This content originally appeared on DEV Community and was authored by Mad Devs
The rise of blockchain technology and cryptocurrency has pushed the boundaries of the industry of finance, creating an alternative to the traditional financial markets. In addition to the long-established securities, such as stocks and bonds, people can now trade crypto and perform other transactions using smart contracts.
The venue for such transactions is a decentralized platform. These platforms give users control over their crypto wallets and the freedom to lend, borrow, or trade their assets as they desire.
Just like any other service, decentralized platforms need promotion. In this post, we’ll consider a way to popularize them by using the example of a real-life project. But first, let’s delve into blockchain, decentralized finance, and other relevant topics.
Blockchain, smart contracts, crypto: Sorting things out
First things first, so before we turn to the main subject of the article, we suggest looking at the basic notions that decentralized platforms deal with. Here they are:
Blockchain
Blockchain is a general term for a technology aimed at organizing, managing, and storing data. In a blockchain, data is kept in blocks connected one by one chronologically. Each block has a specific storage capacity and contains information about the previous block, such as transaction details and a hash—a unique cryptographic code that allows for tracking any changes made to the block.
Blockchain is a decentralized technology that enables users to access, manage, and share information from anywhere in the world. So it’s also referred to as Distributed Ledger Technology (DLT). The blocks in the chain are arranged as nodes in a peer-to-peer network that have equal capabilities and do not depend on a central server.
The main advantages of blockchain technology include:
✔ Transparency
✔ Security
✔ Availability
✔ Integrity
✔ Confidentiality
Smart contract
Just like a printed contract, a smart contract is used to fix the terms of a transaction between the participants. But unlike a written agreement, a smart contract is a software program, so all the processes here are automated. The participants don’t need to control the execution of the contract, track the transactions, and involve third-party experts.
Smart contracts, also called transaction protocols, can be concluded between anonymous parties and can stipulate all the conditions, requirements, and workflows necessary to complete the transaction. Blockchain-based smart contracts are decentralized applications, so the information about the transaction is stored in each node of the network. Once the contract is deployed on a blockchain, it cannot be amended or annulled.
Smart contracts offer the following benefits to the users:
✔ Speed
✔ Accuracy
✔ Cost-efficiency
✔ Transparency
✔ Security
Cryptocurrency
Simply put, cryptocurrency is digital money that you can use to perform transactions online. The security of these transactions is ensured by encryption algorithms, and the history of transactions is kept in a digital ledger. Being powered by blockchain technology, cryptocurrency allows for decentralized transactions based on the peer-to-peer model. That means the transactions are possible between any crypto holders.
Each crypto holder has a wallet with public and private keys. The keys give access to the cryptocurrency stored on the blockchain and enable their owners to perform transactions using the currency. Crypto coins are generated during the so-called mining process, which involves the solution of complicated computational tasks. Among the most well-known cryptocurrencies are Bitcoin, Ethereum, Binance Coin, Dogecoin, and Tether.
Crypto’s strengths comprise:
✔ Security
✔ Transparency
✔ Accessibility
✔ Confidentiality
✔ Inflation resistance
What is DeFi?
Decentralized finance or DeFi is an ecosystem of applications, platforms, and technologies enabling financial operations with no intermediaries involved. In other words, DeFi is an autonomous system that is independent of banks, exchanges, and other financial institutions. The key features of DeFi include:
- Blockchain. The technology makes the system decentralized and allows users to interact with each other directly and anonymously.
- Smart contract. Agreements fixed in smart contracts help users conduct transactions automatically and securely.
- Cryptocurrency. Crypto serves as a medium of exchange intended to perform financial operations.
In October 2021, the value of assets used in decentralized finance reached $100 billion. The following advantages make DeFi a viable alternative to the traditional financial system:
✔ Accessibility
✔ Transparency
✔ Cost-effectiveness
✔ Time saving
✔ Security
DeFi platforms and what they offer
Decentralized platforms set the stage for DeFi transactions. Here, people can perform a variety of operations with digital funds, among which are:
- Lending and borrowing
- Exchanging
- Trading
- Earning interest
- Insuring
Decentralized platforms rely on blockchain networks, such as Ethereum—an open-source technology with its own smart contracts and crypto called ether (ETH), which lays the ground for DeFi transactions. For example, users of Ethereum-based decentralized exchanges (DEXs) can buy, sell, and trade crypto assets without any intermediaries.
