The Future of Decentralized Finance: Interoperability and Cross-Chain Solutions

Karolina

26 May 2023
The Future of Decentralized Finance: Interoperability and Cross-Chain Solutions

The financial landscape has been revolutionized by decentralized finance (DeFi), which utilizes blockchain technology, artificial intelligence (AI), and cryptocurrencies to develop innovative and transparent financial solutions. One crucial element driving the future of DeFi is interoperability and cross-chain solutions, as the space experiences rapid growth. This article will discuss the importance of interoperability within the DeFi ecosystem and examine cross-chain solutions, concentrating on their impact on the future of decentralized finance.

Understanding Interoperability in DeFi

Often known as DeFi, decentralized finance signifies a fundamental shift in our understanding and engagement with conventional financial systems. DeFi, built upon blockchain technology, seeks to democratize finance by removing intermediaries, facilitating peer-to-peer transactions, and granting open and transparent financial services to anyone with internet access. The DeFi ecosystem has experienced tremendous growth in recent years, encompassing lending and borrowing platforms, decentralized exchanges, and yield farming, consequently attracting billions of dollars in investments and garnering interest from both institutional and retail investors.

Nonetheless, as the DeFi landscape grows more expansive and numerous blockchain networks are established, the demand for interoperability becomes increasingly vital. Interoperability denotes the capacity for various blockchain networks and decentralized applications (dApps) to communicate and seamlessly interact with each other. This interconnectedness is essential for DeFi's future because it enables efficient asset, data, and value transfers across diverse blockchain networks, opening up a realm of possibilities and promoting collaboration among distinct projects.

Check out our article about the future of DeFi

The Promise of Cross-Chain Solutions

Cross-Chain Solutions are rapidly emerging as the linchpin of future decentralized finance, promising to overcome one of the most significant barriers in the space - the lack of interoperability. At its core, a Cross-Chain Solution allows different blockchain platforms to communicate and interact with each other, enabling the seamless exchange of information and assets. This is a game-changer for DeFi as it could potentially unlock massive liquidity pools trapped within isolated blockchain ecosystems.

In addition, Cross-Chain Solutions also bring the potential for enhanced scalability, security, and efficiency. They provide the means for DeFi applications to leverage the strengths of multiple blockchain networks, bypassing the constraints tied to a single blockchain. This could lead to the creation of more robust and versatile DeFi services, opening up a myriad of opportunities for both developers and users.

Furthermore, Cross-Chain Solutions can foster a more inclusive and interconnected DeFi landscape. By allowing different blockchain networks to interoperate, they eliminate the barriers between disparate communities, bringing together diverse participants under a unified financial ecosystem. In essence, Cross-Chain Solutions hold the promise of creating a truly global and decentralized financial system, thus taking us one step closer to the original vision of blockchain technology.

Use Cases of Cross-Chain Solutions in DeFi

Use cases of Cross-Chain Solutions

Cross-chain solutions are already playing a crucial role in the DeFi space by enabling the creation of innovative financial products and services that were previously impossible. Here are some real-world use cases of how cross-chain technology is being used in DeFi today:

  • Cross-Chain Swaps: Cross-chain swaps allow users to trade assets between different blockchain networks without the need for a centralized exchange or intermediary. These swaps use atomic swaps to ensure the transaction is trustless and secure.
  • Liquidity Pools: Cross-chain liquidity pools enable users to provide liquidity across different blockchain networks. This means that users can earn fees and rewards for their participation. Liquidity pools use wrapped assets to represent the underlying assets, making it possible for users to provide liquidity across different blockchain networks.
  • Cross-Chain Derivatives: Cross-chain derivatives make it possible for users to create complex financial instruments that span multiple blockchain networks. For example, users can create synthetic assets that represent a basket of assets from different blockchain networks, or they can create options contracts that are settled on a different blockchain network.
  • Interoperability: Cross-chain technology facilitates interoperability between different DeFi protocols and platforms. This makes it possible to create new financial products and services that leverage the strengths of different platforms. For instance, users can use cross-chain technology to move assets between decentralized exchanges (DEXs) and lending protocols, or to create new lending products that span multiple blockchain networks​. 

