There has been a lot of buzz around the DeFi space in the past few years. Many projects have been built on different blockchains addressing diverse problems and attempting to resolve the issues surrounding legacy financial systems.
However, many of these projects have been built on the Ethereum blockchain. This was to be expected because the blockchain offered more incentives for people to build. As the DeFi craze skyrocketed, the problem of scalability began to emerge. High gas fees and congestion on the Ethereum network rendered the Ethereum blockchain nearly unusable, forcing developers to consider other Blockchains.
DeFi has continued to offer users high-grade security, censorship-resistant transactions and privacy. Other popular Blockchains like the Binance Smart Chain, Polygon, Fantom currently have dApps being built on them while they leverage the merits of DeFi. The total value locked (TVL) in DeFi has grown tremendously since more blockchains got involved.
Notwithstanding Bitcoin's pioneer status and dominance of the Crypto market, it has been largely ignored in the DeFi discourse. BTC’s market dominance currently stands at 46.9% at the time of writing. This beats the likes of Ethereum, Solana and BNB by a wide margin. Most dApps have excluded the Bitcoin blockchain despite its Total Addressable Market (TAM) surpassing other blockchains and cryptocurrencies. The Portal Protocol, a Bitcoin-based DEX leveraging the benefits of the Bitcoin network, is a walk-alone DeFi project.
Decentralization and DeFi
Centralized Finance has proven to be insecure for the average user. Issues such as censorships, breach of privacy, arbitrary banning of accounts, hacking and loss of funds are rampant in traditional finance. Decentralized Finance solves these problems by offering the opposite of legacy systems and ensuring faster speed of transactions.
The major merit is disintermediation, as customary with cryptocurrency. Users of DeFi are moving away from financial middlemen, and also from centralized cryptocurrency exchanges that have become gatekeepers, such as Binance, Bitfinex and Coinbase. Decentralized financial apps from Ethereum and other blockchains allow users to trade without being subject to identity checks, money-laundering regulation and other centralized alternative constraints.
DeFi has seen a lot of users as it continues to grow. A recent Dappradar analysis shows a 53.45% quarter-on-quarter increase of TVL across the industry in Q3 2021. In September, an average of 1.7 million per day were struck by the single active wallets (UAW) associated with every decentralized application. The average UAW is 1.54 million every quarter.
The DeFi ecosystem's rapid expansion is not without setbacks. Because of a combination of lack of understanding and diligent actors, various achievements and hacks have been achieved during the growing phase.
As a result, decentralized exchanges have developed into cross-chain bridges to help solve illiquidity and guarantee crypto stakers more yield.
Although the cross-chain bridges are unmistakable for scalability and connectivity, difficulties exists. For example, plasma and sharding, two of the most prominent Ethereum scaling methods, need parallel chain operation ('parachains') or 'shards.' While potentially groundbreaking, these ideas have a long time frame for application.
What is Portal?
Portal is a peer-to-peer layer above Bitcoin which allows genuine exchange on a truly decentralized platform. Portal unlocks Bitcoin's ability to decentralize finance from options trading to lending and borrowing.
Portal gives Bitcoin trust-minimization guarantees for the speed and liquidity of centralized platforms. Portal unleashes the potential of Bite Coin for the decentralization of finance from spot markets to options, p2p lending and borrowing, everything in chain, peer contracts and without custody or control from third parties.
In particular, Portal leverages "Hash time-controlled contracts" of Bitcoin to ensure that every user has full control over the funds provided in trades. It also helps alleviate the danger of cash loss and counterparty hazards.
Fabric is the underlying protocol Portal uses extends Bitcoin’s functionality today without needing any BIPs. Interoperable apps designed using Fabric enable fast integration of applications built on Fabric. With chain support, users can leverage the confidence reduction assurances of Bitcoin to access the speed and liquidity of centralized alternatives, making Fabric a "connective tissue" between blockchain systems. Atomic swap technology for Portal's layer 2 and layer 3 can be employed for data and computing general purpose market.
Portal is meant to encourage anonymous, individual third parties to conduct intermediate transactions between mutually reliable partners while ensuring safety. Under Portal, a third party cannot cheat out its assets if two parties collide. These stimuli serve to boot the network with an initial set of facilitators. As the Portal network develops, every node will be a user and facilitator at the same time, creating a complete, peer by peer, uncensored financial network.
Why is Portal Different?
Portal offers users 3 major advantages that gives it an edge over other DEXES.
- Facilitation: Network members are encouraged economically to help peers to increase their network connectivity to provide a low-cost, high-efficiency routing of liquidity. The network nodes are given a "round token," redeemed for a fraction of network fees by contributing their own resources (capital bonds, data storage, validation and even general purpose computing).
- Trustless: Portal contracts are self-sovereign; it means that your assets are only controlled by you. With the Bitcoin feature called "specific time-locked contracts" Portal assures that you retain control over commercially available financing, preventing counterparty risk and loss of funds.
- Fair Market Price: Traders pay a fair market price throughout the swap offer, which ensures that the counterpart is not given a "free choice" and that other nuclear swap methods pose a difficulty. All is a market in Portal, including aggregation in orders books.
Portal is DeFi built on Bitcoin. It makes DeFi unstoppable with anonymous, zero-knowledge swaps via the first true cross-chain DEX that’s genuinely trustless. It eliminates minting wrapped coins (ie wBTC, wETH) or risky staking with intermediaries. With Portal, DeFi becomes a service that anyone can provide, maintaining anonymity within open, transparent markets with a security model as robust as Bitcoin mining.