BeinCrypto spoke to Piers Ridyard, CEO of Radix, about his protocol’s novel solutions to critical DeFi issues. The Layer 1 DeFi protocol team conside it “DeFi done right.”
Decentralized Finance (DeFi) has exploded over the last few years. However, this has come with its own set of issues. These include problems with securing code, accessibility for developers, and scaling.
Many people are trying to find solutions to these issues. However, most are attempting to build from what already exists. For Radix, it’s about envisioning DeFi from the ground up, using the knowledge that already exists.
For Ridyard, Radix’s work isn’t just about addressing issues but reaching the ultimate goal of a new world financial system.
“Our mission is basically to create a new decentralized global financial system because we believe that only when you get to a system that is able to exist beyond that of single entity controls, single organization control, single government control can you end up with something that’s free and world-changing.”
To achieve this, Radix focuses on three key fixes. These are building fast but not breaking things, making building rewarding for everyone, and provide scaling that works.
Reconsidering the building blocks of DeFi
For Ridyard, building Radix means building a protocol tailor-made for DeFi. This includes its own building language, called Scripto.
“Ethereum developers, and everyone using Solidity, spend 90% of their time securing their code and only about 10% of their time building functionality. Despite that incredible focus on security, we’re still seeing $285 million of hacks today.”
Ridyard doesn’t blame the developers but rather the tools for these issues.
“Solidity and the Ethereum Virtual Machine and everything that DeFi is built on today were not actually built for finance…Solidity is a JavaScript-based language, which is the language of the web, which is fine, but if you pulled anyone from the tech team in a bank and said ‘What language do you want to build your core infrastructure?’ There is no way they would say Java,” he says.
A different approach
To tackle this issue, Radix chose to flip the script, reduce the amount of time on security, and build its own language.
“So Radix took a different approach, we were like let’s 10x the effectiveness of developers by massively reducing the amount of time you have to spend on security, and that lowers the barrier to entry, and it makes it easier to build decentralized finance applications,” he explains.
“We have the advantage of being late.”
Building a language is not simple, and knowing what will work and what won’t comes with the benefit of hindsight.
For Ridyard, being a bit late to the DeFi space means that his team can see what the mistakes are, speak to people and tackle the issues at the fundamental layer.
Rewarding developers to build a community
Alongside making developing more accessible, Ridyard explains who his team aims to create incentive mechanisms that aid community development.
As DeFi is all about open-source, it is a challenge to determine rewards for developers. For community developers, a lack of incentive to build the innovative products, for little to no return, there may not be much point investing that time and skills.
For Radix, this is why creating a rewards incentive was necessary. So they came up with blueprints.
“When you write an application, the first thing you do is write the blueprint for the application. You can think of the blueprint as like how you build a house.”
If a developer wants to create a new component, they can work from this blueprint making it faster and easier to build. In addition, the protocol rewards the creator of the blueprint as well.
“So this idea is just how to reward everyone who makes it better, allow there to be incentives that give back to the community and help strengthen the community on top of Radix,” he explains.
“The third value pillar…is the ability to scale decentralized finance linearly.”
Despite having these solutions, Ridyard notes that DeFi’s issues are not straightforward. This is especially so when it comes to the big question everyone wants answers for — scalability.
“Scalability is never a simple concept.”
Radix’s approach is to this issue is two-fold. The first is to build consensus to allow multiple applications across shards to be atomically composable.
The second is their own execution environment, the Radix engine, “which instead of being the Ethereum Virtual Machine is something called a finite state machine,” he explains.
“What that means is instead of going, here’s a bunch of logic that you have to iterate through. It says, these are the states, and these are the transitions, and you can only transition from this state to this state and then from this state to this state.”
Through this consensus mechanism, combined with its efficient code, Radix aims to get around the issues holding DeFi back, like lag times and high gas fees.
Beyond technical issues
However, it’s not only the technology which needs improvement.
“So many things within decentralized finance right now are entirely unacceptable to an average user, and they all come down to user experience. So Metamask as a user experience isn’t an acceptable user experience. It’s not that it’s bad, it’s that it is terrifying.”
He explains that for average users, the current system is not designed for less frequent interactions, making each transaction stressful and uncertainas users never get used to the somewhat difficutl interface.
Much of this, Ridayard, assigns to the current stage of DeFi. He considers the DeFi space “pre-Netscape Navigator,” meaning that it’s still in the stage before caring about the user experience.
“I think that that’s the biggest thing that is holding it back outside of the technology challenges, the biggest thing holding it back from mainstream.”
Getting people on board
However, Ridyard doesn’t see these problems as impossible to overcome.
This is how Radix’s educational platform, GoodFi, came about. It is an effort by Radix and its partners to encourage people to use DeFi.
He compares DeFi’s journey to the adoption of the internet. To get people online, you had to convince them to get the tools: a computer, an internet line, and show them how to use a browser.
While we can laugh about how those all seem so simple, the progression from internet uncertainty to full-blown adoption happened in a remarkable space of time. However, it was first about getting people on board.
“Today, GoodFi is founded around the same idea. We don’t care about the amount of money people put in. You need them to get a Web3.0 wallet, you need them to get crypto into a Web3.0 wallet, and you need them to learn how to put that crypto to work in DeFi.”
As a result, GoodFi aims to get 100 million people onto DeFi by 2025.
“Then we have a really good chance of doing the same thing with DeFi that happened with the internet and raise the total addressable market of the space, and that’s in everyone’s interest.”
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