2020 is unquestionably the year of decentralized finance (DeFi). The total value locked in DeFi protocols shot up from $660M in January 2020 to $12B in October 2020. New projects like Yearn, Curve, and Aave received major interest while established players like Compound and Uniswap launched their own governance tokens. Despite the growth rate being impressive, $12B is still a measly figure compared to traditional markets. So as the growth in DeFi has begun to slow down, the question now arises: how do we take DeFi to the next level?
There are many answers to this question. The expansion of DeFi is currently limited by high fees, behaviors of self-motivated traders, and lack of a reputation system or identity. The result is an overloaded and expensive system that requires to ‘trust’ borrowers by asking them to over-collateralize their assets to access loans.
While there are other causes for this such as crypto’s volatility, the main reason for the over-collateralization is that there is no way to “trust” a user as there are no robust on-chain identity solutions. Even if DeFi is able to just move from the 150% collateral factor to a 50% factor, the amount of usable capital in DeFi can increase 2x.
The Oasis Solution
The Oasis Network offers a potential solution to these problems. Oasis is a privacy-enabled, scalable blockchain built for decentralized finance and a responsible, user-owned data economy. Using a combination of confidential compute and blockchain, the Network enables protection of business interests such as trades, low fees, and the creation of identities based on user-controlled data.
This unlocks new use cases like private lending, under-collateralized loans, and private automated market makers. Users can upload and control identity data such as their credit scores without exposing that information publicly. This then allows them to apply for under-collateralized loans as the lender can now place more trust in the borrower. By bringing privacy and scalability to DeFi, the Oasis Network can expand DeFi beyond early adopters to a mass market. With the Network’s unique ParaTime Architecture that separates consensus (Consensus Layer) from computation (ParaTime Layer) the network can also address many of the scalability issues common in DeFi today.
DeFi Use Cases
Since Oasis is backwards compatible with Ethereum thanks to its ParaTime architecture, developers are bringing Ethereum-native DeFi protocols onto Oasis as well. Applications and protocols being built on or brought to the Network include Uniswap, Balancer, Chainlink, Wyre, Stafi, Meter, Torus, and others. In fact, Oasis just announced a partnership with Balancer to fund a joint grant to bring Balancer to the Oasis Network.
Other Early Use Cases
The Oasis Network’s privacy-enabled design is already being put to use. Current use cases that leverage the network’s privacy include:
Crypto theft and attacks are on the rise, and exchanges need a platform to identify and ban bad actors. Building on top of the Oasis’ technology, the CryptoSafe platform enables exchanges to share threat intelligence data. Because of the Oasis Network’s support for confidential computation, exchange data is kept confidential even while it's being compared.
Nebula Genomics wanted to differentiate their product from other competitors by giving their users control of their genetic data. Using Oasis’ framework, customers can retain ownership of their genomic data and Nebula Genomics can run analysis on the data without seeing the customer’s raw information. This product is already available to Nebula customers in Beta today.
3. Fortune 500 Healthcare Provider
A Fortune 500 healthcare provider wanted to share data with external parties while retaining control of the data and protecting the confidentiality of patient data. Using an Oasis Labs-built API, this leading healthcare company is able to track, trace, and control data usage even when shared with third parties.
Layer-one blockchains are becoming more composable and migrating to new chains has become increasingly easy for DeFi projects. Similar to how DeFi protocols like Project Serum are moving to blockchains like Solana that best serve their purposes, DeFi protocols may begin moving to Oasis to take advantage of the network’s built in privacy, scalability, and ParaTime architecture.
Stay tuned for our deep dive into Oasis and register for the Oasis ROSE Garden here: https://coinlist.co/oasis
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