DeFi and a expanded design space exploration

Technical Vision Forum
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Context
Adoption is a problem for the blockchain industry and the lack of dApps that are useful in solving/facilitating society’s current challenges contribute for it. [1]

Despite its 15 years, blockchain didn’t really prove its value in domains other than DeFi.

Cartesi’s unique vision and contribution

Cartesi, with its unique design for a execution layer based on a VM running a Linux operational system, can contribute providing a robust development environment, full of well known development tools, that can allow researchers and developers to explore much more efficiently all these unexplored domains (other than DeFi) what would be very hard, or even impossible, to be done with other existing solutions.

Imagine what can come when hundred/thousand of developers start hacking, exploring and experimenting taking benefit of the expanded design space that Cartesi provides… This seems to be a promising path for Cartesi and the project will need to continue investing on internal experimentation and also promoting public hackathons to create this huge community of developers, but may probably take time until useful dApps come.

Adapting the vision to the current reality

The present topic brings a proposal for Cartesi to also invest, in parallel, in the DeFi vertical to bring potentially awareness and visibility more quickly, because this is a more consolidated domain for blockchain.

This seems to be the adoption strategy that other projects are tacking. For example, EigenDA when announcing its launch partner program wrote on X [2]:

To kick things off we’ve written a case study on @LayerN_Official and how it uses EigenDA to superpower its rollups for DeFi.

Another example comes from Starknet foundation that recently announced a huge investment “across multiple initiatives to drive the adoption and growth of the Starknet blockchain”, but one specific for DeFi. [3]

3/ On-Chain Incentives for DeFi
We’ve allocated an initial 50M STRK to explore the direct, indirect and retroactive incentivisation of activity on DeFi protocols by boosting liquidity, volume traded and general growth of the DeFi landscape on Starknet.

Bringing this to Cartesi, maybe dApps like DCA.Monster (see also this discussion on Discord) can have a more effective impact as the second Cartesi dApp on mainnet than other in not well established domains. To make this possible, the roadmap should also prioritize features to support effective experimentation/development on the DeFi vertical.

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I fully support this vision! Besides DCA.Monster, maybe we should also consider a more serious approach to LambaDEX, despite its experimental nature (e.g., make it available and usable on testnet even if still experimental, and invest in UX for it)

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This aligns with my vision too, and seems to resonate with other perspectives as well, judging from what I’ve read. I’m in favor of supporting more end-user products and functional tangible dApps to demonstrate the tech capabilities in action through a ‘showing, not telling’ approach.

And thank you, Claudio, for your very concise and digestible thread. You take it a step further by narrowing down this vision to the DeFi domain, which, keeping it real, is the one that has somehow achieved popularity and meets a clear demand. I look forward to reading more perspectives from all our community members.

In the meantime, I express my support for your proposal to considerate new features needed for effective experimentation and development in this DeFi vertical, bringing dApps to life and consequently, fostering a user-base in our ecosystem.

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Claudio,

Great post and very nice vision! I fully support the necessity of our protocol support functionalities that go beyond the plain and simple VM. We see this more and more, especially in the gaming vertical, where projects are coming to fill the gaps in specific tailor-made solutions to address game dev pain points.

I’m just in doubt if DeFi or gaming should be prioritized. Ecosystem growth has a very mature vision of the game vertical and is not far away from having a clear understanding of what should be done as a convenience in this vertical.

I do believe, some conveniences will touch more than 1 vertical, for example, the necessity of lower latency and better DA capacity. In that sense, espresso integration might be a very high priority

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Hey Bruno!
The way I see now, gaming is a vertical that fits in the exploratory (medium to long-term) part of the vision. I do believe that in this exploratory part, gaming is the most promising one. DeFi is the short-term part of the proposal (more solid ground, some well known problems to tackle and already existing user base to mention some aspects).

The idea is to find a good balance like in a traditional investment wallet in which we try to not put all eggs in the same basket.

Hopefully some important features to be prioritized (e.g. Dehashing) can benefit both parts of the vision.

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I forgot to mention in the proposal the Gnosis case, which seems to be pivoting from gaming to payments.

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@bruno.maia I am on the same page as @claudio.silva here. I also see gaming as a very interesting vertical, but mostly from an experimentation angle. IMO part of the excitement there comes from game designers experimenting with web3-specific game dynamics.

I recommend this article that discusses the issues and potentials of on-chain games: The Open Problems of Onchain Games. Its conclusion struck me hard when I read the conclusion, which is that it is still open to debate whether it really makes sense for games to be fully on-chain, partially on-chain, or not at all.

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I fully support this vision. The idea is to connect to the current narrative of DeFi and be an asset to current DeFi projects. Existing blockchain developers need to understand that they can do what they currently do on traditional EVM blockchains and see what more they can offer with Cartesi. It’s the best way to attract them; they need to realize that not using Cartesi is limiting their possibilities. I know that Cartesi has chosen to be an entry point for Web2 developers, but it should be primarily appealing to current Web3 developers.

In line with this vision, it’s essential that Cartesi VM allows the creation of DApps like (See this proposal), which can only be created when Cartesi VM allows access to external data via APIs like Alchemy. Video games are a good niche, and I agree, but they are aimed at a particular group of customers. In this proposition, I can easily see video game projects on the launchpad, where there would certainly be high participation. But the idea is to create a DApp that would be the heart of the ecosystem. This DApp needs to appeal to all types of users without targeting a specific niche.

The idea of a DEX analysis tool combined with a launchpad is something general where everyone in the blockchain universe would find their interest. And the launchpad allows both developers and investors to create and invest in ideas with more specific and niche goals. All in a sustainable user-funded model.

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A known problem in DeFi and a potential solution to be explored

First of all, we all know DEXes are one of the most popular, tried-and-true applications in web3. They’re the basis of DeFi and single-handedly catapulted the 2021 DeFi summer with the introduction of AMMs and all advances in open finance that come with them.

But does this mean that we’ve already done everything there is to be done about DEXes? Definitely not. The usual way DEXes are implemented is probably not the best way.

The problem with DEXes is that they usually use an automated market maker or AMM. This is great for decentralization, composability, and many other reasons… but it’s bad for users who want to be expressive of their trading preferences.

On an AMM you either trade at the price it gives you or you don’t. There’s not a lot of customization. No stop losses, no limit orders, no interesting derivatives.

That’s why many still prefer order book exchanges even though they’re centralized. DApp-specific chains allow developers to come up with scalable order books that serve a large number of transactions.

However, in a decentralized system, looping through many orders in an order book to settle a transaction is not advisable. What if a data structure could improve this? What if there’s a better way to store DEX information scalably?

https://twitter.com/cartesiproject/status/1735253461095039285

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Advancing in the dehashing feature design on the DA experimentation workfront.

  • This experiment is already exercising the use of the Dehashing Device (for now, just a quick hack illustrating how it would be used). My idea is that with other examples (Syscoin, IPFS, hopefully EigenDA), we can narrow down what we think is reasonable and start to actually implement it for real
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Besides DCA.Monster which submitted to L2Beat as a L3 project, we now have another DeFi DApp powered by Cartesi: CarteZCash.

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I’m in total support of this new vision honestly., we could also consider other approaches to LambaDEX, even though it’s taking seriously sometimes.