Taking DeFi to the NEXT LEVEL ? - Radix DLT Protocol overview

Hey guys, and welcome back to Box Mining. So recently, you probably know I've been diving headfirst into decentralized finance. But of course, when diving into DeFi at its current point, you'll be met with insane gas prices. In fact, throughout the last few months, I've spent roughly $6,000 USD on Ethereum gas fees. That's extremely expensive, and a lot of people have been talking and saying, you know what, Michael, I want to get in, I want to try it, but these gas fees are preventing me from trying anything in decentralized finance right now. And that's a very critical problem. We really need scaling, and at the same time, we should probably explore some of the other options available. And this is where Radix kind of comes in. So Radix, I've been looking at it for a while, and some of my friends are saying, Radix, you've got to look at it because it's a blockchain specifically designed to solve problems within DeFi. And for the longest period of time, I was kind of wondering why. I was kind of on the fence. I'm just like thinking, you know what, how can this be done? I mean, we have Ethereum 2.0 on this way already. We also have competitors in Binance Smart Chain, in Algorand, in Polkadot. But what's kind of special about Radix that is worth looking at? And in fact, there is quite a few. So that's kind of the reason for this video, because there are quite a few elements that needs to be explained and needs to be addressed, because they do address a few issues that have complicated-sounding names, like composability. And at first, I didn't understand what it is, but I have some really great analogies to go through that. So what this video is, it really explains kind of what Radix is and where it kind of sits on everything. And at the same time, we take a slightly deeper dive into the technology aspect of it to explain why this is all possible. I mean, to some it might sound like black magic, but I'll try to break it down into some easy terms for everyone to understand here. If you guys are interested in more, understanding more about decentralized finance and everything that's going on, I have a decentralized finance playlist up here. Check that out, because it has all the innovations that we have and we've seen in DeFi kind of really summarized into easy videos like this. And without further ado, of course, everything here covered here is my personal opinion, not financial advice. Let's take the deep dive right now. All right, let's start with the basics here. Why is scaling so hard, especially for Ethereum? So on Ethereum, we've seen those gas prices going higher and higher and higher. Now, for the past few weeks, we've always been above 100 guay. And every interaction with a smart contract seems to cost five to six dollars. And this is a rate that everyone wants to play at. Optimally, it should be in cents. So why is this? Why is this happening? And there's a really great analogy for it. I take no credit for it. It's 100% done by the Radix team. But I think we're going to use it from now on for everything. So in this analogy, we have Ethereum as visualized as kind of a bus. And it needs to deliver pizza. You can obviously see my art is not the best thing in the world. But you can see this is a giant bus delivering pizza. Now, everyone in a town wants pizza, right? So this pizza is great. We love pizza. Cool. We're everywhere. And everyone needs pizza right now. So the bus has to go around, drive around the city, deliver pizza. It's great. And this kind of works if there's four people. But if there's 4,000 people, this single bus delivering pizza, the pizza is going to get pretty darn cold at the end of it, let's just say the very least. So Ethereum's solution to this is to have a mini bribe. So this guy can maybe offer, say, look, I'm really desperate for pizza. I'm going to pay you an extra fee. This is in the form of gas prices. It's kind of almost like a bribe to that bus. So the bus, instead of going to everyone first, the bus just chooses to drive straight to this guy and then goes on his merry way. So that's kind of how Ethereum works right now. And this also explains why there is a gas war going on. People are trying to pay more and more for their gas. So the bus delivers the pizza faster. So it's actually on time. Now, this fee escalates higher because the biggest problem here is that Ethereum can't really scale that bus. Maybe they can maybe add some extra wheels on to make it a little bit faster. But ultimately, there are restraints on how fast this bus can drive. And you can maybe add the bus so it's a little bit bigger. It can take more pizza. But still, it's not going to be able to feed 40,000 people for pizza with just one bus, right? So the obvious solution would be not just to have more buses. What if we can break this bus down into a lot of bikes, right? This is where my art breaks down. Let's imagine this guy with a bike. This is a bike. This is a bike. Let's have a fleet of bikes, right? And they all deliver pizza. Wouldn't that be faster? Wouldn't that solve the current solution that we have right now with people not delivering enough? Well, this is the problem with Ethereum. Ethereum is thinking of a solution to break down the network into shards. So this is kind of like breaking it down into many different bike delivery guys. And they all start delivering at once. And it's going to service more people. Now, that sounds really great. But there are problems that can arise from this. And this is because the bikers need to talk to each other. At the end of the day, all of these smart contracts need to interact with each other. Whether it's taking a loan out on a compound or doing something crazy with flash loans or doing something on a lending or farming platform. All these contracts need to communicate with each other in some way. And that's why communication between these bikers or bike delivery guys becomes really important. And there could be potential problems of that. And this is why Ethereum is taking so long to deploy its sharding solution. It's because it wants to make sure everything is perfect. Now, Radix is doing something that's not just sharding, but it's also full-state sharding. And what's offering it's without breaking composability. This is essentially the communication between these shards. So the beauty of it when Radix releases is that all the dApps can still communicate with each other with full, perfect communication without the possibility of data leakage. All right. So taking a deep dive into Radix technology, it needs to be first addressed that Radix isn't blockchain. So on Bitcoin, on Ethereum, they're based on blockchain, which is essentially like the bus model we're talking about earlier, where all data or new transactions, they're bundled in these blocks. And these blocks occur at a set amount of time. Whilst this works in terms of it's easy to understand, it's easy to software to understand it. But a big problem it encounters is when it tries to scale, there's a certain amount of data that can be packed into each block. And that presents a big problem to scaling. Radix doesn't use blockchain. Instead, it uses Cerberus, which is a new technology, a new consensus algorithm that they developed. So instead of having blocks, it splits the network into a million number of shards. In fact, not a million. It's unlimited number of shards. This means that each shard is like