Tap in Tuesday: Interconnected Blockchains w/ Komodo
Kadan from Komodo is a security and interoperability wiz. Since 2011 Kadan has been working on making the world a better place with blockchain. Find out how in today’s AMA below.
DeFi Slate Fam:
Welcome to August!
This past weekend we saw a resurgence in Ethereum, DeFi, and NFT’s.
It’s not much of a surprise as EIP1559 is set to launch this week, drastically changing the way fees are captured on the Ethereum network.
Although Ethereum is trailblazing the DeFi ecosystem, many more blockchains are handling niche applications and unlocking specific use cases once thought of as impossible.
Komodo is focused on connecting these blockchains so they are interoperable and minimal friction exists when traversing between chains.
Kadan, Komodo’s CTO and lead security expert, has been working on blockchain tech for a decade where he has experienced the trials and tribulations firsthand.
Check out his account of interoperability, blockchain security, and all the updates coming to Komodo.
👀 Sponsor Update: Synfutures is a decentralized exchange for trading futures on just about anything. Synfutures leverages synthetic tokens to provide a vast breadth of open and trustless financial products.
Synfutures is built on Polygon Layer 2 where gas costs are minimal so you secure greater profit. Try it out HERE
High-Yield Savings Account & Leverage Your Assets with Aave.
Non-custodial money market protocol leading the #DeFi charge.
Kadan Stadelmann, CTO of Komodo
Kadan Stadelmann is a blockchain developer, operations security expert, and Komodo’s Chief Technology Officer (CTO). He strongly identifies with Komodo’s open-source vision and ideology. Kadan’s dedication to the Komodo project is founded on an unwavering desire to make the world a better place. His experience ranges from working in operations security in the government sector and launching technology startups to application development and cryptography. Kadan started his journey into blockchain technology in 2011 and joined the Komodo team in 2016. Kadan has published numerous articles on Forbes, Cointelegraph, Nasdaq, and Yahoo Finance.
Where do you see Komodo fitting into the crypto ecosystem and how has that vision changed over the last 4 years?
When Komodo was founded in October 2016, the original vision of the project was to create an interconnected blockchain ecosystem where each chain could have full independence yet interoperability. This goes back even earlier to Komodo Founder James ‘jl777’ Lee’s original work on atomic swap technology, which began in 2014.
Komodo’s vision is the same today in 2021, and we have completed lots of groundwork towards achieving it. Unlike other DEXs and interop bridges, Komodo has a truly permissionless, decentralized peer-to-peer solution with Komodo AtomicDEX API. We’ve already integrated Bitcoin, Ethereum, Binance Smart Chain, and dozens of other blockchains.
What are the main differences between Komodo’s AtomicDEX and other popular AMM DEX’s (Uniswap, Sushiswap, etc)?
The main difference is that Komodo is a truly decentralized atomic swap-powered DEX, whereas AMM DEXs add a component of centralization that requires trust.
AMMs rely on liquidity pools, which are often controlled by the project teams of listed tokens. We’ve seen countless examples of rugpulls with AMM DEXs in the past year. These are incidents where new projects create a de facto exit scam by removing liquidity from the AMM DEX. The sad thing is that this kind of Ponzi-like model attracts many users chasing outrageous APY. Many users on those platforms have ended up losing a lot of funds when rugpulls happen.
With AtomicDEX, users are trading via a decentralized order book. Funds are never locked in a smart contract that can be exploited. Atomic swaps are called “atomic” because either the trade is completed (funds swapped) or it doesn’t (and funds aren’t sent back to the original owners). With this design, it’s technically impossible to execute a rugpull on the platform since liquidity isn’t locked or unlocked.
Another aspect that makes AtomicDEX unique is cross-chain, cross-protocol support. AtomicDEX comes with its own non-custodial multi-coin wallet in which users can store thousands of different crypto assets, and then trade them on the DEX. Unlike Uniswap, we’re not limited to the Ethereum ecosystem or reliant upon the use of proxy tokens or wrapped tokens (although they can also be supported). 99% of all cryptocurrencies are natively compatible via AtomicDEX.
Where does Komodo stand on the scalability trilemma? Do most DeFi protocols have this wrong?
Yes, most DeFi protocols today have it wrong. The reality is that many DeFi protocols fail at two or even three sides of the scalability trilemma: scalability, security, and decentralization. If you look at the recent hack of AMM-based THORChain in which 4K ETH was stolen, the protocol failed at security because of insecure smart contracts. What’s more concerning and really ironic is that the network was heavily branded as decentralized and censorship-resistant, but the operators had the ability to shut down the network to apply patches. We see numerous other examples like this in DeFi.