Challenges and Considerations

The immense potential of cross-chain solutions in DeFi comes with several challenges and considerations that need attention. One significant obstacle is regulatory concerns and compliance requirements, given that multiple jurisdictions and regulatory frameworks are involved in cross-chain transactions. It is a complicated task to ensure compliance with these varied regulations while preserving DeFi's decentralized essence, necessitating inventive solutions and cooperation with regulatory authorities.

Moreover, addressing security and trust issues is crucial since the effortless transfer of assets and data across various chains creates new attack vectors and vulnerabilities. To safeguard user funds and uphold trust within the DeFi ecosystem, stringent security measures such as advanced cryptographic methods and smart contract audits are imperative.

Furthermore, attaining standardization and governance for cross-chain interoperability is vital to guarantee compatibility and smooth communication between different blockchain networks. The establishment of shared protocols, norms, and governance structures will encourage interoperability and promote the extensive adoption of cross-chain solutions in DeFi.

Finally, tackling user experience and adoption challenges is essential for achieving mainstream acceptance. Simplification of user interfaces, improved accessibility, and user education about the merits and functionalities of cross-chain solutions are all crucial elements for expanding the user base and realizing the full potential of DeFi interoperability.

The future with Cross-Chain Solutions

One of the key trends to watch out for is the rise of multi-chain DeFi platforms. With the advent of cross-chain technology, we are likely to see an explosion of platforms that operate seamlessly across multiple blockchain networks. This will open up new opportunities for users, allowing them to take advantage of the unique strengths and features of different blockchains. For example, users might be able to earn higher yields on one platform, enjoy lower transaction fees on another, and access unique financial products on a third, all without leaving the comfort of a single, unified platform.

Additionally, Cross-Chain Solutions will likely drive the development of more advanced and complex financial instruments. As demonstrated by the rise of cross-chain derivatives, there is significant potential for the creation of innovative financial products that leverage the interoperability of different blockchains. This could usher in a new era of financial sophistication and accessibility, in line with the ethos of DeFi.

Finally, Cross-Chain Solutions could play a key role in the mass adoption of DeFi. By breaking down the barriers between different blockchain networks, they could help bring about a truly global and inclusive financial system. Users from all corners of the world, irrespective of their local financial infrastructure, might be able to access a plethora of financial services, from basic savings and lending to advanced trading and investment opportunities.

In essence, the future of DeFi with Cross-Chain Solutions looks promising. The combination of interoperability, efficiency, and inclusivity brought about by this technology has the potential to redefine the financial landscape, making it more democratic, accessible, and resilient. The vision of a truly decentralized financial system might not be too far off.

Conclusion

Cross-chain solutions are revolutionizing the future of decentralized finance (DeFi). Interoperability, facilitated by cross-chain technology, is becoming increasingly crucial as the DeFi ecosystem expands. It enables seamless communication and interaction between blockchain networks and decentralized applications (dApps), opening up new possibilities and promoting collaboration. Cross-chain solutions offer significant advantages, including unlocking liquidity, enhancing scalability and security, and fostering inclusivity. They enable cross-chain swaps, liquidity pools, and derivatives, while facilitating interoperability between DeFi protocols and platforms. However, challenges such as regulatory compliance, security, standardization, and user experience must be addressed. The future with cross-chain solutions holds the promise of multi-chain DeFi platforms, advanced financial instruments, and mass adoption, ultimately reshaping the financial landscape into a more democratic, accessible, and resilient system.

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AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!

The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Tomasz Dybowski

04 Mar 2025
The Ultimate Web3 Backend Guide: Supercharge dApps with APIs

Introduction

Web3 backend development is essential for building scalable, efficient and decentralized applications (dApps) on EVM-compatible blockchains like Ethereum, Polygon, and Base. A robust Web3 backend enables off-chain computations, efficient data management and better security, ensuring seamless interaction between smart contracts, databases and frontend applications.

