Fusion Foundation tackling interoperability ‘without’ centralisation
Fusion has created a new interoperability model based on cryptographic concepts. The minds behind this ecosystem have conceived a fully trustless decentralised communication to bridge the gap between different blockchains and traditional finance.
Following the financial crash of 2008, and the emergence of blockchain, the question of trust in the financial system was fundamental in shaping the evolution of a new financial technology.
The acute distrust of a system that had resulted in financial chaos, meant that visionaries and investors who were frustrated with traditional finance were keen to step away from the issues of centralisation. And so emerged Decentralised Finance.
As with any new technology that is developed, blockchain technologies require a continuous evolution, responding to the needs of their creators and users in order to continue to produce value and remain relevant in an ever-evolving ecosystem.
Decentralised Finance, or “DeFi” solves one of the fundamental problems of traditional finance- allowing people to fully control ownership of their assets and their access to them.
For true interoperability between ecosystems to exist, however, new technology had to be created in order to bridge the gap between traditional finance and the blockchain.
Fusion is a project that seeks to connect all financial transactions in an ecosystem that is cross-chain as well as cross-data source and cross organisation. In essence, Fusion has developed a protocol that allows developers to build applications that are able to freely interact with other protocols and systems.
Who is behind Fusion?
The founder DJ Quian is the CEO of BitSE, an incubator responsible for the creation of two high profile blockchain projects: VeChain (China’s preeminent enterprise blockchain protocol) and QTUM. One of the main goals of Fusion is to solve the problem of scalability, and interoperability that exists in blockchain technology.
As a fully decentralised smart contracts platform, Fusion’s primary goal is to become an ecosystem that allows different blockchains to communicate with each other as well as connecting global finance to blockchain technology, integrating blockchains and traditional systems in a seamless manner.
What does Fusion bring to the blockchain space?
One prime example of the issue with traditional finance is the reliance on costly intermediaries and the inefficiency of using these services. These issues were not simply eliminated once blockchain technology was developed, and DeFI projects such as Fusion, stepped up to solve these defi limitation issues and drive DeFi forward.
Fusion (FSN) is leading the charge in increasing interoperability in the blockchain space. Through its unique technology, Fusion addresses the existing problems within blockchain when it comes to interoperability and scalability.
In the same way that each technological revolution in history has brought about changes in efficiency and production, so too does DeFi. A real world example of DeFi is smart contract codes replacing traditional loan officers.
In order to provide a solution to the inefficiency of traditional financial services, Fusion created their own fully decentralised technology, or DCRM.
Decentralised control rights management is an interoperable solution that is, according to Fusion, “more powerful than atomic swaps, more secure than sharded key storage schemes, safer and cheaper than multi-signature schemes”.
Using blockchain technologies, such as smart contracts, and their patented DCRM technology, Fusion is able to replace all intermediaries with program codes, and through this, eliminate the need for traditional third-party services that can charge excessive fees, are inefficient, and often do not offer guarantees.
With asset management there is a huge discrepancy between the value provided by a financial intermediary and the value that you offer them. For example, a centralised bank or asset management application will require a significant fee for the basic privilege of using their services and storing your assets with them.
Intermediaries have come to be the norm in traditional finance. And while decentralisation seeks to tackle this, intermediaries have remained key players in finance, especially it comes to absorbing any risks involved.
While traditional finance, and the intermediaries that exist within this space, are often touted as the real villains of this financial efficiency quandary, it is difficult to think of any financial scenario that does not need an intermediary to conduct a financial transaction. This is where Defi steps up and fills this gaping need to both fulfill the underlying demand for lending, and to facilitate this without the need for large commissions.
To put it simply, the interest an intermediary receives from a loan, far exceeds the yield you gain from depositing your hard-earned assets. With this in mind, there are still risks that financial providers have to take on, which in theory would be transferred to the individual user of a decentralised system.
Fusion places security at the center of global finance- through its DCRM technology and other concepts such as the Time-Lock function.
DCRM (Distributed Control Rights Management) is the security layer that will protect the assets that are locked within the smart contracts. Another feature that Fusion has included in their smart contracts are their multiple triggering mechanisms, these include both time and event based triggers.
Fusion uses a unique consensus mechanism called the hierarchical hybrid consensus mechanism- a combination of proof of work and proof of stay.
Fusion trust systems can be used in a number of ways. For example, decentralised custody removes the power from one sole entity who has authority over withdrawals, deposits, and the security of assets. With institutions and exchanges no longer being vulnerable to attack, the security aspect of finance is one less thing to worry about. All of the above, without the need for middle men.
Fusion’s focus on security is reshaping the ways we transact digitally. Fusion’s decentralized custodian model holds and transfers assets on behalf of the user across heterogenous chains, providing secure connectivity across the blockchain.
As a non-custodial solution for DeFi use cases, DCRM’s distributed management scheme also functions as a secure hot wallet solution for more centralised enterprises. Other use cases include key recovery and compliance checks.
The use of the DCRM and Fusion’s commitment to enhancing this technology has resulted in further innovation, with Fusion building a cross chain router. This will enable coins/tokens such as fusion, Ethereum and Binance smart chain on different chains routing among chains seamlessly.
With increasing innovation, it stands to reason that there will be many more use cases in the near future. Industries such as Fashion, Academia, and also stand to gain from DeFi, and Fusion technologies. Collaborating securely, and authenticating products being one of the many ways these industries can benefit from this technology.
Most recently, Fusion’s partnership with Chainlink takes Fusion’s innovative DCRM and Chainlink’s decentralized oracles into the future development of multi-trigger smart contracts where data driven smart contracts are interfaced with the real world.
New projects are quick to join the DCRM Alliance, with decentralised applications such as WeDeFi, a wallet that offers a no-loss lottery in which the user will not lose any coins regardless of their win or lose outcome, and Anyswap, a swap protocol that uses Fusion’s DCRM as a cross-chain solution.
Enterprise adoption is a key focus of blockchain, and with that it comes as no surprise that interoperability has become the unofficial buzzword of 2020. With blockchain development as it is, platforms such as Fusion are making the most of this exciting time, and thinking ahead to the future of blockchain interoperability.