Innovative and revolutionary, Massa's autonomous smart contracts open a new page in the history of decentralized finance. Based on a new technology, these self-executing smart contracts push more less decentralization, efficiency and complexity of DApps. But how can they affect DeFi?
Why autonomous smart contracts are the future of DeFi?
Growing rapidly in recent years, decentralized finance unfortunately still presents some weaknesses which slow down the adoption of DeFi platforms by professional traders and institutional clients. These weaknesses are of various kinds.
This concerns, among other things, the dependence of DeFi protocols on certain external entities for the execution of transactions or even for liquidity management. The limited functionality of DeFi platforms also represents another type of challenge that sometimes deters users of decentralized exchanges (DEX). And this is precisely what differentiates centralized exchanges from decentralized exchanges.
Centralized exchanges have, as their name suggests, full control over all order books and matching engines. They therefore have more ease in offering a wide variety of order types. They give traders access to more advanced functions, which allows them to have better control over their positions and better organize risk management.
However, when you know the philosophy that supports the creation of cryptocurrencies, centralization is not an ideal. Moreover, on centralized platforms, security risks (hacking attempts, insider trading, etc.) are significant.
Unfortunately, the decentralized exchanges which represent the cornerstone of DeFi do not allow the full potential of decentralized finance to be explored. While they facilitate token trading, the majority of current decentralized exchanges only support basic market orders. They cannot execute complex operations without third-party intervention or an external trigger. The reason ? They are not autonomous.
Professional traders therefore do not find the trading functions adapted to their profiles. And this is why autonomous smart contracts, by tackling the challenges of current smart contracts, are emerging as the future of decentralized finance.
How are autonomous smart contracts revolutionizing DEX business?
The advent of autonomous smart contracts puts an end to the limitations that hamper the trading experience on decentralized exchanges. More complex and capable of executing without manual intervention or without the intervention of an off-chain bot or a centralized oracle, this new generation of smart contracts is completely revolutionizing DEXs. Thanks to them, DEXs will be able to offer:
- advanced trading functions (stop loss, take profit, limit order);
- autonomous liquidity management based on market conditions, which helps mitigate impermanent losses and optimize capital efficiency;
- the autonomous adjustment of interest rates based on supply and demand;
- automated liquidations of guarantees in the event of borrower default or in the event of under-collateralization, which reduces the risk of the appearance of bad debts.
Clearly, autonomous smart contracts Massa thus improve the decentralization, functionality offering, autonomy, flexibility and user-friendliness of DeFi platforms. This notable advance will have the direct consequence of attracting a greater flow of users to these platforms and in turn increasing the overall liquidity and performance of the DeFi ecosystem.
The capacity of DEXs, Auto Market Makers (AMM) and that of lending and borrowing platforms, fundamental components of decentralized finance, will therefore be significantly improved. We can't wait for the Massa blockchain mainnet to be unveiled soon and for Massa's autonomous smart contracts to be deployed there. Quickly find Massa with their incentive program to win lots of rewards.
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