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- IOTA’s launch of Shimmer Network aims at encouraging the launch of new DeFi applications on its platform.
- The Shimmer Network serves as a sandbox for the community and developers to test applications for the DeFi space and the NFT markets before launching them on the IOTA blockchain.
The decentralized finance (DeFi) market has been growing rapidly over the last few years. Apart from Ethereum, several blockchain networks have come to the forefront of hosting DeFi applications.
However, one major lacuna with the existing DeFi applications is the high fees along with other security vulnerabilities. The IOTA blockchain network recently unveiled its Shimmer Network which provides a frictionless and efficient on-chain experience to its users.
The Shimmer Network serves as an additional layer for the IOTA blockchain with a key focus on asset tokenization. The Shimmer helps tokenization of assets based on IOTA’s Tangle technology. These assets could either be real assets or tokens running on the IOTA Tangle.
The biggest positive of IOTA is that, unlike regular blockchains, the IOTA blockchain relies on a system of nodes dubbed “Tangle”. These nodes verify each other via the “Directed Acyclic Graph”. As a result, the users can serve as validators allowing the network to scale infinitely.
The Shimmer Network serves as a sandbox for the community and developers to test applications for the DeFi space and the NFT markets before launching them on the IOTA blockchain. Thus, Shimmer is to IOTA what Kusama is to Polkadot. The roadmap shows plans to fully integrate the Shimmer Network into the IOTA in the future.
The Shimmer Network addresses all key requirements of speed, low cost, and efficient developer onboarding making IOTA a robust protocol for a frictionless DeFi experience.
Overcoming threats of DeFi
While the DeFi markets have exploded really fast, so has been the security threats that these protocols face. Millions of dollars have been stolen in DeFi thefts over the last few years. It shows that DeFi is still quite in the nascent stage facing a mounting challenge of overcoming security threats.
Also, incorporating DeFi at the organizational level comes with operational and regulatory risks which one needs to account for before implementing. DeFi is currently plagued with engineering hacks wherein it can exploit the entire assets under management (AUM) while playing around with the APIs. IOTA aims to address all these new theft vectors and solve the anomalies of the decentralized finance (DeFi) market.
IOTA’s Shimmer Network comes with its native SMR Coin. Thus, anyone participating in IOTA can claim this token. On Shimmer Network, the SMR Coin can be used for transactions on smart contracts, dApps, and other applications.