Radix DLT (distributed ledger technology) is a full-stack layer-1 protocol that makes it easy for developers to build and scale decentralized finance (DeFi) applications without the risk of network congestion, smart contract hacks, and exploits. The Radix Engine is a scalable and secure execution environment that doesn’t compromise on composability. The Radix DeFi platform offers several alternatives to layer-1 protocols that are not suitable for the large-scale adoption of DeFi. The introduction of the Radix token (XRD) comes in line with the Olympia Mainnet launch. This marks the introduction of the ERC-20 e-Radix token (eXRD token), along with the foundational technologies that will be the basis of all updates to the protocol. Moreover, Radix makes it easy for developers to build and launch scalable decentralized applications using high-quality templates, or “DeFi Lego bricks”.
In this article, we’re going to dive deep into the Radix DeFi ecosystem. We’ll explore the Radix Engine, the XRD token, and the concept of DeFi Lego bricks. Plus, we’ll look at the Cerberus consensus mechanism, the Radix Component Catalog, and the Radix Developer Royalties System.
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What is Radix DLT?
Radix DLT (distributed ledger technology) is an integrated technology solution addressing common issues that create barriers to decentralized finance (DeFi). Also, Radix states that it is “the only decentralized network where developers will be able to build quickly without the constant threat of exploits and hacks”. As a layer-1 protocol, Radix optimizes cross-shard synchronicity, enabling multi-chain scalability without compromising on composability or security. Plus, the Radix developer community receives rewards for any improvements made to the protocol using the native XRD token.
Radix addresses four key issues developers face when building distributed ledger technology (DLT) and decentralized finance (DeFi) applications. To achieve mass adoption, builders of decentralized applications (dApps) must be able to:
- Minimize smart contract exploits.
- Create interoperable applications faster.
- Provide incentives to foster a decentralized community of developers.
- Scale applications without reducing composability.
Addressing each layer of the DeFi stack one by one, Radix is creating a platform that allows innovation in DeFi to thrive by providing developers with a purpose-built environment to confidently create next-generation smart contracts while minimizing the risk of hacks, code failures, and exploits.
Starting from the ground up, Radix uses the byzantine fault tolerance (BFT)-based Cerberus consensus protocol to allow DeFi to scale without obstructing composability.
Composability – DeFi Lego Bricks
Generally speaking, in decentralized finance (DeFi), the term “composability” refers to the resources used to create platforms and their ability to be reused. A term that has become synonymous with this is “DeFi Lego bricks”. This means that resources within a DeFi protocol are modular and can work in conjunction with existing applications or for creating new protocols and applications. Moreover, composability allows applications to interact with each other, just like DeFi Lego bricks, and is essential for developers to build applications quickly.
Rather than writing every line of code from scratch, various open-source code elements can serve as building blocks to create new DeFi applications. For example, many open-source templates are available through OpenZeppelin. This includes ERC-20, ERC-721, and ERC-1155 token standards, alongside templates for decentralized exchanges, marketplaces, and polling applications
Cerberus is the consensus protocol Radix uses. Named after the three-headed dog in Greek mythology, the Cerberus consensus protocol takes an innovative approach to decentralized DLT consensus using a parallelized BFT (Byzantine Fault Tolerance) consensus process. Using Cerberus, all transactions are composed atomically across multiple shards.
This is a crucial element for scalability if DeFi is to achieve mass adoption and serve billions of users. Moreover, as the number of nodes throughout the network increases, network throughput also increases. This is thanks to the Radix Engine application layer.
The Radix Engine is a development environment that minimizes the risk of smart contract hacks and exploits. Also, the Radix Engine serves as a decentralized “self-incentivizing developer ecosystem” to foster the growth of a community based around Radix’s developer tools.
Designed specifically for “the creation of logic that defines predictable, correct results on-ledger in response to requests”, the Radix Engine derives its programmability from Finite State Machines (FSMs) used in mission-critical systems that require predictable correctness at all times. The smart contracts that the Radix engine creates are aptly named “Components”.
Two of the most innovative features of the Radix Engine are the Component Catalog and the Developer Royalty System.
Radix Developer Royalties System
The Radix Developer Royalties System serves as an incentive for developers to deploy applications on Radix. The automated on-ledger system rewards developers for building smart contracts for decentralized finance (DeFi) on Radix DLT. In turn, this has the potential to create an automated decentralized autonomous marketplace for Radix Components.
Radix uses a type of smart contracts known as “Components”. Components behave more intuitively than Ethereum-based smart contracts, allowing for consistent, predictably reliable outcomes. Furthermore, Components act as DeFi Lego bricks that can easily integrate into other applications.
The creation of Components is possible via a programming language known as Scrypto. Scrypto is a functional programming language that should be familiar to many DLT developers.
Before a Component becomes available to the network, it automatically enters the Component Catalog. The Component Catalog is an on-ledger registry of inactive templates or “DeFi Lego bricks” available for anyone to use as templates or building blocks.
Components within the Component Catalog are activated for use when a developer instantiates them from a Component template. Once active, these Instantiated Components can apply to an unlimited number of applications and will act in the same way each time. This is particularly useful when creating multiple Components with the same parameters. Moreover, achieving instantiation is made simple using an application programming interface (API), requiring no code. As such, any developer can quickly and safely execute smart contracts or issue assets without having to learn the Scrypto programming language.
