Meet Clover, the next generation of DeFi on PolkaDot and Kusama

DeFi, or Decentralized Finance, has been one of the biggest catalysts of the recent crypto bull market. From stablecoins, lending, trading, financial derivatives and insurance protocols, DeFi projects have created new business models for innovations in the financial system. The total market value of current DeFi projects has grown exponentially from nearly $ 700 million in early 2020 to more than $ 60 billion today.

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However, the traditional financial system remains reluctant to take on many of these projects because the blockchains they work on are either too slow, too expensive, or too centralized. Ethereum, for example, has an average transaction fee of $ 15 to $ 50 and can go up to $ 300 during peak hours. This makes running daily financial applications impractical. There are centralized alternatives, but centralization poses challenges in building trustworthy financial instruments.

A new set of offerings is slated to hit the market this month to help build DeFi, which is both decentralized and affordable, based on the Polkadot network as well as its “sister” test network, Kusama.

Polkadot, developed by Ethereum co-founder Gavin Wood, aims to solve the problem of high gas charges by providing a heterogeneous multi-chain exchange and translation architecture that allows custom sidechains to connect to public blockchains . As a shard-multichain network, Polkadot is able to process many transactions in multiple chains in parallel, eliminating the bottlenecks that existed in legacy networks that processed transactions one at a time. The PolkaDot ecosystem includes a number of DeFi applications that allow all existing Layer-One solutions and applications to communicate with one another.

Of the upcoming PolkaDot network projects, three infrastructure projects have received the most attention from investors: Acala Network (a DeFi hub on PolkaDot), MoonBeam (a smart contract platform on PolkaDot) and Clover (an operating system Parachain on PolkaDot).

As a non-technical participant in the blockchain ecosystem, I wanted to further understand the implications of this technology and was privileged to sit down with the team at Clover. The development team is led by Toronto-based computer scientists Viven Kirby and Burak Keceli, while the company’s operations are led by Norelle NG, an aspiring female force who was previously a partner at Bithumb Holdings and head of client relations at Amber Group. Clover is backed by some of the top investors in the industry including Polychain Capital, Alameda Research, OKex Block Dream Fund, Hypersphere Ventures, Moonwhale Ventures, Kyros Ventures and is made available to the public through the popular retail token platform CoinList.

Clover Finance aims to create the lightest, fastest DeFi cross-chain infrastructure on Polkadot to meet the speed and cost challenges in the current DeFi ecosystem. When looking for alternatives, Clover chose Polkadot because, as a shard-multichain network, Polkadot is able to process many transactions on multiple chains in parallel, removing the bottlenecks that existed in legacy networks that processed transactions one at a time . For the everyday user, these improvements in the speed of even the most complex transactions between multiple applications will be felt.

Clover is a smart contract platform that enables Ethereum developers and projects to use their … [+] Contracts on Polkadot.

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Clover also combined the power of Polkadot with Substrate to realize low gas fees, fast trading experience, and anonymity for its users, as well as Chainlink to implement Oracle to pull trustworthy off-chain data to enable credit, credit, and more. To achieve an even higher level of interoperability, Clover developed “SPV chain simulation technology” to enable seamless cross-chain communication across financial networks. This element is valuable for developers who want to develop new and innovative financial applications that connect different stakeholders, especially in the traditional financial system.

As part of Clover’s secret sauce, Clover uses BIP Schnorr compatible threshold signatures to ensure a high level of decentralization. Many other alternatives either have semi-federated governance or require increased transaction costs.

“We hope that by improving the overall user experience, the availability of layers of infrastructure like Clover can become the perfect gateway for new users to participate in decentralized finance,” said Norelle Ng, co-founder of Clover.

Clover brings together a range of products for an integrated DeFi experience from a single source, starting with the Clover Multi-Chain Wallet, Clover Explorer and Clover Scan.

The Clover Wallet allows users to connect to multiple public chains at the same time, so users can view multiple assets without switching networks. The product will initially support Ethereum, Polkadot, Kusama, Binance Smart Chain, Avalanche and Fantom. Users are given a cross-chain compatible address for both Polkadot and Ethereum-based transactions.

“We believe that a bespoke DeFi infrastructure on Polkadot and Kusama will provide cross-chain compatibility, interoperability, and a seamless multi-chain user experience that users are currently lacking,” said Viven Kirby, co-founder of Clover.

The process of launching a “Parachain” project on the Polkadot Network is very competitive and requires significant capital. As companies compete for their place, most choose to start on Polkadot’s sister network, Kusama. Kusama is considered to be the CanaryNet network for Polkadot, and it is expected that many of the projects that do not get a place on Polkadot will continue to live on Kusama.

To follow suit, Clover will launch his sister network Sakura on the Kusama mainnet. The launch includes a native decentralized exchange and a staking derivatives product to enable the emerging internet bond market. Sakura will also encourage developers who are familiar with both the Polkadot development framework and the Ethereum development tools to build additional projects on the network.

“Clover and his sister, which Sakura offers, provide a powerful smart contract platform that enables Ethereum developers and projects to migrate their contracts to Polkadot. We believe that Clover will become the chain agnostic parachain candidate to support as many ecosystems as possible running DeFi projects, ”said Helena Liu, investor at OKex Blockdream Fund.

Over the next few months, blockchain investors and network participants will be able to participate in several offers on PolkaDot as a completely new ecosystem comes onto the market. While innovators continue to seek to correct the flaws in the financial system, it remains to be seen whether new developments on Polkadot and Kusama will be able to improve the DeFi ecosystem to stand up to the scrutiny of traditional investors.