In a Nutshell: Decentralized finance — or DeFi — is a growing movement among cryptocurrency enthusiasts, but whether blockchain will supplant legacy financial infrastructure remains an open question. That’s why LiquidApps developed a network to build decentralized apps (dApps) and a suite of tools and services to help push DeFi forward. The LiquidApps middleware solution, LiquidOracles, was designed to solve cost and throughput challenges for DeFi developers, including Equilibrium. And Equilibrium has integrated LiquidOracles into its EOSDT stablecoin to shelter it from network congestion and potential compromise.
Financial services — including banks, lenders, traders, and insurance companies — are increasingly making their way onto the blockchain. And that decentralized finance (DeFi) sector now holds more than $1 billion in value.
DeFi advocates envision a system that functions entirely on internet-connected parties that can link up worldwide without the need for inefficient intermediaries, including banks.
But getting there requires plenty of groundwork. Decentralized apps, or dApps, that enable blockchain services to depend on smart contracts for their performance. The smart contracts automate peer-to-peer blockchain transactions so that after one action is finalized, another can take place. Those complex instruments depend on the integrity of their publicly accessible code.
That is why LiquidApps was developed to streamline and secure the foundation-building process and foster trust in the DeFi system. LiquidApps built a platform of tools and services for standardizing DeFi development. One of those tools, LiquidOracles, is specifically designed to help stablecoin smart contracts run faster and more efficiently.
Cryptocurrency is the glue that holds DeFi systems together. But while cryptos like Ethereum can store value and facilitate exchanges on the blockchain, they aren’t backed by real-world assets, so their value fluctuates on a speculative basis. That’s why developers use smart contracts to build stablecoins that rely on backing — including fiat, commodities, or other cryptos — to guarantee their value.
DeFi is so new that developers generally build platforms and apps from scratch — similar to how cars were built before the assembly line. LiquidApps helps those financial services entities hit the ground running.
The Equilibrium platform integrated LiquidOracles into its prominent EOSDT stablecoin framework, injecting fresh energy into the already burgeoning DeFi ecosystem.
“We created LiquidApps to build toolsets that were not there before,” LiquidApps Co-Founder and CEO Beni Hakak said. “And LiquidOracles is crucial to supplying data with a high degree of integrity to DeFi dApps.”
DAPP Network: Infrastructure and Tools for Cross-Chain dApp Creation
Hakak’s journey to LiquidApps began when he developed an interest in crypto as manager of a tech media outlet. That led him to the COO position at the crypto exchange Bancor, which used a protocol that works on Ethereum and Equlibrium’s EOS network. From that vantage point, he and his eventual co-founder began to discern the limitations of both platforms.
“We learned first about the scaling issues on Ethereum, which brought us to EOS,” Hakak said. “But then we learned that EOS was not perfect, either.”
They found that developing on EOS — notwithstanding the value of its ambitious stablecoin project — was too expensive.
They started LiquidApps as a products and services platform to enable blockchain development to proceed as efficiently as possible.
“We were seeing many blockchain projects actually doing the same infrastructure work because there was nothing universal,” Hakak said.
LiquidApps’ DAPP Network quickly evolved as a dApp middleware layer, a collection of services for DeFi developers that works across multiple blockchains to accelerate product delivery.
To that end, the blockchain-based recruitment firm Moonlighting used vRAM, the LiquidApps memory solution, to reduce its storage costs from $2,000 a day to only $10.
LiquidApps also helps developers address some of blockchain’s other scalability issues with LiquidChains, bringing real-time gross-settlement capabilities to DeFi.
LiquidChains accomplishes that through an innovative design that creates high-performance blockchains that can achieve practically limitless levels of parallel computation.
“These cross-chain shards are also auditable because you can transfer all of the transaction through a hashing mechanism to a mainnet of some sort, allowing banks, for example, to audit, basically, forever,” Hakak said.
LiquidOracles Delivers High Throughput for Developers
LiquidOracles builds on the progress of LiquidApps by helping the DAPP Network deliver on the promise of high throughput for stablecoin platforms. It accomplishes that by refining the way the network handles smart contract interactions with off-chain data.
A stablecoin smart contract needs an oracle to efficiently access the asset prices it uses to maintain its coin’s peg. And it must do that from whatever platform or source those prices originate. Stablecoin oracles must maintain access to their mainnet blockchains even in times of heavy network congestion.
In high-congestion situations on a network like Ethereum, the gas fees that pay for computational access can result in extreme loss of value for stablecoin holders. Such a circumstance recently occurred for holders of DAI stablecoin on Ethereum.
LiquidOracles renders that issue moot by moving the data verification process onto the mainnet.
“DApps that use LiquidOracles can refresh their price feeds much more regularly, up to twice every second, all at zero gas cost and while maintaining full control over oracle sources,” according to a LiquidApps blog post. “This allows LiquidOracles to perform regardless of the prevailing market conditions.”
That also means protection from modification of the smart contract by malicious parties. LiquidOracles manages that on an entirely cross-platform basis while enabling developers to customize variables, including the number of data source providers against the specific trust requirements of the service provided.
“I see decentralization as a spectrum,” Hakak said. “If you’re building something like a game, the trust level is not that important, and you can use one or two oracles for redundancy. But if you’re a bank, you want as many oracles as possible.”
LiquidApps is so committed to optimizing decentralized development that it is offering a bounty prize for those who utilize its DAPP Network to enter Reddit’s Scaling Bake-Off. The DAPP Network and its community aim to take on the challenge of helping Reddit onboard its 430 million users onto the blockchain.
With Reddit looking to decentralize, it plans to move its existing community points program onto Ethereum. And LiquidApps is offering 1 million DAPP Tokens, which has been matched with an additional 1 million DAPP tokens by EOS Nation, for individuals or teams who can successfully demonstrate the DAPP Network’s advanced scaling middleware for Ethereum.
EOSDT/LiquidOracles Integration Offers a Robust Stablecoin Solution
Equilibrium chose LiquidOracles to optimize its EOSDT stablecoin to provide the most efficiency possible while saving it money and streamlining its process.
“I’ve known EOSDT CEO Alex Melikhov for a while — we worked together in the past,” Hakak said. “Once LiquidOracles came into play, it was pretty obvious to both of us that this was something they were going to use.”
Integration is an essential component of EOSDT’s stability mechanism, which maintains a 1:1 relationship with the U.S. dollar. Given the complexities inherent in such an arrangement, drawing on LiquidOracles comes as a significant advantage.
EOSDT also benefits from the platform’s customized trust capabilities, choosing to run its own data provider alongside LiquidOracles to provide an additional verification layer. And because the system runs on the DAPP Network, EOSDT forgoes high fees in favor of a regular access quota.
It all adds up to a stablecoin platform emphasizing security and reliability and positioning itself as a mainstream alternative to fiat.
“That’s what our solution is all about,” Hakak said. “You, as the dApp developer, can choose the feeds you’re going to put into the oracles and the timing for the data that will come out. You can even choose your consensus mechanism and how you will integrate all of the results you’re receiving and whether you want them to be 100% equal or anything else.”