As an analyst with over a decade of experience in the blockchain and cryptocurrency space, I find the recent collaboration between Magic Labs and Polygon Labs on the cross-chain smart wallet, Newton, to be a significant step towards addressing liquidity fragmentation in the DeFi ecosystem.
In simple terms, Magic Labs and Polygon Labs have unveiled a versatile digital wallet that can work across multiple blockchains. This is part of an effort by these protocols to tackle the issue of scattered liquidity within the blockchain industry.
As stated in an announcement on November 7th, the companies unveiled Newton testnet, a digital wallet specifically designed for the multi-chain settlement layer AggLayer. This new solution aims to facilitate liquidity sharing across multiple blockchains, similar to how HTML and HTTP established standards that created a smooth internet browsing experience.
Newton utilizes the Polygon Cloud Development Kit (CDK) for its construction and aims to provide abstracted smart wallets across chains, free development tools, global liquidity access, and multi-chain launches all through a unified “command line interface.
In simpler terms, liquidity fragmentation refers to a situation where assets and trades are spread out across various platforms or blockchains in the decentralized finance (DeFi) world. This scattering causes inefficiencies within the DeFi system, leading to increased trading expenses and slower transaction rates. Additionally, it makes cross-chain interactions more complex and costlier for users.
Addressing this matter is crucial for enhancing DeFi’s effectiveness and trustworthiness. It’s only natural that it has piqued the interest of numerous protocols and investment companies in 2024.
As a crypto investor, I’ve noticed that Orderly Network is one of the companies working diligently on liquidity integration. Not long ago, they successfully secured $5 million in funding from esteemed investors like OKX Ventures and Manifold Trading. This investment will be used to unify the transaction order book across multiple blockchains, streamlining onchain transactions for a more seamless trading experience.
Axelar’s main focus is on multi-chain solutions, as evidenced by their announcement in October of an interoperability structure. This structure unites both on-chain and off-chain systems that operate across multiple networks.
Sean Li, co-founder and CEO of Magic Labs, asserted that chain unification is an unavoidable reality, much like ACH or SWIFT for the crypto world,” he said in a statement. In 2018, the startup was among the pioneers to present wallet abstraction. Their clientele includes Polymarket, Immutable and Helium.
Magic Labs boasts support from investors like PayPal, Placeholder, Lightspeed, and angel investor Balaji Srinivasan. This innovative company asserts that it has attracted over 35 million users and more than 200,000 developers through its decentralized applications.
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2024-11-07 20:40