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Summary:
1. Viraz Malhotra, a smart contract engineer from Shell Protocol, discusses improving user experience (UX) in decentralized finance (DeFi) applications by making them atomically composable.
2. Current UX issues in DeFi include multiple transactions required for complex operations, resulting in high gas costs and exposure to miner extractable value (MEV) risks.
3. Shell Protocol has created a solution separating the accounting layer and the business logic layer of smart contracts to allow for more modular design and composable operations.
4. Their accounting layer, called the Ocean, is an ERC-1155 contract that users interact with, while the business logic layer remains more of a "black box."
5. The system allows for complex transactions such as multi NFT swaps or liquidity pool exchanges to be completed in a single, less costly transaction.
6. Composable smart contracts increase the approachability of DeFi for retail users by simplifying the UX and reducing the need to understand multiple protocols.
7. To achieve this, Shell Protocol developed 'adapters' – middleware smart contracts that facilitate communication between Shell contracts and other DeFi protocols like Uniswap or Curve.
8. Users interact with Shell contracts using an array of structs called "interactions," enabling batch operations such as swapping tokens or adding/removing liquidity.
9. Interaction structs include encoded interaction types and addresses of business logic contracts or tokens involved.
10. The process of executing this system involves locking in a token to receive an ERC-1155 token, performing a desired operation (swap, liquidity addition, etc.), and then unwrapping the ERC-1155 token to receive the final transaction output.
Key Questions:
- How does the current UX of DeFi dApps deter users?
High gas costs, multiple transactions, MEV risks, and complex operations over various platforms challenge users.
- How does Shell Protocol aim to improve UX for DeFi dApps?
By creating a set of smart contracts that separate accounting and business logic layers, enabling batch operations, and reducing the number of transactions required.
- What is the role of the Ocean in Shell Protocol's structure?
The Ocean is the ERC-1155 contract acting as the accounting layer that users interact with directly.
- How do adapters help in achieving atomic composability?
Adapters serve as middleware that communicates between Shell contracts and external DeFi contracts, allowing for complex operations to be performed seamlessly.
- How does atomic composability benefit retail users?
It simplifies their experience by reducing the need to understand multiple protocols and platforms, allowing them to perform various operations through a single interface.
Core Takeaway:
The core problem described is the user experience issues in DeFi due to the necessity of multiple complex and costly transactions. If not addressed, users may find DeFi platforms difficult to use and inefficient, which could impede broader adoption.
The consequences for not understanding or solving this problem involve a continued barrier for entry into DeFi especially for less technical users, and a potential decrease in DeFi growth due to poor user experiences.
To address this problem:
1. Differentiate the accounting layer (like The Ocean) from the business logic layer in smart contracts for modularity.
2. Implement 'interactions' as an array of structs in smart contracts to allow users to perform batch operations within a single transaction.
3. Develop 'adapters' as middleware to facilitate inter-protocol communication, enabling the Shell Protocol to integrate with various external DeFi contracts and offer atomic composability.
Tags here: Viraz Malhotra, Shell Protocol, DeFi, atomic composability, smart contracts, ERC-1155, Ocean, Adapters
Viraz Malhotra, Shell Protocol, DeFi, atomic composability, smart contracts, ERC-1155, Ocean, Adapters
