DeFi
The future will be shaped by autonomous smart contracts!
8:00 p.m. ▪ 4 min reading ▪ by La Rédaction C.
Innovative and revolutionary, Massa’s autonomous smart contracts open a new chapter in the history of decentralized finance. Based on unprecedented technology, these self-executing smart contracts enhance the decentralization, efficiency and complexity of DApps. But how can they affect DeFi?
Why are autonomous smart contracts the future of DeFi?
Growing rapidly in recent years, decentralized finance unfortunately still presents some weaknesses which slow down the adoption of DeFi platforms by professional traders and institutional clients. These weaknesses are of various natures.
They include the dependence of DeFi protocols on certain external entities for transaction execution or liquidity management. The limited functionality of DeFi platforms also represents another type of challenge that sometimes deters users from decentralized exchanges (DEXs). And this is precisely what differentiates centralized exchanges from decentralized exchanges.
Centralized exchanges, as the name suggests, have full control over all order books and matching engines. They are therefore better able to offer a wide variety of order types. They give traders access to more advanced functions, allowing them to better control their positions and better organize risk management.
However, if we understand the philosophy behind the creation of cryptocurrencies, centralization is not ideal. Furthermore, on centralized platforms, security risks (hacking attempts, insider trading, etc.) are significant.
Unfortunately, decentralized exchanges, which constitute the cornerstone of DeFi, do not allow exploring the full potential of decentralized finance. Although they facilitate token trading, the majority of current decentralized exchanges only support basic market orders. They cannot execute complex operations without the intervention of a third party or an external trigger. The reason? They are not autonomous.
Professional traders therefore do not find the trading functions adapted to their profile. And this is why autonomous smart contracts, responding to the challenges of current smart contracts, appear to be the future of decentralized finance.
How Autonomous Smart Contracts Are Revolutionizing DEX Business?
The advent of autonomous smart contracts ends limitations that dampen the trading experience on decentralized exchanges. More complex and capable of executing without manual intervention or intervention from an off-chain bot or centralized oracle, this new generation of smart contracts is revolutionizing the DEX. Thanks to them, DEX can offer:
- advanced trading functions (stop loss, take profit, limit order);
- autonomous liquidity management based on market conditions, which helps mitigate fleeting losses and optimize capital efficiency;
- autonomous adjustment of interest rates based on supply and demand;
- Automated collateral liquidations in the event of borrower default or under-collateralization, reducing the risk of bad debts emerging.
In short, Massa’s autonomous smart contracts thus improve the decentralization, feature offering, autonomy, flexibility and usability of DeFi platforms. This notable advance will have the direct consequence of attracting a greater flow of users to these platforms and thus increasing the liquidity and overall performance of the DeFi ecosystem.
The capacity of DEXs, Auto Market Makers (AMM) and lending and borrowing platforms, fundamental components of decentralized finance, will therefore be significantly improved. It is therefore highly anticipated that the Massa blockchain mainnet will be unveiled soon and that Massa’s autonomous smart contracts will be deployed there. Quickly find Massa with their incentive program to win many rewards.
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Editorial C.
The Cointribune editorial team unites its voices to express itself on themes specific to cryptocurrencies, investment, the metaverse and NFTs, while striving to answer your questions as best as possible.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.