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- #023: 🧐 Meld is launching on Avalanche
#023: 🧐 Meld is launching on Avalanche
🛑 Is this a bet on a multi-chain future or stepping away from Cardano?
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Hi Cardano Community,
Welcome to This Week In Cardano - your daily Newsletter covering the major updates in the Cardano Ecosystem!
This is what we have for you today:
🧐 Meld is launching on Avalanche
🛑 Is this a bet on a multi-chain future or stepping away from Cardano?
💎 Gem of the Day
This Week In Cardano
Your Daily Newsletter covering all major events happening in the Cardano Ecosystem
Meld is launching on Avalanche
As the decentralized finance (DeFi) space continues to evolve and expand, the race to achieve mass adoption is heating up.
One player in this field, MELD, has recently announced plans to go multi-chain, with a focus on deploying on Avalanche, an EVM-compatible blockchain.
Meld is launching an Avalanche Subnet
MELD protocol is launching as a Subnet on Avalanche.
The concept of a Subnet, in the context of blockchain technology, refers to a sovereign blockchain that has autonomy over its membership and token economics.
This is achieved by a group of validators from the Avalanche network coming together to reach consensus on the state of one or more blockchain networks.
A bet on a multichain future or stepping away from Cardano?
While this move may seem strategic on the surface, some industry observers are questioning the decision to veer away from the Cardano blockchain, which was initially touted as the foundation for the MELD protocol.
Challenges of going multichain
The bootstrapping phase of any decentralized finance (DeFi) protocol is challenging, and it is essential to focus on building a strong foundation in order to establish the protocol in the ecosystem.
Meld has not yet launched any sophisticated DeFi product on any chain, except "staking" of its own tokens.
Going multi-chain increases the risks and complexity of this process, as it can be challenging to build an active community around the project on multiple chains.
Risks of launching on Avalanche
Deploying on Avalanche raises questions about the level of security and decentralization that MELD can offer its users.
While Avalanche may offer certain advantages, such as increased speed and lower fees, it is a relatively centralized blockchain.
Most of its tokens and, thereby, validators are concentrated in the hands of a few actors in the ecosystem.
Risks of distracting the focus from Cardano
Cardano offers a fundamentally different technology, a much more decentralized and secure environment compared to Avalanche(EVM).
From past experiences, the success of an early-stage DeFi project depends on its focus on delivering a solid product and building a solid community around it.
Then focusing on delivering a product that leverages the unique ledger architecture and the strong community around Cardano could be an alternative move that can actually work.
Indigo protocol is a very recent example of such a DeFi project.
Conclusion
Meld is planning to go multichain with the launch of Meld on Avalanche as a subnet.
This move offers a lot of opportunities as well as risks.
As we have not seen a lot of DeFi protocols being successful as multi-chain projects, the multi-chain move of Meld may come at a cost of building a solid product and community on Cardano.
How will this influence the overall success of Meld as a project? Only time can tell.
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💎 Gem of the Day 🧵
1/There’s significant innovation happening on Cardano (not soon™ but live now)
Every big crypto publication should be writing about these - but isn’t. I’ll highlight a few:
- NFT bonds
- SPO liquidity bonds
- Cardano staking yield within DeFi
- Decentralised Encrypted Assets— ADA whale (@cardano_whale)
12:15 PM • Jan 11, 2023
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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
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