Unlike traditional Web2 applications that rely entirely on centralized servers, Web3 applications aim to minimize reliance on centralized entities. However, full decentralization isn't always possible or practical, especially when it comes to high-performance requirements, user authentication or storing large datasets. A well-structured backend in Web3 ensures that these limitations are addressed, allowing for a seamless user experience while maintaining decentralization where it matters most.

Furthermore, dApps require efficient backend solutions to handle real-time data processing, reduce latency, and provide smooth user interactions. Without a well-integrated backend, users may experience delays in transactions, inconsistencies in data retrieval, and inefficiencies in accessing decentralized services. Consequently, Web3 backend development is a crucial component in ensuring a balance between decentralization, security, and functionality.

This article explores:

  • When and why Web3 dApps need a backend
  • Why not all applications should be fully on-chain
  • Architecture examples of hybrid dApps
  • A comparison between APIs and blockchain-based logic

This post kicks off a Web3 backend development series, where we focus on the technical aspects of implementing Web3 backend solutions for decentralized applications.

Why Do Some Web3 Projects Need a Backend?

Web3 applications seek to achieve decentralization, but real-world constraints often necessitate hybrid architectures that include both on-chain and off-chain components. While decentralized smart contracts provide trustless execution, they come with significant limitations, such as high gas fees, slow transaction finality, and the inability to store large amounts of data. A backend helps address these challenges by handling logic and data management more efficiently while still ensuring that core transactions remain secure and verifiable on-chain.

Moreover, Web3 applications must consider user experience. Fully decentralized applications often struggle with slow transaction speeds, which can negatively impact usability. A hybrid backend allows for pre-processing operations off-chain while committing final results to the blockchain. This ensures that users experience fast and responsive interactions without compromising security and transparency.

While decentralization is a core principle of blockchain technology, many dApps still rely on a Web2-style backend for practical reasons:

1. Performance & Scalability in Web3 Backend Development

  • Smart contracts are expensive to execute and require gas fees for every interaction.
  • Offloading non-essential computations to a backend reduces costs and improves performance.
  • Caching and load balancing mechanisms in traditional backends ensure smooth dApp performance and improve response times for dApp users.
  • Event-driven architectures using tools like Redis or Kafka can help manage asynchronous data processing efficiently.

2. Web3 APIs for Data Storage and Off-Chain Access

  • Storing large amounts of data on-chain is impractical due to high costs.
  • APIs allow dApps to store & fetch off-chain data (e.g. user profiles, transaction history).
  • Decentralized storage solutions like IPFS, Arweave and Filecoin can be used for storing immutable data (e.g. NFT metadata), but a Web2 backend helps with indexing and querying structured data efficiently.

3. Advanced Logic & Data Aggregation in Web3 Backend

  • Some dApps need complex business logic that is inefficient or impossible to implement in a smart contract.
  • Backend APIs allow for data aggregation from multiple sources, including oracles (e.g. Chainlink) and off-chain databases.
  • Middleware solutions like The Graph help in indexing blockchain data efficiently, reducing the need for on-chain computation.

4. User Authentication & Role Management in Web3 dApps

  • Many applications require user logins, permissions or KYC compliance.
  • Blockchain does not natively support session-based authentication, requiring a backend for handling this logic.
  • Tools like Firebase Auth, Auth0 or Web3Auth can be used to integrate seamless authentication for Web3 applications.

5. Cost Optimization with Web3 APIs

  • Every change in a smart contract requires a new audit, costing tens of thousands of dollars.
  • By handling logic off-chain where possible, projects can minimize expensive redeployments.
  • Using layer 2 solutions like Optimism, Arbitrum and zkSync can significantly reduce gas costs.

Web3 Backend Development: Tools and Technologies

A modern Web3 backend integrates multiple tools to handle smart contract interactions, data storage, and security. Understanding these tools is crucial to developing a scalable and efficient backend for dApps. Without the right stack, developers may face inefficiencies, security risks, and scaling challenges that limit the adoption of their Web3 applications.

Unlike traditional backend development, Web3 requires additional considerations, such as decentralized authentication, smart contract integration, and secure data management across both on-chain and off-chain environments.

