Crypto Aid at Unprecedented Speed is Defi’s Watershed Moment
War has put crypto in the spotlight like never before. We can have an even greater impact with easier-to-use applications, says Susruth Nadimpalli, the the co-Founder of Catalog.
Just two days after Russia invaded Ukraine on February 24, the Ukrainian government put out an urgent message on Twitter that it was accepting financial aid for its support, in cryptocurrencies including Bitcoin, Ethereum and USDT.
The outpouring of financial support that has followed has been unlike anything we have ever experienced. To date, the Ukrainian government says it has collected almost $67 million in crypto donations. Alex Bornyakov, the country’s deputy minister for digital transformation, has said that “crypto is playing a significant role in Ukraine’s defense” and has thanked the “crypto community for this unprecedented support.”
War and crypto
This crisis has illustrated on a massive scale the power and promise of decentralized finance by giving the Ukrainian people instant access to financial aid. Freedom has always been the foundation of decentralized finance and now, countless individuals from every corner of the world have been able to utilize DeFi to support Ukraine’s aid.
The speed at which blockchain donations have been processed has been incredible. In less than a week after the government’s announcement, as much as $54 million in crypto donations had been raised as traditional financial aid lagged behind. Because DeFi enables peer-to-peer transactions that can not be restricted by centralized authorities, it has been a powerful tool in mobilizing thousands of individual donors regardless of where they live. And because blockchain is an open, distributed ledger, the flow of donations has been transparent in a way not possible in traditional finance.
War and challenges facing DeFi users
In many ways crypto aid to Ukraine is a watershed moment for DeFi. While it’s been inspiring to witness, this emergency response campaign has also been a stress test and brought to light the many challenges that still exist in DeFi that have hindered its mass adoption.
Simply put, in order to make borderless, frictionless transactions possible, a better DeFi user experience is needed.
Consider the multi-step, cumbersome process and high gas fees even experienced blockchain users face when trying to trade their crypto holdings for one of the 12 tokens currently being accepted by the Ukrainian government.
Say for example, a user wanted to trade their existing AVAX tokens, which are not accepted by the Ukrainian government into ETH which is accepted. This would require the user to have multiple wallets, hold the relevant gas tokens and find a blockchain bridge that would support this transfer from the Avalanche blockchain to Ethereum.
Uniswap has tried to address this by making it possible for people to convert any Ethereum-based digital currencies into ETH but this is of course limited to the Ethereum blockchain.
Future of multi-chain transactions
The need to facilitate cross-chain crypto donations is only one example of how the multichain ecosystem in DeFi is here to stay. New blockchains are constantly being created to solve for the drawbacks of older chains and that cycle keeps repeating itself. Crypto holders want to own tokens from different chains and for the entire industry to grow, liquidity needs to move more freely from one chain to another.
Unfortunately, all current blockchain interoperability applications limit users from experiencing the full benefit of a multichain ecosystem. This is because blockchain bridges are quite difficult to use without significant technical know-how.
To truly disrupt everyday finance, we need better options for users that don’t require them to directly interact with the intricate elements of the underlying technology. We have to develop applications that cut through the chaos of multichain transactions and seamlessly connect the DeFi ecosystem.
Centralized exchanges like Binance and FTX have been leaders at creating a seamless user experience, but they have done so at the sacrifice of decentralization and requiring the user to create a hard custody transfer of their assets.
Catalog, a new app built on the Ren Blockchain, will finally provide the full benefits of centralized exchanges such as an intuitive user interface, low fee transactions and passive yield on crypto holdings without sacrificing on decentralization.
The crypto community’s response to Ukraine has demonstrated to the world the promise that decentralized finance holds. We’re building an app that will make a truly borderless financial future possible.
About the author
Susruth Nadimpalli is the co-Founder and CEO of Catalog, the first metaversal exchange making it possible to discover and trade assets from anywhere in the DeFi metaverse with one click and zero gas fees.
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