Blockchain technologies

Development of smart contracts for DeFi projects

Development of smart contracts for DeFi projects


Development of smart contracts for DeFi projects DeFi

DeFi is a decentralized financial ecosystem in which there are no centralized governing bodies and intermediaries – central banks, states, credit organizations and others. Instead, users interact with each other directly through smart contracts, which allows transactions to be made much faster and cheaper, while maintaining a high level of security.

DeFi projects allow users to make a profit in a variety of ways – issuing secured loans, placing deposits, trading assets, and more. At the same time, due to their reliability and economic benefits, they are in high demand and their popularity continues to grow rapidly: in 2021 alone, the volume of funds in this sector increased by 1210% – from $18.71 billion to $245.22 billion.

Distinctive features of DeFi projects:

  • Decentralization. Assumes that the project is managed by users or a group of people appointed by voting members of the network.
  • Automation. All processes and transactions that occur within a DeFi project are performed by the system itself, without the participation of specific people. At the same time, the history of all operations is available to all users, which ensures maximum transparency.
  • Open source. Products built on open source protocols are more trustworthy because users can determine exactly how they work.
  • Inclusion. This means that most of the services offered by DeFi platforms can be used by anyone, regardless of the country of residence and the financial legislation in force in it. A good example in this regard is the Bitcoin payment system, which is available to everyone.
Development of smart contracts for DeFi projects

What is a smart contract

Smart contract

What is a smart contract Smart contract

A smart contract is a computer algorithm that exactly follows the logic of an agreement between two or more parties to a transaction. Often, they are responsible for the implementation of the entire financial turnover within the DeFi platform.

The process of executing a smart contract is fully automated, which gives the parties to the contract a guarantee of honesty and security, even if they do not personally know each other.

All information recorded in the code of such a contract is encrypted and cannot be used by third parties for their own purposes.

It is also important that smart contracts have high economic efficiency. This is due to the fact that for their conclusion it is not necessary to sign physical contracts, involve lawyers, banks or brokers. The conclusion of the transaction takes place in a matter of minutes, and this requires only the consent of all parties to the contract. Accordingly, it helps to significantly save both time and financial resources.

Stages of developing smart contracts for DeFi projects

Stages of developing

Stages of developing smart contracts for DeFi projects Stages of developing

The creation of smart contracts is a complex process that focuses on ensuring the security and transparency of transactions within the DeFi platform. A whole team of specialists is involved in their production, and the production itself can be divided into several successive stages. Let’s consider each of them in more detail.

Step 1. Information gathering

First of all, specialists need to understand what kind of transactions a smart contract will carry out. To do this, the project is carefully analyzed and an interview is conducted with the customer. After that, developers determine the technical feasibility of the task.

Step 2. Choosing a blockchain

The next stage is the selection of the optimal blockchain platform on which the smart contract will be built. Until recently, the options were limited, and only the Ethereum virtual machine provided the maximum opportunities, but now everything is not so clear.

Of course, the Ethereum platform still retains its leadership, but it is quite slow, expensive and has serious scaling problems. Therefore, it is often preferred by other blockchains, such as Solana, Polygon, Polkadot and others.

Step 3. Select technologies

Various technologies and programming languages can be used to develop smart contracts. Here are the main ones:

  • Languages: Python, C/C++, JavaScript.
  • Frameworks: Hardhat, Truffle, Brownie, Ape WorX.
  • Testnets: Rinkeby, Kovan.

The choice of technology for the implementation of each specific project is carried out by the development team, based on technical requirements and the blockchain.

Step 4. Technical development

When the goals and technologies are defined, the developers proceed to the technical implementation of the tasks and start coding. This can be done from scratch, but it is often better to use the open source templates and libraries that most blockchains ship. This approach saves a significant amount of time and speeds up production.

For example, to develop smart contracts on the Ethereum network, you can use the Zeppelin OS open source platform, which includes tools and services for working in the EVM.

Development of smart contracts for DeFi projects

Step 5. Testing

A smart contract is, by definition, open source software, which means that any programmer can study it and try to find bottlenecks for hacking. To prevent this, the project is carefully tested to eliminate all possible errors and shortcomings.

To perform objective testing, blockchains often provide test networks that allow you to check the correct operation of smart contracts without the risk of losing funds or data.

Step 6. Deployment

The final stage of production is the deployment of a smart contract inside the blockchain, after which it can be used by end users.

It is important that once a contract is published, it can no longer be edited. In the future, in order to improve or optimize it, you will have to create a new version of the project. At the same time, the old one will continue to exist inside the blockchain.

Development of smart contracts for DeFi projects in AVADA MEDIA

Development of smart contracts for DeFi projects in AVADA MEDIA

AVADA MEDIA specializes in the development of blockchain solutions and has extensive experience in implementing smart contracts for various projects, including DeFi.

We have formed teams of specialists who will be able to start performing tasks in the near future.

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The best confirmation of our qualifications and professionalism are the stories of the success of our clients and the differences in their business before and after working with us.

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Successful projects
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