Finance: The future will be shaped by autonomous smart contracts!

Innovative and revolutionary, Massa’s autonomous smart contracts open a new chapter in decentralized finance. Based on novel technology, these self-executing smart contracts further enhance decentralization, efficiency, and the complexity of DApps. But how can they affect DeFi? Let’s find out.

Why are autonomous smart contracts the future of DeFi?

Despite experiencing rapid growth in recent years, decentralized finance still exhibits some weaknesses that slow down the adoption of DeFi platforms by professional traders and institutional clients. These weaknesses come in various forms.

One of  them is the dependency of DeFi protocols on certain external entities for transaction execution or liquidity management. The limited functionalities of DeFi platforms also represent another type of challenge that sometimes discourages users from decentralized exchanges (DEXs). And that’s precisely what differentiates centralized exchanges from decentralized ones.

Centralized exchanges, as their name suggests, have complete control over all order books and matching engines. They thus have an easier time offering a wide variety of order types. They give traders access to more advanced functions, allowing them to have better control over their positions and better organize risk management.

However, when considering the philosophy behind the creation of cryptocurrencies, centralization is not an ideal. Moreover, on centralized platforms, security risks (hacking attempts, insider trading, etc.) are significant.

Unfortunately, decentralized exchanges, which represent the cornerstone of DeFi, do not allow for exploring the full potential of decentralized finance. While they facilitate token exchanges, the majority of current decentralized exchanges only support basic market orders. They cannot execute complex operations without the intervention of a third party or an external trigger. The reason? They are not autonomous.

Professional traders thus do not find trading functions adapted to their profiles on these platforms. That’s why autonomous smart contracts, by addressing the challenges of current smart contracts, are emerging as the future of decentralized finance.

They include the dependence of DeFi protocols on certain external entities for transaction execution or liquidity management. The limited functionalities of DeFi platforms also represent another type of challenge that sometimes dissuades users from decentralized exchanges (DEX). And this is precisely what differentiates centralized exchanges from decentralized exchanges.

How do autonomous smart contracts revolutionize DEX activity?

The release of autonomous smart contracts puts an end to the limitations that hinder the trading experience on DEXs. More complex and capable of executing without manual intervention or the involvement of an off-chain bot or centralized oracle, this new generation of smart contracts completely transforms DEXs. Thanks to them, DEXs will be able to offer:

• Advanced trading functions (stop loss, take profit, limit orders);
• Autonomous liquidity management based on market conditions, which helps mitigate impermanent losses and optimize capital efficiency;
• Autonomous adjustment of interest rates based on supply and demand;
• Automated collateral liquidations in case of borrower default or under-collateralization, reducing the risk of unrecoverable debts.

In short, Massa’s autonomous smart contracts enhance decentralization, feature offerings, autonomy, flexibility, and user-friendliness of DeFi platforms. This major advance will directly result in attracting a larger influx of users to these platforms, consequently increasing overall liquidity and performance of the DeFi ecosystem.

The capabilities of DEXs, Auto Market Makers (AMMs), and lending and borrowing platforms – fundamental components of DeFi – will thus be significantly improved.