Prompted by the quick roll-out of the vaccine against COVID-19, blockchains are taking over the world with giant steps. From business to governmental institutions, the number of enterprises that finally went in favor of blockchain never ceases to impress. In the view of increasing trust in Bitcoin, the world’s largest decentralized currency, blockchain may catch even more attention, even if not all authorities are convinced by its straightforward benefits just yet.
Despite the advantages on both industrial and societal levels, blockchains still remain a nascent technological trend not fully deprived of its short-offs. Such, for instance, is the fragmented nature of the blockchain market, that does not provide possibilities for a full-blown scale-up.
Another one is a way too rapid pace of change, which is sure to leave behind many of the dominant projects in a few years’ time. This leaves entrepreneurs extremely cautious regarding their choice of blockchains, as their choices rely on the whole future of the project. In order to build something long-lasting, the businessmen need a guarantee that this technological trend will withstand the trial of time and won’t go into oblivion each time as the new, better-equipped blockchain rises on the horizon.
In view of all this, the Bifrost platform integrating the technological foundation that merges all existing blockchain into one. The platform will support multichain DApp development mainly tailored to DeFi applications for the time being.
I was excited by the opportunity to exchange opinions with Dohyun Pak, CEO and Co-founder of Bifrost. I prepared a set of intriguing questions. We tried to envisage how the year ahead of blockchain will look like, while also delving deeper into the functionality of the technology, which makes many entrepreneurs scratch their heads.
Edward Moon: Hi, pleased to host you as a speaker. Could you please share with me your outlook on 2021, and what do you think is in store for blockchain technology?
Dohyun Pak: I believe we may be in the due process of critical changes on an industrial scale. Among them, I believe that the multichain technology will prove itself to be paramount in the current year of 2021. Until now, different blockchain protocols have functioned independently and demonstrated that there was no solution in allowing users to use various blockchains simultaneously. Multichain will present opportunities to increase the scalability of the blockchain ecosystem, provide interoperability between a myriad of blockchains and give flexibility to developers and users when using DApps or DeFi.
Edward Moon: Lately, blockchain has proved itself as an indispensable part of healthcare during the latest round of vaccine distribution; what other industries could take immediate advantage of blockchain, and how covid-19 could spur their adoption rate?
Dohyun Pak: Finance is an industry that can immediately take advantage of blockchain. I see DeFi (Decentralized Finance) as the future of finance because DeFi can solve problems that traditional finance cannot solve. There are 5 features that make DeFi the future of finance.
Firstly, DeFi is a service for all. To use DeFi, all people need are smartphones and the Internet. Secondly, DeFi is a service without borders. This means that anyone can use DeFi anywhere in the world. Thirdly, DeFi is a service that has strengthened security because it is based on blockchain technology in which anyone can check the transactions at any time. Fourthly, DeFi is a service without government. Interest rates are determined by the supply and demand of the market.
Lastly, DeFi is a service with plug & play. To use DeFi, people do not have to go through massive amounts of documents, but instead, go through simple, easy steps. DeFi has these characteristics because it is built on top of blockchain technology.
Before the spread of COVID-19, people went to banks to create accounts or directly meet the tellers to use certain financial services. As COVID-19 spread around the world, most financial services started to conduct through mobile phones, and fintech companies are leading changes in finance. DeFi will improve financial services from fintech using blockchain. For example, not only will it strengthen security, but it also reduces transaction costs because DeFi has no need for middlemen.
Edward Moon: How do you feel about the progress made in the DeFi space so far? What would you say is the main obstacle on its way to becoming the global mass movement, and what supportive steps could be taken for it to become one?
Dohyun Pak: In my opinion, DeFi is the last stage of the financial revolution. Although DeFi will not replace all the traditional finance, services that require security and lowering transaction fees will be improved by DeFi.
I am excited to see the rapid growth of DeFi; however, this is just a start. There are limitations to current DeFi services. The biggest limitation is that DeFi services are restricted under a single blockchain protocol so they cannot use features of different ones. For example, DeFi services under Ethereum cannot interact with other services on different networks. In order for DeFi services to truly become the next generation of finance, it would have to adopt a multichain technology to lower gas fees and allow interactions among different blockchain protocols.
Edward Moon: How far can the popularity of the multi-protocol platform go, and would other players be prompted to follow your example?
Dohyun Pak: There has been a buzz on projects that connect different blockchain networks such as Polkadot and Cosmos. However, no actual project has proven such a feat of multichain technology. So, we developed BiFi to prove this, and if multichain technology operates with the flow, BiFi and Bifrost will then most likely be mainstream.
The demand for a multichain middleware platform will increase as the blockchain and DApp industry grows. Currently, DeFi users are paying high gas fees because most of DeFi services are operating on top of a single blockchain. If gas fees continue to rise, then no one will use DeFi. Restrictions under one blockchain are not just a problem for DeFi, but also other types of DApps.
Bifrost is a solution that can solve these issues of DeFi and DAppshave. As a multichain middleware platform, Bifrost will not only connect different blockchain networks but also give choices for developers to choose different blockchain networks for their own DApps. Bifrost will be the paradigm of multichain.
I saw that your platform came up with two native tokens – BFC and BiFi. How would you describe the difference between them, and in which way is the value of one interlinked with the other?
BFC is the currency of the DApps in the Bifrost Multichain Ecosystem. Developers pay BFC for using the multichain middleware to develop and operate their DApps. BiFi is the governance token of BiFi service. As BiFi is the first DApp to be powered by Bifrost’s multichain technology, BiFi will need to pay BFC to Bifrost as a multichain service fee.
Edward Moon: With more than 35 existing partners, how far are you planning to take your blockchain network? Is there any plan of how you want your project to look on the scale of 2-5 years?
Dohyun Pak: First, I would like to clarify that Bifrost does not have a blockchain of its own, nor is it an exclusive ecosystem. It is a multichain middleware platform that connects different blockchains. Our current goal is to develop our own DeFi project utilizing the power of Bifrost, and support the project of our partners, to ultimately provide seamless interactions with the greater blockchain ecosystem.
In Q4 2021, we plan to release the Bifrost Suite, a development platform tailored for DeFi. Bifrost will attempt to create a decentralized infrastructure that connects the fragmented markets. Using Bifrost, DApps, and DeFi projects will be able to choose their target blockchains that allow for seamless connections among all blockchains.