For Komodo’s AtomicDEX, we are obviously trying to tackle the scalability trilemma. We have made the underlying tech layer - Komodo AtomicDEX API - is also a flexible solution for projects wanting to integrate atomic swap technology. The 2020 AtomicDEX stress test proved that it’s possible for the network to reach a high level of scalability at around 10,000 swaps per minute. Compared to trades on AMM-based DEXs like Uniswap, an atomic swap usually typically takes longer to complete, but even that can be customized by adjusting confirmation requirements. In terms of security, AtomicDEX protocol is safer because funds are never locked into a centralized pool or smart contract. The network is also decentralized because anyone can set up a non-relay node or full-relay node.
Do you have any integrations with other DeFi protocols on the horizon?
We are actively working to add new blockchain protocols to Komodo AtomicDEX API, which will soon be extended to AtomicDEX and other GUI applications on the network. One example is the integration of Bitcoin Cash’s SLP token standard.
We’re also in the process of working with a few Komodo ecosystem projects that will introduce DeFi applications for things like lending, borrowing, and options contracts, which will all utilize atomic swap technology. Additionally, we just announced a partnership with Tokel which will bring a full-featured NFT marketplace to AtomicDEX.
At this point, what does the DeFi ecosystem most critically need to push adoption?
As someone with deep experience in OpSec, it’s clear to me that security is lacking in the DeFi space. On the tech side, there are users putting millions of dollars of crypto into DeFi protocols with unaudited smart contracts and somehow hoping that attacks won’t happen - but they are occurring essentially every day. Another challenge is that people who are new to DeFi and aren’t educated on private key security are prone phishing attacks and scams. The lack of a secure technical foundation is troubling but human weaknesses also lead to exploits. We have to remind ourselves that DeFi is a new way to finance, but that also makes it quite risky as there are so many moving pieces.
Where is Komodo headed in the short-term? long term?
In the short-term, we’re currently focused on rolling out AtomicDEX Web (a.k.a. WebDEX). Most DEX users today are using apps in a web browser. Our target is to release the initial version of WebDEX by the end of 2021. This application will be accessible on any screen with the internet, such as mobiles, smartwatches, tablets, and IoT devices.
In the long-term, Komodo is very much focused on expanding atomic swap compatibility to additional blockchain protocols - creating bridges for cross-chain, cross-protocol DeFi.
What do you think about the Ethereum 2.0 upgrades? Do you think the upgrades will be sufficient to keep Ethereum as the dominant blockchain for DeFi?
I think the Ethereum 2.0 upgrades will be a major victory for the entire blockchain industry. If everything goes according to schedule, Ethereum is going to have a positive impact on the market from both a tech perspective and a price valuation perspective.
In terms of Ethereum dominance in DeFi, I would say that won’t necessarily remain true forever. Look at the emergence of smart contract technology and DeFi ecosystems in the past year. Binance Smart Chain and Solana, for instance, practically rose to popularity overnight. In terms of network usability, there are several other blockchains that are probably in an equally good position to provide a similar DeFi experience. It’s just a matter of whether they can garner as much developer adoption and user adoption.
A multi-chain, multi-ecosystem DeFi world is the likely scenario. That’s why Komodo exists. We can’t and shouldn’t just bet on one blockchain to be the ultimate solution. We view the blockchain industry as a collaborative space where many innovators work together - and the AtomicDEX network is the permissionless bridge that connects everyone together.
👀 Sponsor Update: Babylon Finance is an ecosystem of community-built DeFi strategies. Non-custodial, completely trustless and transparent asset management with traceable performance history.
Sign up for beta access and the opportunity to earn $BABL rewards for creating a strategy or just using a strategy. Claim your piece of the action HERE
⚠️ DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. At certain points throughout this post, we might get commission for promoting certain projects, if this is the case we will always make sure it is clear. We are strictly an educational content platform, nothing we offer is financial advice. We are not professionals or licensed advisors.
Liked this post? Share with a friend :)
🚀 Join Our Inner Circle And Become A Certified DeFi Degen!
🚨 Want to learn DeFi from Silicon Valley Investors & Entrepreneurs? Check out the DeFi Masterclass Here!
🌐Check Us Out On Twitter!
🚀Join the community on Telegram Channel to get our free V.1. yield farming guide!
🎤Subscribe to our YouTube channel!
🖼 Interested in NFTs? Check out our new project NFT Slate!
Last week in review:
🎙DeFi By Design EP #42: Oh! Finance! The Lightbulb Moment in DeFi
Check out some previous interviews:
DeFi Slate x TheEther: A social governance experience for Ethereum