What is composability in DeFi?

December 6, 2023 Coin Telegraph

Composability in DeFi refers to the ability of various protocols and smart contracts to seamlessly connect and interact, akin to building blocks.

Importance of composability in the DeFi ecosystem

Composability acts as a catalyst for growth, propelling decentralized finance’s ongoing development and growth.

In decentralized finance (DeFi), composability refers to the ability of various apps and protocols to seamlessly communicate with each other, allowing their building blocks to be combined and integrated to create new functionalities or financial services. This interoperability is similar to Lego blocks in that different protocols can be assembled and flexibly combined.

The significance of composability in the DeFi ecosystem lies in stimulating innovation by allowing developers to quickly create innovative financial products using preexisting protocols.

Composability also improves efficiency and liquidity by enhancing the utility of assets across multiple applications.

Components of composability in DeFi

Composability in DeFi comprises several integral components that form the backbone of its interoperable and modular nature. These include smart contracts, interoperability and token standards, lending and borrowing protocols, APIs, and SDKs.

If good UX is like driving auto, Web3 is ‘driving stick’ — UX designers

July 13, 2023 Coin Telegraph

0xDesigner

The high stakes of crypto applications mean developers often need to prioritize security — but that comes at the cost of poor user experience.

The current Web3 user experience (UX) is akin to driving a manual transmission car — there’s more control, but most users will find it unnecessarily clunky, according to several UX designers.

Over the years, discussion around mainstream adoption of Web3 has centered around the need to improve crypto’s user experience and “ease of use.”

However, in a July 12 tweet, Web3 UI/UX designer 0xDesigner argued that certain properties of blockchain make it challenging to build easy-to-use Web2-like applications.

Web2 vs Web3 UX

I was asked by a reporter from a crypto publication about the disparity between web2 and web3 UX. It’s a meaningful line of questioning that isn't covered enough. So I’m going to share some half-baked thoughts in hopes that it triggers more discourse.

Why is…
— 0xDesigner (@0xDesigner) July 12, 2023

According to 0XDesigner, one of the main issues with cryptocurrency applications is that every action is “irreversible” — there’s no “undo button” on the blockchain and mistakes are expensive. They added:

“Think of it this way: Web2 is like driving an automatic car. It’s straightforward; you get in, press the pedal and off you go. Web3, on the other hand, is more like driving stick.

“You need to understand the gears, the clutch and constantly monitor the tachometer; otherwise, you’ll damage the transmission or stall the car,” they added.

Speaking to Cointelegraph, 0xDesigner argued most of the “broader population” may not even care about the sovereignty (control and ownership) that blockchain offers.

The Web3 UX paradox

Thomas Ling, a former user interface (UI) designer for blockchain tech firm Immutable and Web2 gaming studio Riot Games, told Cointelegraph that UI is typically more simple in Web2 because with Web3, ownership and control are vested with the user.

While this makes Web3 unique, it adds more complications on the backend, Ling explained:

“Where a Web2 app may only need to show one step out of five, a Web3 app needs to show all five in order for a user to achieve an action and retain the value proposition of Web3.”

Because of this, Web3 UI/ UX designers are “limited” in the way that they can make “magic” happen in creating an easy-to-use application, explained Ling.

Got me thinking about UX/UI in crypto, oh and GM pic.twitter.com/ayEIbWQPDg
— irena (@irena_clarke) July 4, 2023

Ling said this is particularly challenging when product teams are faced with making design decisions with tradeoffs:

“It’s a bit of a paradox — by making Web3 flows simpler, we have to take away some control from the user, which starts to take away from the point of Web3.”

0xDesigner believes another problem lies in the lack of priority given to user experience in Web3 projects.

“From what I’ve seen, most product teams are engineering driven. The designer-to-developer ratios are lower than in Web2. That usually results in more technical solutions.”

This could be because of the high stakes in Web3, especially regarding financial applications, meaning that more staff will be focused on security and error prevention.

0xDesigner believes mass adoption of Web3 will come when there’s a truly useful application of it, like gaming and music.

“The adoption problem is usefulness first, not usability. It needs to be a good game or good music. I don’t think it will matter that it’s Web3.”

Cryptocurrency applications should also “feel invisible,” they added.

“I think the next crypto cycle will be driven by consumer apps that are powered by crypto, but users won’t know it’s crypto unless they look closely.”

In a contrasting view, Messari CEO Ryan Selkis downplayed the problem of UX/UI on adoption during a July 11 Twitter Spaces.

Just under 1 hour until our next On the Road to #Mainnet2023 Spaces! Join @twobitidiot, @bloomberg_seth & @mikeykremer as they dive into current crypto product solutions and their usefulness.

https://t.co/StNxv2kOoG pic.twitter.com/DzS8Vuxasg
— Messari (@MessariCrypto) July 11, 2023

“The wallets are fine, there’s definitely some things to be desired [...] but it’s really a lot of the off-chain, social and regulatory things that cloud long term adoption.

Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.

Magazine: Web3 Gamer: Apple to fix gaming? SEC hates Metaverse, Logan Paul trolled on Steam

Composable Finance raises $7M for cross-chain and cross-layer DeFi interoperability

June 1, 2021 Coin Telegraph

Composable Finance raises M for cross-chain and cross-layer DeFi interoperability

Coin Telegraph

Composable Finance has secured funding from several blockchain investment firms as it seeks to foster greater interoperability in the emerging decentralized finance market.

Composable Finance, a DeFi interoperability protocol has announced a $7 million raise backed by 16 notable blockchain investment firms.

According to a release issued on Tuesday, the funding round was led by Advanced Blockchain AG and Rarestone Capital. Other participants included Alameda Research, Spartan Group, Divergence Ventures, and Blockchain Capital, among others.

Composable Finance is seeking to enhance DeFi synchronicity via a two-pronged approach to interoperability on both Ethereum (ETH) and Polkadot (DOT) with the latter forming a basis for further cross-chain interactions.

According to Cosmin Grigore, CEO of Composable Finance, blockchain interoperability will push the emerging technology into “a new world of possibilities.”

Given the asynchronous nature of the blockchain space, bridging is often required to port liquidity across layers and chains. Indeed, as previously reported by Cointelegraph, cross-chain composability has been seen as a panacea to the liquidity fragmentation issue in the DeFi space.

In a conversation with Cointelegraph, 0xbrainjar, a Composable Finance developer summarized the project’s end goals, thus:

“We see there being a major shift in Ethereum with the popularity of several layer 2s and side chains - there will need to be an easily accessible glue-code middleware infrastructure for people to be able to build cross-layer applications (ex. ZkSync <> Optimism).”

According to 0xbrainjar, such composability could be essential for developing cross-layer strategies for activities like flash loans in the DeFi space.

As part of the announcement, Composable revealed that it is in the final audit stage for several Layer-two infrastructure solutions. Meanwhile, the project is also looking to debut its Polkadot solutions before the end of June.

With the Polkadot-based solutions essential to the project’s cross-chain interoperability plans, Composable is reportedly utilizing a unique strategy for parachain auctions. The project will reportedly deploy a vault strategy that allows users to deposit Ether or other ERC20 tokens.

The bonded ETH or ERC20 tokens will be used for yield farming with 50% of the gains returned to the users and the other half used to purchase DOT or Kusama (KSM) for the actual parachain auction.

Detailing how the project’s Polkadot solutions will feature in the project’s blockchain composability plans, 0xbrainjar remarked: “Using the Polkadot ecosystem, we will be able to allow developers from different ecosystems to be able to deploy smart contracts from different layer 1s on the same location, and have them interact with each other.”

composability