The Radix Token (XRD)
The Radix token (XRD) is the native token of the Radix DLT network. The XRD token can be staked as part of the Radix Delegated Proof of Stake (DPoS) mechanism. Plus, the XRD token is burned to pay for transaction fees throughout the network. XRD tokens are the only valid unit of exchange for transaction fees within the network.
With a maximum supply of 24 billion XRD tokens, Radix DLT holds 10% (2.4 billion) for future project development. Moreover, another 10% allocation is towards the future use of stablecoins on Radix. A little over 10% (2.79 billion) of tokens goes to the Radix Foundation, the non-profit arm of the Radix DeFi ecosystem. This is with the intention of supporting the Radix Ecosystem over the coming years. Furthermore, 50% of the XRD token hard cap is for network emission rewards, introducing 300 million XRD tokens into circulation each year. Also, little less than 15% of XRD tokens (4.41 billion) were initially allocated as e-Radix tokens, or eXRD tokens.
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E-Radix Tokens (eXRD Token)
When Radix first launched the XRD token, it was deployed on Ethereum as an ERC-20 token. For an up-and-coming project with a mainnet still in development, deploying an initial ERC-20 version of a project’s token is becoming an increasingly common practice across the blockchain development space. This allows projects to introduce their tokens on the largest smart contract-enabled blockchain, operable with most crypto wallets, exchanges, and platforms in the industry. Then, token holders can convert their ERC-20-based assets to the project’s native token standard upon the mainnet launch. However, Radix is operating slightly differently.
Upon the Olympia Mainnet launch (which we discuss further on), the XRD token became live on its native network. However, the ERC-20 based XRD tokens remained on the Ethereum blockchain, becoming a wrapped version of the XRD token, e-Radix, or eXRD token. eXRD token holders can swap their tokens at a 1:1 ratio for the new and native XRD token. Both tokens hold the same utilities and value. But, the original ERC-20, now eXRD token, is compatible across the Ethereum ecosystem. Moreover, eXRD token holders can seamlessly exchange their assets for XRD tokens via Instabridge. Instabridge is a Radix-created XRD token bridge connecting the Ethereum and Radix ecosystems facilitating 1:1 token exchanges both ways.
There is no expiry date for e-Radix token holders. Users are free to exchange between XRD tokens and eXRD tokens at any time.
Why Use Radix DeFi?
For decentralized finance (DeFi) to truly achieve mass adoption, applications must seamlessly facilitate interoperability. Developers must be able to communicate and build quickly without compromising on security. Also, multi-chain decentralized applications (dApps) must be fast, secure, and resistant to exploits and hacks. Furthermore, developers must have access to the highest-quality tooling and chain-agnostic programming languages to enable the fastest, safest development of these next-generation DeFi applications.
Radix removes much of the friction that prevents seamless cross-chain interoperability between dApps and protocols on different blockchains. This creates an ideal environment for developers to build versatile cross-chain applications, allowing DeFi to achieve its full potential. Furthermore, Radix provides a secure environment with diverse tooling so that developers can build, test, and scale dApps without compromise.
By removing the barriers that limit the adoption and expansion of DeFi, Radix can address the technological requirements for the future of traditional finance and decentralized finance (DeFi). Moreover, the full-stack approach taken by Radix is reimagining distributed ledger technology (DLT), executable on-ledger code, consensus, application development, and developer incentives.
Olympia Mainnet is the initial release of the Radix Public Network. It lays the foundations for the development of the Radix DeFi ecosystem and introduces the core Radix technologies that all future developments will build on. Also, Olympia marks the introduction of the native XRD token and three pieces of software.
- Radix Node is the software that operates on the Radix Public Network. Available for Windows, Mac, and Linux, this software operates in one of three modes once installed. These are Validator Node, Full Node, and Archive Node.
- Radix Desktop Wallet is the flagship wallet for storing, staking and transacting with XRD tokens. Using Radix Desktop Wallet, the Radix DeFi community can easily stake and unstake XRD tokens.
- Radix Explorer is a tool that lists all registered validator nodes available for staking, including information about each validator that could help inform stakers about which validator they want to stake to.
Radix DLT Summary
In summary, Radix DLT is making decentralized finance (DeFi) scalable by providing a highly composable, full-stack distributed ledger technology (DLT) solution that can scale without compromise. Also, the native XRD token helps secure the network alongside being the sole unit of exchange for transaction fees in the ecosystem. Moreover, the Ethereum-wrapped ERC-20 version of the token, e-Radix, or eXRD token, is seamlessly operable with all decentralized finance (DeFi) applications in the Ethereum ecosystem.
The Olympia Mainnet allows for XRD to operate on its native network. Additionally, Olympia Mainnet introduces the Radix Explorer, Radix Desktop Wallet, and Radix Node. Radix Node is a software allowing users to choose how they prefer to help secure the Radix Network. Moreover, with the Radix Engine and highly versatile “DeFi Lego bricks”, Radix is changing the game for developers of DeFi applications.
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