Decentralized finance (DeFi) has taken the crypto world by storm. The market is comparatively nascent, and startups and projects are flowing in the space day by day. Back in 2009, Bitcoin gave the world an idea of how a digital currency can operate without a centralized medium. Ethereum added to the use cases by bringing in smart contracts that opened doors for startups to explore the decentralized space. The next big thing that's taking over the crypto space is decentralized finance.
These projects are adding value to the world of DeFi by introducing interoperability and other innovative ideas while significantly improving the underlying technology. This resultant improved technology is leveraged by startups entering the space where they can push the use cases a lot further.
What is Bifrost?
Bifrost, is a multichain middleware platform that helps developers create Decentralized Applications on multiple protocols. The main idea behind the project is to provide a solution to developers who face the limitations of using one protocol. Simply put, the existing blockchain protocols fail to provide decentralization, safety, interoperability, meaning they’re unable to transact with one another, all at once. This issue was termed as "the blockchain trilemma" by the founder of Ethereum, Vitalik Buterin. Bifrost uses its own programming language and development suite to create a dynamic environment for the development of these decentralized applications. The resultant protocol is flexible, scalable, and interoperable.
With Bifrost, blockchain systems are used as components or building blocks that can be combined to create a customized protocol that consists of multiple blockchains. The resultant decentralized applications would run on the amalgamated blockchains utilizing their features. This opens doors for infinite use cases as the dApps built in this environment would allow interoperability within the chains. Overall, Bifrost provides developers a platform for performing the entire process, from developing, deploying and operating their DApps.
How the platform works
To utilize the best of multiple blockchains, Bifrost splits the code of the dApp in the deployment phase and reconstructs it in a way so that the dApp can have the appropriate components of each blockchain. So, instead of increasing computational overheads by adding layers of abstraction to form a heterogeneous system, Bifrost just splits the dApp to the form of native smart contracts of each blockchain. Bifrost then acts as a "Linker'' and makes sure that these components then run smoothly and simultaneously.
According to the whitepaper, Bifrost believes that instead of trying to make the perfect blockchain that solves all the problems, cherry-picking algorithms to suit your needs is the best step forward as one blockchain cannot rule them all. Scalability and interoperability are the future of blockchain and projects like Bifrost are already opening doors for users into the future.
The dApp making process has 3 steps:
For development, Bifrost has developed their own high-level programming language called "Recipe". A developer selects the combination of blockchains and proceeds to write the smart contract's code in the said programming language.
In the deployment phase, the dApp is split and reconstructed to get the unique features of each blockchain.
The final phase is the operation phase, where Bifrost acts as a linker for the reconstructed components that ensure the smooth running of the dApp.
It is needless to say that not all use cases require solutions this extensive and it is important to identify what issues can be solved efficiently by the amalgamated protocols. Anthony Parker, the founder of Cuberoot64 stated:
"It is fundamental that startups understand whether the use case needs a Blockchain solution at all…"
With that being said, there are a plethora of use cases that can be tapped into using Bifrost's platform.
- Decentralized marketplaces can be designed where the users can buy using different cryptocurrencies.
- Applications for decentralized exchanges can work smoothly in such an ecosystem.
- Similarly, health and medical records can be brought into this ecosystem as well. Another brilliant use case is the formation of a decentralized payment system like PayPal for crypto that accepts different coins.
- The gaming sector can also be tapped with a lot of different ideas.
As a demonstration of the potential of Bifrost, BiFi was launched recently as the first dApp built on the Bifrost. This project connects Ethereum, Bitcoin, Tron, BNB, DOT, and Klaytn through its multichain connectivity, expanding the DeFi ecosystem. BiFi has its own token called BiFi. This token would be used for different financial services to be released on BiFi.
The Bifrost Token (BFC)
The project is still in its initial phases and due to the solid utility shows potential of growth in the near future. Currently ranked at 527 according to coinmarketcap, Bifrost Token, or BFC, is the native token for the Bifrost ecosystem. Developers pay BFCs to develop and operate their dApps on the Bifrost platform. The token started trading not very long ago and has a market cap of $29 million at press time. There are a total of 4 billion tokens issued out of which 256 million are in circulation.
The DeFi space is still in its infancy and not a lot of DeFi-based projects are running in the market. There are a lot of gaps that need to be filled and such innovative approaches to blockchain and decentralized finance promises growth for Bifrost. Although the token wasn’t released and listed very long ago the use case is rock solid which makes BFC a strong contender for growth. Where projects are aiming to bring adoption to crypto, bridging the gaps on the development side can actually help achieve the feat. It is said that a project is only as good as its UI and UX and with a huge playground for development, devs around the world have a massive opportunity through this project to explore and test the waters of blockchain DeFi.
Furthermore, the multichain interoperability and protocol stacking ability is actually a huge step ahead and will definitely attract projects that are suffering from protocol limitations. All in all, the better approach to technology; innovative solutions for scalability, security, and decentralization, and the overall exploring ground for developers makes Bifrost a strong contender for growth among all DeFi based projects entering the space.