EAGLE PROTOCOL’S SOLUTION TO PROBLEMS IN DEFI ECOSYSTEM.
✓ INTRODUCTION
What Is Decentralized Finance (DeFi)?
Decentralized finance (DeFi) is an rising monetary expertise primarily based on safe distributed ledgers much like these utilized by cryptocurrencies. DeFi eliminates the charges that banks and different monetary corporations cost for utilizing their providers. People maintain cash in a safe digital pockets, can switch funds in minutes, and anybody with an web connection can use DeFi.
✓ Issues in Defi
DeFi solves a whole lot of points, however that doesn’t imply it isn’t with out its issues. The next issues are related to DeFi;
1️⃣ Lack of Interoperability:
At present, there aren’t any choices on the market for a permissionless, non-custodial, chain-agnostic cross-chain swap answer through which customers are free to cross-chain swap or bridge any asset they need with the identical pockets.
2️⃣ Portfolio Defragmentation:
Liquidity aggregation is likely one of the hottest matters within the area as TVL (Whole Worth Locked) during the last two years elevated by over 100 instances. Whereas that is nice, the issue is that it’s fragmented with liquidity unfold throughout ten chains after which a whole bunch of exchanges inside these chains. This results in capital inefficiency and better prices to customers, in each fuel and time, with no quick and environment friendly option to bridge and cross-chain swap their belongings.
At first of Might 2022, 55% of TVL was on Ethereum, with that 45% remaining being unfold largely between about ten chains, however roughly 60 extra have tens of tens of millions in liquidity. This causes fairly the fracture between blockchains and exchanges for customers to search out what they need, rapidly, and for an excellent worth. It even turns into a problem inside the similar chain , liquidity unfold throughout ten and even fifty exchanges, creating a necessity for customers to make use of bridges, liquidity, and DEX aggregators to search out the token and worth they need. Bridges are most frequently not sufficient of an answer by themselves as after utilizing a bridge, customers want a DEX or DEX aggregator to finish the swap as bridges are restricted to stablecoins and native currencies, whereas Eagle protocol shouldn’t be.
There are too many bridges to be educated on, every with their very own distinctive person interface, limitations, system to study, and time to bridge. Some apps (DEXs) or liquidity aggregators hyperlink to seven or extra bridges, every for a distinct chain, that customers would want to study, navigate, use, and presumably want a brand new pockets for. These apps permit deposits from a single chain solely, forcing customers to depart the app to bridge their funds, having to do a whole lot of onerous work, paying a whole lot of fuel charges, all simply to have the ability to use the earlier app (DEX). With a purpose to buy belongings on the brand new chain, customers want that chain’s native token, ex. ETH, with a purpose to full any swaps on the vacation spot chain, which means customers must first buy and bridge the native token and commerce it for the token they need, including one other layer of complexity to the method.
3️⃣ Lack of safety:
One other main problem in DeFi is that of Bridge safety. By utilizing bridges, customers are entrusting their tokens with the safety of the bridge, not with the ability to preserve them in their very own wallets. This has been the reason for many exploits which have value customers over $1 billion {dollars} USD within the final yr alone.
✓ EAGLE PROTOCOL’S SOLUTION
Eagle protocol helps resolve this downside by not truly bridging belongings or locking customers belongings in a sensible contract to burn or mint tokens.
The simplest and easiest option to describe Eagle Protocol is that it facilitates cross-chain swaps with out bridging. Eagle protocol accomplishes this by sending messages utilizing the generic messaging layer on bridges to provoke and execute a swap throughout chains. Moderately than requiring customers to lock or burn tokens after which mint them on the vacation spot chain, Eagle protocol makes use of single-asset liquidity swimming pools and the eagle protocol liquidity aggregation protocol, each deployed on the entire hottest chains, to provoke swaps for the specified token. This ends in customers receiving their tokens in a short time, for a lot much less fuel, and never being restricted to swapping stablecoins or the chain’s native fuel token.
There are 4 steps to the method:
1). Customers choose their pair and chain of selection.
2). They provoke the swap on their house chain right into a Eagle liquidity pool.
3). Eagle protocol makes use of the bridges to ship a swap instruction message to a relayer on the vacation spot chain; there is no such thing as a bonding or minting of belongings to or from the bridge.
4). The relayer, after confirming the message, sends the chosen asset to the person’s pockets on the vacation spot chain.
With this easy modern steps, Eagle protocol has introduced a brand new part to web3.
