But is DeFi really Decentralized?
At the moment, Blockchain networks, digital currencies, and some wallets are totally decentralized, but applications have not caught up yet. The most popular exchanges are centralized, and yes companies are creating Decentralized Exchanges (DEX’s), but they are still not the most prominent exchanges. For lending products, most are based on smart contracts, and the logic for the lending is decentralized, but you will always have to go through a centralized mediary, a company or a foundation, that owns the smart contracts and the application built on top of the smart contract. As we shift into this new era of DeFi, it is important to remember that although the logic is becoming decentralized, corporations will still have to exist to provide users with the applications that run on top.
What is OneLedger doing in this space?
For OneLedger, it is important to provide the tools required to generate new applications in DeFi. We have already built a Decentralized Proof of Stake protocol, which has the capability of sustaining itself. Staking in itself is a primary form of DeFi, it provides validators with the ability to lock their tokens and earns them interest on top.
Interoperability for DeFi
Interoperability is another tool that we have created. Our Lynx Engine provides developers with a way to extend our interoperability to multiple digital currency pairs. A DEX leverages those pairs to create swapping capabilities and move away from centralized exchanges. We are currently exploring partnerships, which will extend our network in this way.
Interoperability also enables our payments service, OL Pay. Based on our analysis, approximately 78% of all tokens are not being traded and are being saved, and we are providing them an avenue to spend digital currencies just like a legal tender. OL Pay has 3 components:
- Interoperability to move digital currencies on to our network, which is completed and functional within the OneWallet
- A payments widget for customer websites, which is being worked on
- Marketplaces that accept digital currencies, which is being worked on
Interoperability for FinTech is another major area where our solution helps current banks adopt Blockchain technology. Currently banks trade lending assets, and have attempted to research blockchain technology to manage these assets, but have failed at cross-bank lending. The blockchain networks are private and will always be private for these institutions, which means they require a way to intercommunicate across these institutions. We came across a use case like this with the National Australia Bank (NAB). NAB was trying to connect assets off their balance sheet with a Singapore based bank and was failing at this very use case. Interoperability is key in solving this problem, and bringing institutions like NAB into DeFi.
Asset Management for DeFi
The OneWallet is a fully decentralized custodial wallet for all your digital assets. Using the HD Wallet capabilities, we ensured that we were providing the community with a tool where the only security needed is their 24 word passphrase. We have really gone the extra mile to ensure all of your assets are persisted only on the Blockchain and can only be leveraged through your 24 word passphrase. This is very important as we start scaling our network. Our next phase of Dapps will be integrated all through the OneWallet. So although the application that you’re dealing with may be centralized, the assets and the custody of the assets will be fully decentralized and controlled by you.