Here’s an overview of the essential Web3 backend tech stack:

1. API Development for Web3 Backend Services

  • Node.js is the go-to backend runtime good for Web3 applications due to its asynchronous event-driven architecture.
  • NestJS is a framework built on top of Node.js, providing modular architecture and TypeScript support for structured backend development.

2. Smart Contract Interaction Libraries for Web3 Backend

  • Ethers.js and Web3.js are TypeScript/JavaScript libraries used for interacting with Ethereum-compatible blockchains.

3. Database Solutions for Web3 Backend

  • PostgreSQL: Structured database used for storing off-chain transactional data.
  • MongoDB: NoSQL database for flexible schema data storage.
  • Firebase: A set of tools used, among other things, for user authentication.
  • The Graph: Decentralized indexing protocol used to query blockchain data efficiently.

4. Cloud Services and Hosting for Web3 APIs

When It Doesn't Make Sense to Go Fully On-Chain

Decentralization is valuable, but it comes at a cost. Fully on-chain applications suffer from performance limitations, high costs and slow execution speeds. For many use cases, a hybrid Web3 architecture that utilizes a mix of blockchain-based and off-chain components provides a more scalable and cost-effective solution.

In some cases, forcing full decentralization is unnecessary and inefficient. A hybrid Web3 architecture balances decentralization and practicality by allowing non-essential logic and data storage to be handled off-chain while maintaining trustless and verifiable interactions on-chain.

The key challenge when designing a hybrid Web3 backend is ensuring that off-chain computations remain auditable and transparent. This can be achieved through cryptographic proofs, hash commitments and off-chain data attestations that anchor trust into the blockchain while improving efficiency.

For example, Optimistic Rollups and ZK-Rollups allow computations to happen off-chain while only submitting finalized data to Ethereum, reducing fees and increasing throughput. Similarly, state channels enable fast, low-cost transactions that only require occasional settlement on-chain.

A well-balanced Web3 backend architecture ensures that critical dApp functionalities remain decentralized while offloading resource-intensive tasks to off-chain systems. This makes applications cheaper, faster and more user-friendly while still adhering to blockchain's principles of transparency and security.

Example: NFT-based Game with Off-Chain Logic

Imagine a Web3 game where users buy, trade and battle NFT-based characters. While asset ownership should be on-chain, other elements like:

  • Game logic (e.g., matchmaking, leaderboard calculations)
  • User profiles & stats
  • Off-chain notifications

can be handled off-chain to improve speed and cost-effectiveness.

Architecture Diagram

Below is an example diagram showing how a hybrid Web3 application splits responsibilities between backend and blockchain components.

Hybrid Web3 Architecture

Comparing Web3 Backend APIs vs. Blockchain-Based Logic

FeatureWeb3 Backend (API)Blockchain (Smart Contracts)
Change ManagementCan be updated easilyEvery change requires a new contract deployment
CostTraditional hosting feesHigh gas fees + costly audits
Data StorageCan store large datasetsLimited and expensive storage
SecuritySecure but relies on centralized infrastructureFully decentralized & trustless
PerformanceFast response timesLimited by blockchain throughput

Reducing Web3 Costs with AI Smart Contract Audit

One of the biggest pain points in Web3 development is the cost of smart contract audits. Each change to the contract code requires a new audit, often costing tens of thousands of dollars.

To address this issue, Nextrope is developing an AI-powered smart contract auditing tool, which:

  • Reduces audit costs by automating code analysis.
  • Speeds up development cycles by catching vulnerabilities early.
  • Improves security by providing quick feedback.

This AI-powered solution will be a game-changer for the industry, making smart contract development more cost-effective and accessible.

Conclusion

Web3 backend development plays a crucial role in scalable and efficient dApps. While full decentralization is ideal in some cases, many projects benefit from a hybrid architecture, where off-chain components optimize performance, reduce costs and improve user experience.

In future posts in this Web3 backend series, we’ll explore specific implementation details, including:

  • How to design a Web3 API for dApps
  • Best practices for integrating backend services
  • Security challenges and solutions

Stay tuned for the next article in this series!