WingRiders DEX Aims to Address Scalability Issues Faced by Ethereum Dapps

Scalability is currently one of the largest concerns for the Ethereum network. Despite being the most popular blockchain development platform, the network still suffers from scalability issues, from slow transactions to high gas costs once the network gets congested. This can have a negative effect on decentralized applications (dapps) due to high transaction costs as well as stablecoins such as USDC and USDT which require users to use ETH to pay for transactions.

There are protocols that are working on tackling these issues faced by protocols on the Ethereum network, one of which is WingRiders, a Cardano-based decentralized exchange. The platform works as a decentralized exchange (DEX) and automated market maker (AMM), and they worked with the Milkomeda Foundation to provide stablecoins USDC and USDT to the Cardano mainnet ecosystem. The platform also reached a total value locked (TVL) of 62.5m ADA after launching its mainnet.

The platform aims to provide a cheaper and more scalable alternative to Ethereum-based dapps and services including a decentralized exchange (DEX) with an automated market maker (AMM) as well as stablecoins (USDT and USDC). Before we look into the platform, let’s delve into the scalability concerns with Ethereum.

Ethereum and its Scalability Issues

Scalability is an issue for Ethereum, as we've seen with Bitcoin in previous years. The most widely used smart contract platform was released as a proof-of-work network in 2015. Despite being the most popular blockchain development platform, it has to develop an infrastructure that can be used by billions of people all over the globe without raising issues around scale or security.

When it comes to the Ethereum network, one example of its scalability problem was the blockchain game CryptoKitties. CryptoKitties is an Ethereum-based blockchain game that was released in 2017. The game allows players to buy, collect, breed, and trade virtual cats. The game became very popular and users buying and selling kittens on the network caused the Ethereum network to become congested since there were so many transactions.

The large number of transactions was a problem since Ethereum is only capable of processing around 30 transactions per second in its present form. Ethereum will need a much higher throughput to become truly scalable for global use.

Furthermore, all of the nodes on the Ethereum network must process each transaction and smart contract. This restricts Ethereum's transaction throughput since the amount of work needed by a single node is effectively capped.

Another reason is that the Ethereum platform utilizes the same blockchain for all dapps. Due to the massive volume of network transactions generated by CryptoKitties, the Ethereum platform's other dapps got clogged and delayed as well. As a consequence of this, a greater quantity of ETH was needed to be used whenever a transaction or contract was executed on the network.

Due to the high volume of transactions, users were forced to compete for faster transaction speeds by spending more ETH (or gas) to incentivize nodes to process their transactions. Miners on the network automatically processed the more expensive transactions since they were more lucrative.

Cardano is a Suitable Platform for Scalable Dapps Whilst Ethereum Transitions to ETH 2.0

Whilst proof-of-work is progressively being phased out of Ethereum, slow transactions, scalability issues, and other issues persist. Blockchain developers now have a choice with the Cardano blockchain's proof-of-stake model, and WingRiders makes it available to investors. Within six days of coming online on April 12, WingRiders had accumulated over $60 million in total value locked (TVL), with a high of 62.5 million ADA in the first month before the significant crypto market downturn. Once yield farming was implemented, their mainnet went live and 1.6% (1,600,000 WRT)  of its token supply was allocated to the first month's worth of yield farming incentives and bonuses.

The platform has a double yield farming functionality, which allows liquidity providers to earn additional tokens from the automatic staking in ADA-containing pools and yield farming of platform tokens. Those earnings are in addition to the standard exchange fees that liquidity pools receive.

WingRiders uses the extended unspent transaction output (EUTXO) protocol. UTXO is the amount of cryptocurrency left behind after a transaction, some crypto users refer to this as "dust". In simple terms, it's like the change left over after transferring crypto out of your wallet. EUTXO builds on the UTXO model by allowing addresses to contain arbitrary logic in the form of scripts as well as being able to carry almost any kind of data. This increases security and predictability in smart contract execution costs and enables a more powerful parallelization of transactions.

The platform’s DEX has also incorporated Ledger hardware wallets into its platform, making it possible to conduct transactions with increased security. In order to address the problems that have plagued DEXs on Ethereum, WingRiders's exchange platform uses the advantages of Cardano. Due to Cardano’s Ouroboros Proof-of-Stake (PoS) protocol, the DEX is less likely to experience excessive gas prices or failed transactions, issues that have been present with Ethereum-based DEXs.

Conclusion

WingRiders aims to address issues related to scalability of Ethereum-based dapps and protocols by using Cardano’s PoS blockchain to reduce transaction fees, improve speeds and prevent network congestion. If the platform succeeds, it could work as a suitable alternative for developers and users of decentralized applications and stablecoins.