Foreword: Agreements and applications within Ethereum can be combined to create something new like never before. This way, it is called "Lego" mode by many people. This means more possibilities exist. Of course, it is impossible for all portfolio innovations to be popular. Failures are always more than success, but the hidden possibilities here allow us to see the future of open finance, a finance that does not require permission and no trust. The platform can realize almost all the functions of traditional finance. The power inside is endless, and a window of future finances has been opened. The author of this article is "LindaXie", translated by "SL" by the "Blue Fox Notes" community author.
As one of the most famous smart contract platforms, one of Ethereum's unique strengths is interoperability and composability between multiple different protocols and applications. This is not to say that other smart contract platforms can't achieve this goal, but it takes a long time to build a robust protocol with network effects, including liquidity, usage, developers, communities, and infrastructure.
If you are building on areas that involve high-value transfers, such as DeFi, then for protocols and applications, you need to spend time on actual testing to reduce the probability of bugs. However, please note that this does not mean that after a period of time, they are completely free of errors. Ethereum smart contracts have and will continue to have bugs, so it's important to be cautious when interacting with them.
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In Ethereum, protocols and applications can be easily inserted and combined to create something new. This is sometimes referred to as "Lego blocks" in the community. This is an unprecedented new concept in the traditional world, not just a decentralized way to replicate existing products.
Another benefit is that you can start and get out of projects and communities in this way. For example, if you want to create a non-homogeneous token (NFT, refer to the article "What is a non-homogeneous token?" before the Blue Fox note, such as in-game props, then you can immediately pass the decentralized transaction agreement. Trading.
What's really interesting is that you can use this ability across different industries. You can combine completely separate areas and gain a deeper understanding of the relationship between them.
For example, you can combine DeFi with games. By adding DeFi to the game, we can better understand motivation and the market, and by adding games to DeFi, we can make finance easier for different audiences. Communities that often do not interact with each other begin to communicate and share ideas, which may lead to more innovation. To be inspired, Brain Flynn shared his concept of combining Pac-Man and Stabilizing DAI. (Blue Fox Notes: PAC-MAN is a Pac-Man game)
As far as composability is concerned, you can also see creativity in the hackathon developers. In September 2019, ETHBoston's hackathon, there is a project called SwanDAI, which is a synthetic asset created using UMA, a platform that allows the creation of synthetic assets.
SwanDAI tracks the dollar anchoring bias of the stable currency DAI, supporting the anchoring of gambling and hedging DAI anchors. In August 2019, the Cheeze Wizards hackathon also showed different agreements for combining games. (Blue Fox Notes: Cheeze Wizards is a cheese wizard, a new encryption game product developed by the Encryption Anchor team.) For example, the "Cheeze of Insight" project combines the "Cheeze Wizards" game with the Augur forecast market and 0x instant widgets in Augur The daily market is released, where users can bet on the market for the matchup on the "Cheese Wizard" game.
The possibilities are incredible, conceptually, you can almost all tokenize and plug in different systems. Projects like the 2100 combine financial and social media by allowing participants to lock in DAI to dig up tokens linked to Twitter accounts. After that, you can do some interesting things, such as betting on Twitter accounts, getting more attention, and getting people to earn money through Twitter accounts.
Projects like PoolTogether combine lottery and DeFi. People buy lottery tickets, and all the funds for the ticket purchase earn interest through DeFi's Compound agreement. At the end of the lottery, everyone can get back their own purchase capital, but one of the lucky ones gets interest on all the lottery pool funds, it is a “lossless” lottery (unless you consider the smart contract Possible risks and opportunity costs of directly earning capital interest.
What I want to emphasize is that by combining different protocols and applications, this increases the risk of smart contracts. If a protocol has a major smart contract bug, it can cause the entire system to crash. That's why it's important to put too much money on any of these systems.
Ultimately, when the field becomes big enough, I believe that centralized insurance companies will provide smart contract-related insurance products that will use smart contract auditors to evaluate the code. This is similar to the insurance on the cryptocurrency that some asset custodians and exchanges store for them.
It’s exciting to see more attempts at composability, because it’s brought about by encryption. Developers can spend less time launching what they are doing because they can save time and inherit a large number of communities around them by plugging in different protocols and applications.
Given the network effects of Ethereum, this may lead other platforms to focus on specific areas, especially those that do not require high value transfer. We have seen that games and in-game props are the main focus of future smart contract platforms such as NEAR and Flow. Overall, there is still a lot of interesting work under development.
Risk Warning : All articles in Blue Fox Notes can not be used as investment suggestions or recommendations . Investment is risky . Investment should consider individual risk tolerance . It is recommended to conduct in-depth inspections of the project and carefully make your own investment decisions.