Developing DeFi Applications Is Easier Than Ever – Here’s Why

If you’ve never developed a blockchain application, the prospect of doing so may seem daunting. Doesn’t this call for a strong coding background, deep knowledge of cryptography, familiarity with smart contract languages, and umpteen other skills? Not necessarily.

While some programming knowledge is certainly required, and a working knowledge of blockchain is a definite advantage, everything else can be learned on the fly. Thanks to improved developer resources, better tooling, and libraries, dapps can now be deployed much more rapidly. Not only that but they can be equipped with powerful features that utilize innovations such as zero-knowledge technology – without needing to master SNARKs and STARKs.

In short, it’s now possible to create and launch a feature-rich DeFi application without getting bogged down in compiling, debugging, indexing, and all the other tasks that web3 development typically entails.

Better Resources for Devs

Four years ago, if you wanted to get started on Ethereum, you were on your own. Save for a handful of user-generated videos on Solidity basics and gas management, resources were in short supply. That’s no longer the case, thanks to a slew of dev-centered educational portals that aim to get builders up to speed. QuickNode’s builder’s guide is probably the best place to start, detailing all the tools required to create a DeFi application, from oracles to RPCs. While there are a lot of moving parts, each one is clearly explained and, it should be noted, a typical dapp will not require all of these components.

It’s not just learning resources that aspiring developers are now blessed with: the same is true of financial resources. A plethora of hackathons and grant programs are now a mainstay of blockchain ecosystems from Polkadot to EVM L2s. These provide the support, mentoring, and networking that can turn a DeFi idea into a working reality. As a result, devs no longer have to go it alone, toiling away in a vacuum. Blockchain networks have the funds and the willpower to help new developers get started.

Data on Demand

A dapp is only as good as its data. DeFi dapps now typically draw data from an array of sources, both on- and off-chain. In the past, this meant running multiple blockchain nodes and being responsible for maintaining them and keeping them in sync. The evolution of web3 infrastructure providers, however, now enables dapp developers to access powerful data streams on tap.

The best web3 infra companies deliver data from on- and off-chain sources without introducing centralized chokepoints in the process. This is achieved by routing data through decentralized networks and using distributed storage for delivering content. 

The way in which data is stored and delivered is now much more efficient, allowing thousands of read-and-write transactions to be included in a single block. Chromia, for example, uses relational tables that allow web3 developers to access indexed data, eliminating the need for third-party indexers. Space and Time, meanwhile, allow indexed on-chain data to be connected with its off-chain counterparts in a format that is tamperproof, relational, and delivered in real-time.

Dapp developers might have 99 problems, but data isn’t one.

Instant Interoperability

One of the key characteristics of DeFi applications is that they’re multi-chain. It’s now common for EVM dapps, for example, to pull pricing data from other layer2s and from non-EVMs such as Bitcoin. Deploying an app with cross-chain functionality built in from day one is now relatively simple thanks to improvements in interoperability including the emergence of cross-chain messaging protocols.

These enable data and assets to be securely transferred between different chains, allowing smart contracts to execute based on actions that occur on other networks. Projects such as LayerZero provide decentralized infrastructure for DeFi dapps to draw data from multiple chains without introducing complexity. It’s one less thing for devs to worry about, allowing them to focus on core competencies in the knowledge that interoperability now comes as standard.

Smart Wallets

One of the greatest barriers to web3 adoption has been the complexity associated with onboarding, particularly when it comes to wallet creation. Private key management may come naturally to crypto OGs, but seed phrases are something that mainstream users have never previously encountered, and it can prove a real barrier to adoption. The idea that 12 words can control an individual’s digital net worth – and that failure to secure those words can result in their wallet being drained – is a responsibility that many users don’t want to be lumped with.

The arrival of smart wallets, which use a variety of technologies including MPC (multi-party computation), is a breakthrough that’s been a long time coming. Now, individuals can get started in web3 without being lumped with private key management. Instead, they can secure their account using web2 methods such as email authentication and 2FA. As a result, one of the greatest barriers to greater DeFi adoption has been significantly lowered, albeit not eliminated altogether.

DeFi devs can now integrate third-party wallets, including smart wallets, allowing users to connect using an authentication method they feel comfortable with. It’s a major improvement in making web3 friendlier for mainstream users.

Making DeFi Less Daunting

In the last three years, many of the technical challenges to creating a successful DeFi application have been resolved. From a developer perspective, better tooling, educational resources, data delivery, and enhanced onboarding have made DeFi less daunting, not just to users but to those tasked with developing the apps that draw upon the characteristics inherent to the blockchain.

While DeFi development is now much more egalitarian, allowing small teams to compete on an even footing with larger projects, problems remain to be solved. One of the trickiest is building a loyal community who are the lifeblood of every successful web3 project. But with the technicals now largely taken care of, devs can spend less time compiling and debugging and more time focusing on perfecting a DeFi dapp that delivers genuine utility.