xSigma, the DeFi project launched by NASDAQ-traded conglomerate ZK International Group (NASDAQ:ZKIN), has partnered with a leading European software developer.
Originally conceived as a research and development lab in 2018, xSigma now counts decentralized finance among its primary specialisms. After signing a Letter of Intent (LOI) with Dentoro Alliance LP, the pair will work together to create impactful blockchain-based solutions in fields such as logistics, IoT, infrastructure, and supply chain management.
xSigma is one of few publicly-backed companies to step into the crypto realm, and with its DeFi arm, xSigma DeFi, it is seeking to resolve what it describes as the sector’s many “pain points.” It’s not the only project with such grand ambitions either.
DeFi: Billions Locked But Tricky to Use
Decentralized finance, the ecosystem whose trustless financial applications help users save, lend, stake, borrow and trade without the need for a central authority, has captured a tonne of media interest in 2020 with volumes soaring on many of its protocols.
Despite the impressive numbers flocking to interact with these permissionless systems, though, their potential to deliver widespread financial inclusion is being hampered by systemic architectural flaws.
From poor UX and low liquidity to sluggish transactions, high gas fees and impermanent loss triggered by price mechanism failures, the weaknesses of DeFi are legion, inconveniencing customers, and impairing the industry’s hopes of supplanting legacy systems. While new products and protocols are announced every other week, most fail to tackle obstacles that have come to characterize this fledgling sub-sector of the crypto economy.
When first launched by its parent company ZK International Group, xSigma was tasked with utilizing blockchain to “revolutionize traditional industries and make financial tools more accessible.” Although DeFi has gone some way towards facilitating open access to financial primitives, xSigma is hoping to bring something altogether different to this nascent movement.
Ushering in the Next Era for DeFi Blockchain Projects
xSigma does not profess to resolve every pain point that exists in defi. What it does is build upon what’s gone before, introducing a richer user experience and supporting the pooling of ERC20 assets without the risk of impermanent loss.
A user-friendly token swapping solution, the stablecoin DEX is powered by a governance token that gives holders the right to determine how the protocol should be managed. Token-holders also receive a percentage of all DEX fees, with team and LP tokens vested gradually for two years to align incentives between the platform and its community. Later, xSigma will incorporate lending and borrowing functions.
Suitable for users of all ability levels, including novice traders, xSigma DeFi marries the tech to the trust that comes from having a publicly traded parent company behind it.
Having only really come to the fore in 2020, DeFi remains in its infancy. While it may one day make good on its promise of expediting wider financial inclusion, it’s currently used almost exclusively for speculation. Of the many DeFi protocols rolling off the production line, the ones that stand out are solving unique pain points adding new utility to a trustless setting.
Orion Protocol is one of them. In aggregating liquidity from CEX and DEX into a single terminal, it’s combining the best elements of both ecosystems, while delivering a superior trading experience for its users who enjoy better pricing and less slippage. Orion enables traders to enjoy the liquidity of the entire crypto market, while still controlling their private keys, and thus enjoying the trustless trading afforded by DeFi.
TokenSets is another product offering something different, specifically via its DeFi Pulse Index. In essence, the index provides a means by which investors can gain exposure to DeFi assets without having to continually rebalance their portfolio using automatic market makers (AMMs) like Uniswap and Sushiswap. By cutting AMMs out of the equation, traders can save big in terms of both time and gas fees.
Between trading, farming, governance, lending, borrowing, and saving, the use cases for DeFi are numerous. But if the industry really wants to evolve, it needs products that users can interact with effortlessly and profitably.
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