (PoW) in different layers. The PoW ensures the security of assets as it’s specific to the Nervos Network's layer one.
With such a delineation of duty, DeFi platforms can enjoy both security and decentralization, squashing myths that both aren’t possible in any given system.
NervosNetwork Perfect for DeFi developers!
The NervosNetwork is devoted to providing DeFi developers with the enabling environment to create state-of-the-art applications that are head and shoulder above traditional finance institutions.
To actualize this vision, the NervosNetwork has separated its architecture into two layers. Layer one ensures developers are guaranteed a decentralized setup without a security risk.
With layer 1 holding all the assets, it’s no surprise that safety and decentralization have to be given priority. Layer two gives DeFi developers an edge over their colleagues in other networks as all the needed tools are within the reach.
Conclusion
NervosNetwork has first-hand knowledge of the blockchain. The network understands the struggles of DeFi platforms and their developers. So it’s great that they have built a network that eliminates most of the challenges facing the DeFi community. Most of those hacks, exploits, and slow transactions common with DeFi applications haven’t gone unnoticed. To reduce the likelihood of impermanent loss, at least to a negligible level, the NervosNetwork appears to hold all the aces.
Keep up to date Information about NervosNetwork by following their official websites below:
Website: https://www.nervos.org/
Twitter: https://twitter.com/NervosNetwork
Telegram: https://t.me/NervosNetwork
Discord: https://discord.gg/AqGTUE9
Community: https://talk.nervos.org/
You may connect with me on telegram via my telegram handle: @RitabeII
