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Learn why builders are using the Stellar network to develop the next generation of DeFi applications

Stellar has made a significant move with the launch of Soroban, a new smart contract platform. As an OG Layer 1 blockchain with a decade in the space, Stellar leverages its unique position to offer fresh insights and enhancements. This strategic, late-stage entry has allowed for a complete redesign from the ground up, resulting in Soroban, integrated into Stellars Protocol 20 in May 2024. Soroban represents a next-gen platform that capitalizes on extensive industry knowledge to provide a cutting-edge user experience.

Many networks face congestion leading to transaction delays. Fundamental architectural challenges have emerged in retrofitting existing protocols, resulting in numerous compromises.

Solution: Soroban, built with WASM and Rust, offers:

Re-entry attacks, like the one that cost Fei Protocol $80M, are a significant threat. Many platforms lack adequate defenses against such vulnerabilities.

Solution: Soroban contracts prevent re-entry by default and offer comprehensive unit testing and fuzzing. Combined with the Soroban SDK, developers can create robust applications capable of handling billions of legitimate transactions.

Ethereums state bloat is a well-known issue. While solutions like sharding exist, they often serve as temporary fixes rather than permanent solutions.

Solution: Stellar introduces state expiration, akin to "charging rent," to efficiently manage data and maintain a manageable state size. Key features include:

High transaction costs can deter user adoption.Stellar offers an average transaction cost of USD $0.00000392, significantly cheaper than Ethereum, Solana, and most other Layer 1 chains. Theefficient and novel POA (Proof of Agreement) Stellar Consensus Mechanism and tunable gas model ensure low costs while maintaining strong correlations between compute resources and fees.

Many DeFi products remain inaccessible to users without traditional banking services. Lack of payment rails in regions with underdeveloped banking infrastructure is therefore a very real challenge.

Solution: Stellar boasts the second-largest network of cash on/off ramps, second only to Bitcoin. Unlike Bitcoin, Stellar supports the use of smart contracts and the flexibility to create a greater variety ofDeFi applications. This extensive network enables:

Soroban, the smart contracts platform live on Stellar mainnet, is changing the DeFi landscape by addressing these fundamental issues, while providing a robust, accessible platform for development worldwide.

See more here:

Five Key Challenges with DeFi Solved with the Stellar Smart Contract Platform - The Defiant - DeFi News