The field of finance is ever-evolving based on the circumstances, environment, and customer needs. Decentralized finance is the latest addition in financial marketing. Blockchain and cross-chain platforms make DeFi easy to implement.
DeFi or decentralized finance are open platforms that provide assistance with financial tools. One can borrow or lend money, analyze market trends using derivatives, trade cryptocurrencies, etc., through DeFi. DeFi platforms also offer interest like savings bank accounts.
DeFi makes use of blockchain technology that is extensively used by Bitcoin. As the name suggests, the data stored in the blocks are interconnected through chains. Being a decentralized platform, the entered data is irreversible and visible to everyone else.
One can track down transactions, and any error or data alteration in any block can be traced easily as it is connected to other blocks which will refuse to accept that data.
Solace.fi is a cross-chain insurance protocol that is working on a project to provide insurance to liquidity providers or market makers on DeFi. The technology is being widely appreciated. Recently, the NEAR protocol has shown interest in the technology and provided a grant of $30,000 to Solace.fi to continue with its cross-chain coverage project.
The research grant is split into two chunks. One of them will help Solace. fi add finishing touches to the project set to be launched on Aurora this October. This will help users take their decentralized applications to a broader market.
The second chunk of the grant will be released with the successful launch of its project on Aurora.
With the exponential increase in decentralized financing and the explosion of users on such platforms, a rise in hacks and exploits has also been observed. Studies by CipherTrace, a crypto intelligence firm, have shown that three-quarters of cryptocurrency hacks reported this year have been in the DeFi domain.
The report also suggests a theft of about $360 million through these hacks in 2020. And Solace.fi is working on its cross-chain project to cover such losses.
It offers rapid claim assessment, optimized exposure, risk management, free from human processes. The project also includes the multichain future in which NEAR is actually interested. This is why NEAR invested in Solace’s project.