A Radix DeepDive, a New Form of DeFi

Introduction

Radix (website) is not just another layer-1 blockchain; it's trying to be a layer-1 network designed specifically for DeFi developers. With its asset-oriented smart contracts, Radix offers a unique approach to decentralized finance. The network features an on-network Blueprint Catalog that allows developers to contribute, access, and reuse pieces of functionality. This makes code modularity and standardization a first-class network feature, propelling open-source development into the decentralized era.

But what sets Radix apart is its self-incentivizing developer ecosystem. Unlike traditional DeFi platforms that rely on centralized funds, Radix has a decentralized system that rewards developers for their contributions. This shifts the focus from chasing grants to building truly valuable and sustainable decentralized applications.

Radix employs a unique consensus algorithm called Cerberus, designed around a concept known as "pre-sharding." This allows for a practically unlimited number of shards, ensuring global-scale DeFi platform capabilities. Cerberus enables dynamic consensus on atomic transactions across only the relevant shards, without stalling the rest of the network. This results in an application layer that can process an unlimited number of transactions and dApps in parallel.

So why did we write this article? To shed light on a platform that is not just promising but is changing the way we think about DeFi.

Unpacking Radix

Radix is a full-stack, layer-1 protocol that addresses the key challenges developers face in the DeFi space. One of its standout features is its focus on scalability without compromising security or composability, thanks to its unique Cerberus consensus mechanism. This allows for unlimited linear scalability, making it a game-changer in the DeFi landscape.

But who's it for? Primarily, Radix is built for developers. It offers a secure and scalable environment for building DeFi applications, complete with high-quality templates known as "DeFi Lego bricks." These templates make it easier for developers to create robust and scalable DeFi apps without starting from scratch. The platform even has its own smart contract programming language, Scrypto, to facilitate this.

Radix is all about community. Developers are incentivized through the Radix Developer Royalties System, which rewards them for their contributions. This creates a self-sustaining ecosystem where everyone benefits.

So, what sets Radix apart? Three things: scalability, security, and community. Its Cerberus consensus mechanism allows for seamless transactions across multiple shards. Its Radix Engine minimizes the risk of smart contract hacks and exploits. And its developer-centric approach ensures continuous innovation and improvement

The Driving Forces Behind Radix

At the helm of Radix is Dan Hughes, a self-taught programmer who found his passion for coding at just 8 years old. As the founder and CTO, Dan brings his extensive experience in decentralized technology to the project. He's joined by CEO Piers Ridyard, who contributes his legal and entrepreneurial expertise. Together, they lead a diverse team skilled in technology, finance, and blockchain, all united by a common goal: to fix the current inefficiencies in financial systems.

Financially, Radix is well-supported, having attracted a range of investors. LocalGlobe, DWF Labs, and Maven 11 are some of the key names backing the project.

When it comes to partnerships, Radix has been strategic in its alliances. It's teamed up with Chainlink to offer secure, accurate data to its developers. A collaboration with Messari aims to bring more transparency to the project, while a partnership with StakeHound focuses on unlocking liquidity in both the Ethereum and Radix ecosystems. Other notable partnerships include Object Computing, Noether DLT, Ren Protocol, ExpoLab, and Copper.

The Radix Technology

Radix tackles pressing issues like network bottlenecks, smart contract flaws, and scalability. At its core is the Radix Engine, which offers a secure foundation for building DeFi apps. This engine relies on a Byzantine Fault Tolerance-based consensus protocol called Cerberus, ensuring the network can scale without losing its ability to compose multiple assets and services.

Radix DLT tackling some of its most pressing challenges, such as scalability and smart contract limitations. At the heart of Radix's scalability solution is the Cerberus consensus algorithm, which enables unlimited parallelism. This means multiple transactions can be processed simultaneously without slowing each other down. Cerberus works closely with the Radix Engine, the platform's application layer, to define "substates" that allow for this parallel processing.

Unlike traditional smart contract platforms that rely on a global ordering system, Radix uses a partial ordering approach. Each transaction specifies the shards involved, allowing for more efficient parallel processing. This is crucial for DeFi applications that handle a high volume of transactions. Radix Engine is designed to specify the intent of a transaction rather than the specific substates, avoiding conflicts and ensuring smooth operation.

Radix also introduces the concept of "components," which are essentially smart contracts with all their data and resources assigned to a single shard. This enables each component to process as many transactions as possible without interference from other network activities. The platform even allows for multiple logically unrelated components within a single dApp, further enhancing parallelism and throughput.

The Tokenomics of Radix and eXRD

Radix has two primary tokens: the RADIX token (XRD) and the E-RADIX token (eXRD). XRD is the native token of the Radix Public Network and serves multiple purposes. It's used to secure the network through Radix's Delegated Proof of Stake system and is the only token used to pay transaction fees on the Radix platform. These fees are then burned, reducing the overall supply. Speaking of supply, XRD has a maximum supply of 24 billion tokens. Initially, 12 billion were allocated, with 9.6 billion currently in circulation and 2.4 billion locked in a stable coin reserve. An additional 12 billion XRD will be minted over approximately 40 years to reward stakers and validators.

On the other hand, eXRD is the Ethereum-based version of XRD. It allows Radix's native token to be used in Ethereum's DeFi ecosystem. Each eXRD is backed 1:1 by an XRD held by a secure third-party custodian. The supply of eXRD can never exceed the circulating supply of XRD, making it a reliable representation.

Both XRD and eXRD can be exchanged 1:1, and a token bridge service called Instabridge facilitates this. This bridge is currently one-way but plans are in place to make it a two-way bridge. These tokens are not just digital assets; they are integral to the functioning and security of the Radix network. With a well-thought-out tokenomics structure, Radix aims to offer a stable and secure environment for decentralized finance.

The Future of Radix

Radix has a well-defined roadmap with three major milestones: Alexandria, Babylon, and Xi'an. Alexandria focuses on giving developers a head start by introducing a new programming language for DeFi called Scrypto and a second version of the Radix Engine. This allows for early testing and development in a private setting.

Babylon, set to launch in September 2023, aims to enrich the DeFi ecosystem. It will enable Scrypto-based smart contracts to run directly on the Radix network. This phase will also introduce a decentralized royalty system to reward developers and an on-network catalog of pre-built smart contracts.

The final milestone, Xi'an, aims to bring limitless scalability to DeFi. It will employ a sharded version of the Cerberus consensus algorithm, allowing for a high throughput of transactions without sacrificing speed or security.

Final Thoughts

With its unique Cerberus consensus algorithm, Radix offers unparalleled scalability, allowing for an infinite number of transactions to be processed in parallel. This is a game-changer for DeFi, which often struggles with scalability issues.

What makes Radix stand out is its developer-centric approach. The platform offers a range of high-quality templates and its own programming language, Scrypto, making it easier for developers to build robust DeFi apps. Developers are further incentivized through the Radix Developer Royalties System, creating a self-sustaining ecosystem that benefits everyone.

On the tokenomics front, Radix has two primary tokens: XRD and eXRD. XRD is the native token used for securing the network and paying transaction fees, while eXRD allows for Radix's integration into the Ethereum ecosystem. Both tokens play a crucial role in maintaining the network's security and functionality.

Looking ahead, Radix has laid out a clear roadmap with three major milestones: Alexandria, Babylon, and Xi'an. Each phase aims to solve specific challenges in the DeFi space, from scalability to developer incentives, setting the stage for Radix to potentially become the go-to platform for DeFi development.