DeFi has a set of rules regulating activities that take place on the blockchain. These rules are specified in protocols created by developers and other blockchain contributors. The same protocols can be used across different networks. DeFi platforms and applications tap into blockchain protocols to establish their workflows. For example, lending platforms utilize lending protocols so that users could earn interest while DEXs can apply aggregation protocols to optimize trades. With the help of liquidity protocols, DeFi exchanges can incentivize users to receive extra rewards by staking their tokens.
DeFi platforms provide for transactions with different types of cryptocurrencies, such as a coin, for example, Bitcoin, and a stablecoin, as Tether. The latter is non-volatile as its value is tied to an external asset.
A token is another kind of crypto asset used in decentralized finance to meet the purposes of a particular project or ecosystem. Thus, each DeFi platform or blockchain network can issue its own tokens to perform operations within the ecosystem. There can be:
- Utility tokens (grant access to the platform or network, making its products and services available to the user)
- Security tokens (represent the ownership of the token holder and can be used as investments)
- Governance tokens (enable users to manage the project and make core decisions about the blockchain protocol by voting)
A promotion solution for a DEX platform
There has been pretty much hype around blockchain and crypto for quite a while. These topics regularly hit the headlines, just like this one about Dogecoin skyrocketing after Elon Musk said he would accept the cryptocurrency as payment for Tesla vehicles.
The mainstreaming of blockchain has given rise to the proliferation of decentralized finance that makes crypto an accessible medium of exchange and a solid investment for many people worldwide. DeFi platforms are always looking for new ways to advance their services and expand the business.
A decentralized exchange that turned to Mad Devs is one of the largest DeFi platforms with annual investments of $12 million. The DEX unites blockchain protocols to provide the most beneficial, time-saving, and secure DeFi transactions.
The company wanted to promote its products and services, such as a token, wallet, liquidity mining, etc. To achieve this, they were planning to develop a game and present it in a head-turning marketing campaign. One of the options was to embed the game into the digital wallet so that the user spent more time in the app. Also, the client had certain requirements for the game.
Project requirements:
- The game should be both entertaining and play-to-earn.
- It’s necessary to think through the play-to-earn mechanism.
- The game monetization should be implemented in compliance with all applicable laws.
- It’s crucial to prevent the user from registering multiple accounts and earning as a different user.
- The game should have a leaderboard with nicknames and addresses.
- Registration and authentication should be implemented in the app.
- The app should be developed for iOS.
- The web version could be created to use the app on different devices and authorize via the wallet.
But the most critical requirement for the project was the tight timeline—the game was supposed to be developed within just 1.5-2 months.
Mad Devs scrutinized the client’s needs and requirements and offered suggestions on how to implement the project meeting the deadline.
Mad Devs suggestions:
✔ For starters, it was important to set the main goal of the game: whether it should be short-term hype or a long-term play. The latter scenario could give an opportunity to get regular users who earn tokens and pay commissions.
✔ To save time and speed up the launch, it could be preferable to start with the game development, adding monetization later.
✔ As the game concept, we suggested using a 2D pixel art racing game in the style of the 16-bit classics from the ‘80s. This was an achievable task to complete within 1 month or even less, considering that we had an ample widget library.
To sum up
Backed by blockchain technology, smart contracts, and crypto assets, decentralized finance stands a good chance to edge out traditional financial systems and institutions. Direct communications between the parties, no need for intermediaries, highly automated processes—these are just several examples of how DeFi makes transactions easier, faster, and cheaper.
DeFi incorporates platforms and applications that enable people to lend, borrow, trade, and carry out other operations with crypto. By using the expertise of software development teams, decentralized platforms can create promotion solutions to attract more users and grow their business. By leveraging our knowledge and experience, we at Mad Devs can help you advance your DeFi products and services.
Previously published at maddevs.io/blog.
This content originally appeared on DEV Community and was authored by Mad Devs
Mad Devs | Sciencx (2022-02-14T06:29:05+00:00) What a Decentralized Platform Is and How It Can Be Promoted. Retrieved from https://www.scien.cx/2022/02/14/what-a-decentralized-platform-is-and-how-it-can-be-promoted/
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