Building a Blockchain Native DeFi Network on the MASS Consensus Engine
DeFi is very popular recently, but it’s not new.
In essence, Bitcoin is the first DeFi project in the world, which has writen the BTC issuance mechanism into the consensus protocol: Miners compete with each other to obtain the newly generated BTC, and in this way Bitcoin has become the first asset that has achieved decentralized issuance.
However, decentralized asset is only part of decentralized finance, and it needs to achieve decentralized asset transaction to realize the financial function. To break the barrier between blockchains, we need a cross-chain solution, which hopes to keep the independence of chains as well as achieve the asset transaction on the chain. Ethereum has gone another way. On Ethereum tokens can be issued through smart contracts, and the tokens with the same standard can be transferred on Ethereum. That is to say, the whole process from issuance to transaction can be completed in the closed environment of Ethereum, and this is the reason why DeFi projects have developed so fast on Ethereum.
If cross-chain solution is the Android system, Ethereum is the IOS system.
Although Ethereum is the most suitable soil for DeFi so far, it naturally has two major disadvantages. First, the essence of the tokens on Ethereum is not a decentralized asset. All the tokens are generated at one time when the smart contracts are deployed, and they can be issued or destroyed by humans, which is the root of the inferiority of the centralized financial system criticized by Satoshi Nakamoto. This has also directly led to an embarrassing situation: It is unknown how long the decentralized finance on Ethereum will be popular, but the decentralized scams have been emerging in endlessly. Second, the performance of Ethereum cannot carry the worldwide decentralized asset transactions, and the result is nothing more than congestion or high gas fees. This problem is happening now, which has made the DeFi on Ethereum the playground for the big holders and the object of speculation and carnival for the small ones.
The MASS consensus engine is a PoC consensus infrastructure supporting parachains. The parachains can share the security of the MASS underlying consensus network as well as designing the logic according to their own business needs.
Can a blockchain native DeFi network be built on the MASS consensus engine? Let’s just imagine! Nowadays there are three mojor parts in DeFi ecosystem: decentralized assets, decentralized lending and decentralized transactions. How will these three parts be implemented on the MASS consensus engine?
Decentralized assets: Parachains can design their own economic model and issue decentralized assets (similar to MASS), or issue their own cryptocurrencies by staking MASS coins (such as stable coins). Yield mining, the pusher of the DeFi market of this time, is obtaining profit by staking asset essentially, which has been presented on MASSNet at an early time. The staking mining mechanism of MASSNet encourages users to lock the MASS coin for a period and obtain the block rewards according to the weights. The weight is determined by the multiple of staking amount and staking period, and the profit comes from two parts: one is the fixed ratio (18.75%) of the block rewards, another is the game profit with the hard disk miners (62.5%, the belonging of this part of rewards is determined by whether the blocking hard disk is bound or not). Calculated with the current data, the annualized rate of return of staking for one month is 12% and 151% for one year (currency standard).
Decentralized lending: Parachains can provide the functions of lending by running the lending contracts. Miners supporting this parachain only need to run a smart contract virtual machine while running PoC mining.
Decentralized transaction: Each blockchain based on the MASS consensus engine obtains its exclusive ChainID according to unified calculation rules. Besides, the encrypted assets on the MASS consensus engine have the same standard, which has laid the technical foundation for asset transactions between parachains.
The MASS consensus engine has two major advantages for DeFi:
High performance: The real environmental throughput of MASSNet, the first chain on the MASS consensus engine has reached 200 TPS. In theory, the MASS consensus engine can support 1,000 parachain, and the overall TPS can reach 200,000.
Low transaction fee: Taking the current transaction fee on MASSNet as an example, the fee for one transaction is only 0.0006529 mass.
The staking mining on MASSNet has shown the possibility of the PoC consensus in DeFi application, and the MASS consensus engine is expected to cultivate a blockchain native DeFi network. This requires the MASS node network to gather a stronger consensus and attract more developers. As more and more hard drive resources converge on the MASS network, it is hoped to see more breakthroughs in applications.