EYWA — Making DeFi cross-chain interoperability a reality
Source: EYWA Website
The DeFi market is growing rapidly. A recent report by Nansen estimated that the growth of the market in 2021 compared to 2020 was 1,120% in Total Value Locked (TVL). Volumes are increasing, with more and more new projects appearing every day. Everything seems to be working fine with DeFi products on their individual blockchains. Therefore, are cross-chain protocols really necessary to ensure interoperability between different chains?
According to EYWA, not everything is as good as it seems. There are problems already occurring, of which fragmentation is one of the main ones. This has not only caused a slowdown in market growth but also a significant rollback. During a drop in the market, volumes will fall as a result. In these cases, problems with access to liquidity due to funds being stuck in different chains has played a major part in this happening. Without a cross-chain protocol, DeFi cannot fully compete with traditional finance, simply because the latter is more convenient for users (which is also caused by the fact that it is centralized). For most potential users, this factor outweighs the advantages of decentralization.
There are many possibilities to solve this problem of fragmentation, but most of them are limited to the creation of a cryptocurrency exchange or a bridge to swap specific tokens. Of course, these two options solve the problem of transferring assets between blockchains and are necessary elements of the ecosystem which are widely used by crypto users today. Without them, there will be limited interoperability between different blockchains. However, this is not enough for a full-fledged interaction between blockchains. There is the need for tools to transfer not only assets, but also information.
If we are talking about smart blockchains with smart contracts, you can also transfer calls, which are executed between a buyer and seller for example, and this is already directly written into the code. Therefore, EYWA has decided that they should create a ready-made framework for DeFi developers so that they don’t have to privately solve the problem of interoperability every time they have an idea for a cross-chain application. This is exactly the task that the EYWA Cross-chain Data Protocol solves — it is a decentralized data transfer protocol between blockchains, backed up by a network of oracles — the EYWA Relayer Network.
This data transfer protocol complements the EYWA Cross-chain Liquidity Protocol — a system of decentralized cryptocurrency exchanges designed for the fast and cheap transfer of assets between blockchains. The uniqueness of the EYWA project is that it combines two completely different elements of ensuring interaction between blockchains into a single system: a data transfer system and an asset transfer system. This ensures the full compatibility of even the most diverse blockchains. And the decentralized structure of EYWA eliminates the need for users to trust the developers.
Source: EYWA Website
The EYWA team has been hard at work and as of Dec 2021, more than 140,000 users have taken part in the testing of their Alpha version. Cross-chain functionality has been tested on Ethereum, Binance Smart Chain, Polygon, Avalanche, and HECO, with Harmony ONE, Algorand, NEAR, Metis, Solana, and others in development.
The EYWA project has also received the following grants, which is no small feat for a crypto project:
- NEAR Foundation — $40,000
- Harmony One — $50,000
- Algorand — $95,000
- Aurora — $50,000
According to their road map, the TGE of the $EYWA token will occur in Q2 2022 and will be used for governance, discounts, payment & trading, proof of stake, yield farming, and also to boost the efficiency of capital as a liquidity provider.
There is certainly a lot happening for EYWA and we are excited to see its progress. If you’d like to sign up to help in the testing or simply to keep updated on what’s happening with them, be sure to follow them on their official channels below!