the little bike driver we're talking about earlier, that they can start delivering data. And each of them can compute at the same amount of time. So this offers a great amount of scaling ability. So sharding isn't a new concept. It's been around for a while, and most centralized databases do this. And a lot of new projects are also doing this as well. What's different about Cerberus is the way it allows these shards to group together. Because unfortunately, one of the biggest problems, let's say if a borrowing lending DAP is here, if your trading DAP is here and your funds are here, you need a way for these shards to communicate with each other. And if they're not on the same shard, you need to have that communication to group. So what Cerberus does is it has a pre-sharding technique that allows this information to be gathered together and for that communication to be achieved between the different DAPs in this time. So this is something that is called composability. So it allows that data to flow. And this is necessary in the next generation of DeFi blockchains. Because at the end of the day, we might be at the end of the day using a lot of different DAPs. And that way, if the DAPs are on different shards, they need and must be able to communicate with each other. And lastly, one of the last elements I thought was very novel about Radix is how it deals with developer development as well. So kind of the best way to describe it is that Bitcoin has a set number of functions, like Bitcoin just called script. Very limited in functionality, not much you can do. Ethereum is all about unlimited possibilities. Developers can write whatever they want. It's a blank sheet of paper. But something that Radix is bringing along is something called the components and component catalog. So what this kind of does is it kind of helps developers along the way. Ethereum being a complete blank sheet of paper, developers have to pretty much write everything or try to frantically find someone else's library. But here, Radix is writing their own component catalog. So it makes development process a little bit, actually a lot more easier, because you already can have a set of functions that you can already work with. So this is almost like having the tools. If you're trying to build, say, a car, some of the tools are there already. You don't have to develop and reinvent the wheel each time you want to make that car. You can say, look, yeah, the wheel is pretty, you know, that's a pretty refined instrument. You can say, look, let's just pull it from the component catalog, bring that there, slam it onto the car. You're good to go. So that's kind of the novel part about it. And something that's also interesting from a developer's perspective is that the components can also inherit different types of code and have modifications on there, too. So the way it's designed and the way it's kind of very modularized means that objects can be pulled from the catalog. Adjustments can be made, so it can be tweaked and used in a project. So it makes development time much more reduced. And also, it reduces the possibility of risks as well, because when developers have to develop their own libraries and such, it opens up possibility for major flaws to happen with the smaller components. Say, if the tire has a vulnerability, then that may compromise the entire car. But if the tire is something that's a standard from a catalog and that's been verified by Radix to be well working, then it's good to use. They also advertise for developers that they allow developers to take royalty. And I think this is a very novel idea because obviously no one wants to work for free. So something that's kind of very cool is that it can allow for individual components to have royalties. So if people want to develop, say, a library of tools and components for using bigger projects, well, smaller developers can contribute to that and get paid royalties when they get used and called. So my take on that is that this will directly incentivize smaller open source developers to have better components. But at the same time, if it's a large, large project, I don't think it will directly benefit them as much. So what's the overall take on Radix? I think they're actually working on something super novel here. They definitely identify some of the critical flaws of earlier blockchain systems, and they're developing a brand new way to solve that. So that's the exciting part. That is a lot of innovation. It's not just like a copy-paste code project. It's Ethereum, but we just tweaked a few figures. This is something completely new from the ground up. It's not blockchain because it doesn't use. It uses something called Tempo, so it structures this data differently. And at the same time, the sharding technique is very, very different from what we've seen so far. We've seen the ability to scale to something like 64 shards or 128, but scaling to quintillions of shards, that's a large number. I don't think we've even seen numbers that large to be able to comprehend it. So having that many shards, I mean, it's almost like you got a pizza delivery guy for every person, every personal user. If you want pizza, you got it. That's fast, right? So I think that's the beauty of it. That's the impressive part about it. It's designed from the ground up, and it considers a lot of the potential hurdles that might be encountered by other blockchain projects that are tackling scaling. Precisely the idea of composability, the ability for different smart contracts to interact with each other, even if they're on different shards. Now, I'd say in terms of the drawbacks, I would say the biggest drawback is that it's a new development environment, so developers have to get used to it. And this always takes time. It's not like overnight. And we've seen overnight development for EVM or Ethereum virtual machine-based projects that you can copy, paste code over. Here, experienced developers have to get familiar with the code, but Radix does make it easier by having that component system there. Now, Radix is doing a public sale very soon, so if you can check their website, they are offering to have the get tokens options on their website. And you can fill in a few questions if you're interested to be part of the project. Also, with that as well, I definitely hope to check up a little bit more about the developments later, especially because they're related to decentralized finance, and especially since they're addressing some of the critical issues here. So we'll definitely hear more about Radix on this channel in the future. And I'd love to hear what your thoughts about it are. Like, are you excited that there are new projects coming in with brand new ideas solving potentially critical problems right now? Leave a comment down below. I'd love to hear what you think. If you'd like to learn more about decentralized finance and all the applications being built on decentralized finance, check out our DeFi playlist. And also, guys, if you want to win a free t-shirt, we're doing that giveaway this week with every video that we launch that's part of the notification squad. So all you have to do is when a new video gets launched within the first 12 hours, type hashtag notification squad, and you have a chance to win a free t-shirt. And with that, guys, thank you guys so much for watching. I'd love to hear what you think about Radix. Leave a comment down below, and I'll see you in the next video.