The DeFi 1 inch protocol will be the first to be extended to the NEAR blockchain

The decentralized exchange protocol Mooniswap, developed by 1inch’s DEX aggregator, will be Ethereum’s first DeFi protocol to be developed on NEAR, a “sharded” smart contract platform.

As part of a collaboration announced on Tuesday, the 1-inch team committed to porting its automated market maker protocol to NEAR. Sergej Kunz, CEO of 1inch, told Cointelegraph that the Pathfinder aggregation algorithm will eventually be implemented as well.

The NEAR iteration of Mooniswap remains independent of the existing version on Ethereum for the time being. While users can use the NEAR Rainbow Bridge to bring Ethereum tokens onto the new blockchain, the funds of liquidity will be segregated between the two platforms.

The DeFi 1 inch protocol will be the first to be extended to the NEAR blockchain
The DeFi 1 inch protocol will be the first to be extended to the NEAR blockchain

NEAR is an intelligent contract platform with a much higher current scalability than Ethereum. In contrast to other protocols like Polkadot (DOT) or Cosmos (Atom) there are no independent blockchains or parachains in NEAR. Instead, the protocol provides a single chain that is fragmented at the individual block level. The goal of this build is to make development easier by abstracting the underlying architecture into a known format. The NEAR protocol has a single environment that is shared by all decentralized applications, similar to the current Ethereum architecture.

Kunz said the existing scaling technology at NEAR will allow the team “to experiment with sharding and be prepared for the arrival of Ethereum 2.0”. The protocol is to be introduced at NEAR in 2021.

Mooniswap uses a unique virtual delay pricing system to avoid initial execution and reduce inconsistent losses by reducing the profits made by arbitrage traders. In this system, changes in the effective price of an asset from previous stock market transactions are made incrementally over a period of five minutes.

Mooniswap is one of the first major Ethereum DeFi protocols that they wanted to develop based on another blockchain. NEAR had previously signed an agreement with the Balancer Protocol to provide funding for independent developers, although the DeFi application had not committed to creating a new iteration of its protocol.

After the scaling issues in the Ethereum backbone became apparent, the developers of the DeFi protocol looked to native Ethereum Layer 2 solutions and other Layer One protocols to find solutions.

While some protocols had an advantage, the race has not officially started as most scaling solutions will be released or completed in 2021.

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