Why DeFi Lending Built with Scrypto Will Be Radically Different

Why DeFi Lending Built with Scrypto Will Be Radically Different
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Build robust, secure, and user-friendly DeFi dapps with Scrypto

Radix’s smart contract language Scrypto helps developers create secure DeFi lending dapps quickly and easily. DeFi has exploded in popularity in recent years, and lending is one of the most critical use cases in this area. But smart contract programming languages today fail to empower developers effectively to drive DeFi adoption. To solve this problem, Radix proposes a paradigm-shifting programming language that will make DeFi dapps much easier to build, while also being more secure. 


What is DeFi lending and why it matters

In traditional finance, people borrow funds from a bank or institution using something of value as collateral, such as with a mortgage. The lender will then charge interest on it. In cryptocurrency, lending is one of the most common activities. Depositors lend cryptocurrencies to borrowers in exchange for interest.

Lending is critical in the cryptocurrency market. It creates a bridge between those who have spare assets and those who need them, thus enabling the optimal use of resources. But unlike traditional lending, crypto lending can provide services to users without the involvement of third parties. This decentralized approach has many other benefits besides being more efficient. 

DeFi lending platforms do not require any identity verification, and lenders only need a wallet to communicate with the platform’s smart contracts to start lending. 

In addition, liquidity pools and smart contracts on the blockchain enable DeFi lending. In this way, all the information about transactions, interest rates, liquidity pool size, etc., becomes public information and transparent on the blockchain. As a result, users do not have to worry about the interest rate not meeting their expectations.

Radix’s Scrypto makes DeFi lending easier for both devs and users 

To empower developers, Radix brings an asset-oriented programming paradigm that is powerful, intuitive, and secure. It paves the way for the upcoming waves of developer adoption and dapp innovation needed for the Web3 vision to become a reality.

To do so, Radix has created its own virtual machine called the Radix Engine as an alternative to the Ethereum Virtual Machine (EVM). The Radix Engine enables developers to build lending protocols with ease. At its core, assets are implemented with a Finite State Machine. This makes assets well understood by the platform, enforcing strict behaviors around asset behaviors. In doing so, assets on Radix have higher guarantees, transparency, and reliability. Programming on the Radix Engine is done in Scrypto, the Radix smart contract language. 

What is Scrypto

Scrypto is a language based on Rust, a coding language famous for its capability of creating system-level, low-resource, cross-platform solutions. The most prominent software powered by Rust includes Firefox, Dropbox, and Cloudflare. 

Scrypto inherits the best DNA of Rust, but adds a range of specific functions and syntax for programming with digital assets. What sets Scrypto apart as a smart contract language is its asset-oriented nature. This means digital assets, such as tokens, are native first-class citizens of the language. As a result, digital assets on Radix behave like physical objects, which implies that they behave in the way we intuitively expect them to. This makes them easy to understand, therefore, taking asset security to a whole new level.

Benefits of using Scrypto

In Scrypto, tokens aren’t smart contracts. Instead, they are a specific type of resource – platform-native “physical” assets. So how’s that different from Ethereum’s ERC20 tokens?

A token on Ethereum is actually a list of accounts and balances inside a smart contract. So when a transaction happens, messages are sent to the smart contract to update the balance. Messages are the EVM’s only capability for transferring assets. 

To create a new resource on Radix, such as a token, developers need to use a built-in Scrypto function where they can specify the parameters they want. Since Radix Engine requires that resources always be “physically” located somewhere, the token will be either put in a temporary container called a bucket, or a more permanent resource container called a vault.

Unlike in the Ethereum token scenario, these containers on Radix are not just variables that hold a number. Instead, they behave like actual containers that resources can be put into or taken from. 

In short, the biggest benefit of this approach is that it greatly improves developer efficiency and the security of digital assets, as assets in Scrypto are a first-class feature built into the language itself. Developers no longer have to program the logic for how tokens behave themselves, which if they get wrong, can lead to disastrous multi-million dollar hacks. Radix has put together an extensive article explaining the difference between asset-oriented and message-only approaches.

Click the link below to read it in depth.

A quick look at how to develop a dapp on Radix 

Scrypto suits DeFi development particularly well, because it is secure, straightforward, and highly efficient. It allows developers to focus on building business logic and user-friendly features instead of spending up to 90% of their time on validation and testing

Now that we’ve learned about the power of Scrypto let’s take a look at what dapp development on Radix looks like via the video below.

Accelerate Web3 adoption with Radix and Scrypto

Developers are the backbone of a healthy and vibrantly growing Web3. Therefore, only by empowering them with powerful and easy-to-use tools will more developers join in the building of Web3.

With Radix’s unique DeFi full stack, millions of developers will have the muscle and confidence to build innovative, revolutionary products that support a thriving global DeFi ecosystem.

On February 20, 2023, Radix kicked off a Scrypto challenge around DeFi with $50,000 in XRD prizes up for the taking. The event encourages any ambitious developer to participate and develop initiatives focused on lending dapps. Click the button below to access information on how to get involved.

Join the Radix Developer Program to get access to resources, exclusive events, rewards, and more.

Learn more about Radix

Disclaimer — This is a sponsored article. DappRadar does not endorse any content or product on this page. DappRadar aims to provide accurate information, but readers should always do their own research before taking action. Articles by DappRadar can not be considered as investment advice.

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