At a time when the decentralized finance (DeFi) protocols have seen a large outflow of funds from the market, maintaining liquidity has become even more difficult. Liquidity plays a central role in the DeFi ecosystem, and many protocols over time have come up with various new solutions to keep liquidity pools afloat. The latest liquidity market trend is focused on cross-chain solutions.
Many experts believe that cross-chain solutions are the future of DeFi, and Symbiosis Finance, a liquidity protocol, has come up with its own cross-chain liquidity solution based on stablecoins. The liquidity protocol uses stablecoins to ensure that liquidity providers (LPs) do not suffer any impermanent loss.
Nick Avramov, the co-founder of Symbiosis, told Cointelegraph that they got initial cash from Binance Labs, Blockchain.com, Amber and a few others and hope to earn more LPs once they have reached a transaction volume of approximately $100 million. .
Related: Liquidity has been driving DeFi’s growth to date, so what’s next?
Talking about the importance of using stablecoins instead of different crypto assets, Avramov explained that using stablecoins not only helps eliminate impermanent losses but also ensures seamless transactions across different blockchain platforms. . This allows one-click trading. Avramov explained:
“We are activating native asset exchanges, not just indexed illiquid, but another USDTxyz.”
Symbiosis Finance supports cross-chain exchanges between any blockchain that allows EdDSA and ECDSA key generation. This actually means that anyone can trade, for example, an ERC-20 token for Solana, Polygon, or other crypto assets developed on the Binance Smart Chain. Speaking about the future of Web3, Avramov said:
“The quest for interoperability is vital for further adoption, so cross-chain and multi-chain solutions are the very building blocks of the Web3 economy.”
The liquidity provider has also paid close attention to the interface to ensure that the front-end user has a seamless experience. The protocol eliminates the need to switch between complex virtual networks during switchovers. All of these processes happen in the background using smart contracts.
Asked about the security aspect of the network, some cross-chain platforms have recently been targeted by miscreants, with some of the biggest break-ins occurring on cross-chain protocols. Avramov said security is one of their top priorities and they have already passed several audits of established companies.
Symbiosis Finance has secured its strategy investment from Binance Labs earlier in February this year and launched the beta mainnet a month later in March. The protocol has secured multiple partnerships and has been integrated by various platforms.