Smart Contracts on Stellar Network Unlock DeFi for the Unbanked

Smart Contracts on Stellar Network Unlock DeFi for the Unbanked

Play To Earn Games | 09 Jul 2024 14:22 UTC

Empowering Financial Inclusion with Stellar's Soroban

The digital world is witnessing a revolution aimed at making financial services accessible to everyone, everywhere. The Stellar network, a ten-year-old project, has transitioned from focusing solely on cross-border payments to introducing a cutting-edge feature that could change the financial landscape: the Soroban smart contract platform.

Soroban marks a significant leap forward for Stellar, launched as part of its Protocol 20 update. It brings to the table the functionality of smart contracts, which are essentially self-executing contracts with the terms of the agreement directly written into lines of code. This addition is not just an upgrade; it's a potential game-changer for millions of people around the globe.

Why Smart Contracts on Stellar Matter

What’s exciting about smart contracts, especially on a platform like Soroban, is their commitment to scalability and user-friendliness. Soroban has been designed specifically with developers in mind, offering them the opportunity to create applications that are immediately accessible and functional for real-world users. This means that the Stellar ecosystem is not just theoretical; it's practical and designed for today's needs, particularly for those who have been traditionally excluded from the financial system.

The Stellar Development Foundation is optimistic that these recent advancements will make Stellar even more appealing for developers looking to innovate. The availability of easy-to-use on-ramps, combined with lower transaction fees, promises to draw more builders to create on Stellar, focusing on applications that serve those without bank accounts or modern financial services.

Building DeFi on Stellar

Decentralized Finance (DeFi) is a sector ripe for exploration within the Stellar ecosystem. By focusing on the unbanked, Stellar's network of ramp services allows a broader community to engage with DeFi systems. This is a significant stride toward financial inclusion, as it opens up a whole new world of financial services to a large demographic previously cut off from such technologies.

The launch of Soroban does not mean starting from scratch, but rather building on a well-established and growing ecosystem within Stellar. There are over eight million accounts on Stellar, along with a plethora of applications, wallets, developer tools, users, and volume. This vast network assures new developers that their projects will find a ready and bustling market.

One of the most appealing aspects of building on Soroban is the approachability of its chosen programming language, Rust, and execution environment, WASM. This choice ensures that developers can quickly move from concept to execution, speeding up the process of innovation and deployment. Soroban aims to streamline development, allowing creators to focus more on their ideas and less on the intricacies of the technology.

The true impact of Soroban’s smart contracts comes into play when considering the reach and affordability of applications built on Stellar. By creating platforms like Automated Market Makers (AMMs) and lending/borrowing markets specifically for the unbanked population, developers can provide solutions that not only meet real needs but are also economically viable for their users.

Daily Debrief Newsletter

In a world where technology is constantly evolving, staying updated with the latest trends and developments is crucial. Similarly, the financial technology sector is rapidly advancing, aiming to bridge gaps and create inclusive financial systems. By subscribing to daily news briefs, one can stay ahead of the curve, understanding how innovations like Stellar’s Soroban platform contribute to a more inclusive financial world.

In summary, the Stellar network, with its recent addition of the Soroban smart contracts platform, is setting the stage for a future where financial services are universally accessible. By focusing on practical applications that serve real-world needs, especially those of the unbanked and underbanked populations, Stellar is not just talking about potential; it's actively working towards making financial inclusion a reality. As developers continue to build on this promising platform, the possibility of a financially inclusive world becomes ever more tangible.

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