While it may take some time before most crypto projects come to the realization, it is a no-brainer that interoperability is the way to go. The featured examples in this article are some of the leading innovations that are currently addressing the issue. With DeFi set to continue on its upward trajectory once the market conditions stabilize, cross-chain solutions will play a fundamental role in adoption. Additionally, users can only trade crypto tokens that are ERC-20 compatible, leaving out other potential digital assets that reside on Layer-1 blockchains such as Solana and Avalanche. However, it is only compatible with the Ethereum blockchain, a limitation that has left out most of the small-time DeFi traders given the high gas fees required to execute swaps.
A Sigh of ReliefĪs it stands, Uniswap (v3) is currently the leading DEX, with a market share of 41.6%. Luckily, it seems that some players are finally heeding to this call, we are now seeing a paradigm shift, with DeFi projects launching their products on several blockchains while others debut interoperability solutions. Should this really be the case? While some might argue that DeFi is a work in progress, it is quite evident that innovators need to create solutions that bridge the gap between DEXs, regardless of the chain they operate on. A shortcoming that often makes it hard to capitalize on the best trades across various DeFi protocols.
That said, this burgeoning crypto trading niche still faces a myriad of challenges most notably, DEX traders are often limited to a single blockchain environment. According to a recent report by The Block, DEXs recorded over $1 trillion in trading volumes in 2021, marking an 858% increase from the previous year.
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