DeFi Is Complicated. MANTRA DAO Aims to Fix That
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Dec. 10, 2020
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Like any discipline, DeFi is simple when you know how. Until then, it’s maddeningly confusing and intimidating. The further down the rabbit hole you dive, the more there is to learn about smart contract risk and impermanent loss and rebasing and all manner of arcane terms that describe real threats to your profitability. Even experienced DeFi users are prone to the occasional heart-in-mouth moment when staking assets into new yield farms and protocols. Because even when you know how to DeFi, you just don’t know what awaits inside the next platform promising to take your tokens and make them grow.

But what if it didn’t have to be that way? What if there was a way to experiment with DeFi – set up your first wallet; acquire your first crypto assets; stake your first tokens – without requiring 100 hours of podcasts, tutorials and Discord threads to get there? That’s the idea behind MANTRA DAO, the Polkadot-based project seeking to lower the barriers to decentralized finance onboarding. Together with other Polka projects pursuing interoperability, MANTRA is on a mission to make DeFi desirable to the masses. Here’s how.

The Dangers of DeFi

The "de" in DeFi stands for "decentralized," but to noobs it may as well stand for "deterrent." The big picture underpinning the movement is easy to define: open access to financial products and services that are interconnected and free for anyone to use. When it comes to the nitty-gritty of DeFi, however – staking, bonding, LP’ing, farming and all the rest – newcomers are out of their depth. Just try to explain and watch their eyes glaze over.

On Ethereum, the trend right now is for layering DeFi primitives on top of one another, to create new yield generation opportunities – and add new levels of complexity that heightens systemic risk. Over on Polkadot, however, developers are more focused on getting the fundamentals right. They have a chance to create a new DeFi ecosystem from scratch, and are armed with the knowledge of where Ethereum went wrong, and what can be done to make the user experience better.

MANTRA DAO isn’t the only project pursuing better UX and interoperability; the same description applies to many of the projects flying the flag for Polkadot. It is arguably the project pursuing the purest version of decentralized finance, however, in endeavoring to abstract complexity, leading to a more intuitive user experience that results in a more rewarding DeFi experience.

Onboard Them and They Will Come

At its heart, MANTRA DAO is a platform for staking blockchain assets. Built on RioDeFi’s Polkadot parachain, it is capable of supporting cross-chain swaps, lending and staking. The act of staking – locking a blockchain’s native asset into a smart contract, to earn more of the same token in return – is straightforward. The act of doing so, however, can be daunting for beginners, and time-consuming for more experienced heads, particularly when it comes to dealing with assets that exist on multiple chains.

With MANTRA DAO, assets from numerous chains cannot only be staked, but used as collateral, opening the door to an array of borrowing and lending applications. For DeFi novices, the appeal to using the platform is a combination of its user-friendly interface bolted to a highly scalable blockchain that supports fast and cheap transactions.

Crypto beginners may not understand the vagaries of blockchain architecture, but they know when an Ethereum transaction is taking ages, and balk at paying dollars in gas to send tokens between wallets. Polkadot doesn’t have that problem, and thus neither does MANTRA DAO. It has more to offer first-time DeFi users than being hosted on a more accommodating blockchain, though.

One Staking Platform to Rule Them All

The value proposition with MANTRA DAO is the ability to stake a range of assets including the native OM token and to receive rewards in the same cryptocurrency. All of which can be managed from a single interface. This simplifies the process of staking assets that reside on multiple blockchains, and provides a gateway for deeper immersion in the DeFi economy. Once users have gotten comfortable with staking, they can use their earned OM tokens to participate in governance, and to be further rewarded for doing so. They can also earn interest for lending their assets to other users, without relinquishing self-custody of their funds.

If Polkadot does become the new home of DeFi, it will be thanks to the efforts of the first wave of projects building upon it. Projects like RioChain, MANTRA DAO and Acala. Through recreating decentralized finance from the ground up, with a focus on eliminating pain points, Polkadot projects are forging a more forgiving environment when users can enter the world of DeFi. The first step – building – is well underway. Next on the agenda is convincing the masses to stop by and check out the new platforms and protocols that have been created for their pleasure and profit. The first target market will be existing DeFi users, most of whom are active on Ethereum. Then it will be time to look beyond the cryptosphere to the billions who have never created a crypto wallet, staked tokens or become their own bank.

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