If you are planning to launch a new DeFi project in 2021, chances are you have been intrigued by the unprecedented growth of this revolutionary sector or you have seen its powers first-hand. By powers, I mean unbelievable traction, higher returns, and complete transparency.
DeFi or Decentralised Finance has become the hottest topic in the world lately. Especially for the world that has been hit by the pandemic or the world that has suffered at the hands of centralized financial institutions repeatedly, a possibility of having a decentralized system seems to be the answer.
In essence, Decentralised Finance is the new financial paradigm that is governed by programmable contracts. Compared to the traditional financial system that revolves around a central authority, Decentralised Finance depends on pre-programmed smart contracts which eradicate the possibility of manipulation, delays, or human-errors.
But, this information is probably not new to you. If it is, please refer to our previous blogs on DeFi where we have explained this technology in detail.
Coming back to our main topic and addressing the need of the hour, all of us want a piece of the cake. There is no doubt that DeFi is going to be the new face of finance. So how to launch a DeFi project in 2021?
Launch the DeFi project in 2021
First things first, you need to identify a suitable use-case and the need for DeFi in that use-case. DeFi might be a possible solution for optimizing any financial service but the implementation of DeFi projects needs to be well-thought.
Once you are sure about your DeFi project and are ready to develop it or get it developed, you need to look out for the three stages mentioned below:
- Smart contracts
Smart contracts are the most integral part of Decentralised Finance. They are the engine on top of which, DeFi runs. If you want to build a DeFi project, what you actually require is to develop some smart contracts. These smart contracts are developed on different Blockchain platforms and in different programming languages depending upon the underlying Blockchain platform.
For instance, a smart contract on Ethereum Blockchain is developed with Solidity language. On EOS, these smart contracts are developed in C++. Therefore, you firstly need to identify which Blockchain platform you want to build your DeFi project on and then you can start the development of smart contracts. However, developing a smart contract is not an easy task especially for a DeFi application which usually requires multiple smart contracts. In this case, you need to define a number of functions for each financial service you want to provide.
A smart contract development company such as Quillhash can help you reach your goals in an efficient and optimized manner.
When it comes to smart contracts, you can trust only experienced developers who understand the ins and outs. A simple google search on DeFi attacks and hacks will be enough to understand the importance of experience in the smart contract world. Your DeFi project probably will have millions of dollars locked inside smart contracts so the need for experienced developers, such as those at Quillhash, needs to be your top priority.
- Audit
Every smart contract needs an audit. Not just any audit, an audit by professionals. As mentioned earlier also in this blog, DeFi is heavily dependent on smart contracts. All the cash flow in the DeFi ecosystem is happening through smart contracts. Therefore, there are millions of dollars locked in these smart contracts and even a small backdoor can lead to unbelievable losses.
Smart contract audits have become a necessity for the world moving towards decentralization.
Usually, an audit is done to check for potential risks and backdoors in smart contracts such as reentrancy attacks, Phishing, Oracle Manipulation, and Denial of Service attacks. It is crucial to note that other risks such as economic incentive risk, financial illiteracy risk, and regulatory risk are not a part of the audits but requires a deep financial understanding of the market.
To have a deeper look into smart contract audits and understand their role in building the new financial world, please refer to our case study on this link(Link here).
- Launch
If you think developing a smart contract and getting it audited is where the hustle ends, you are in for a surprise. Launching a DeFi project is the last step you have to do before your users can reap the benefits of your services. However, launching a DeFi project is not as simple as it sounds. Even though you have the complete code in place, deploying it on the network requires another set of skills. The deployment has three aspects:
First is the deployment of the smart contracts. Before the smart contracts are deployed on the main network of the Blockchain, they have to be deployed on the test network. On the test network, the smart contracts are exposed to different conditions so that their performance can be optimized. Things like gas fee and transaction confirmation time are observed so that there are no surprises on the main network.
Second is the deployment of the backend code. The backend code is usually done in languages such as NodeJS, Java, Go, and Python. These languages are used to create APIs or application program interfaces that are like the gateway between your smart contracts and the end users. This part of deployment needs a dedicated server to host this application so that the end users can access it from anywhere in the world.
Lastly, you need to deploy the frontend which connects to the backend. This frontend is what we see when we open any website. This is why it is called the user interface.
All of this deployment needs to be seamless in order for all the components to work in perfect sync. Even a small bug in any of these three parts can lead to a loss of millions.
Another major thing to consider is that it becomes extremely difficult to manage a large number of contracts or to even keep their records. This is where QuillPlay comes in. With QuillPlay, you can do the following things with just a click:
- Add your existing contracts to the platform
- Create new smart contracts
- Create STOs, NFTs, Utility tokens, dNFT, Crowdsales, and more such tokens with predefined templates to get you started quickly.
- Monitor your smart contracts at a single place with QuillMonitor
The importance of integrations
Apart from the aforementioned steps, another thing to consider is possible integrations.
An isolated DeFi application is not able to accommodate the needs of the modern user and therefore needs seamless integrations with other DeFi projects. DeFi is a huge ecosystem and every project is either a competition for you or a potential integration.
For instance, if you have an ERC20 token and you want to implement swapping, you would need an integration with a platform like Uniswap to cater to a wider audience.
Another example is yEarn, a perfect integration for projects looking to harness the power of yield farming.
Other common examples that are perfect for an initial integration are Curve.fi, Compound, Balancer or Aave.
Reach out to QuillHash
With an industry presence of years, QuillHash has delivered enterprise solutions across the globe. QuillHash with a team of experts is a leading blockchain development company providing various industry solutions including DeFi enterprise, If you need any assistance in the DeFi project development, feel free to reach out to our experts here!
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Source: https://blog.quillhash.com/2021/03/03/how-to-launch-new-defi-project-in-2021-a-brief-guide/
