Stellar planning to use smart contracts to diversify into DeFi

Stellar planning to use smart contracts to diversify into DeFi

Stellar (XLM) says in its newly disclosed roadmap for 2022 that the vision for 2022 draws directly on what Stellar network learned in 2021 while continuing to innovate to meet its mission of creating equitable access to the global financial system.

Smart contracts are Stellar's most immediate innovation. As a result, the Stellar Development Foundation (SDF), a nonprofit organization, declares its commitment to supporting the development of smart contracts on Stellar as part of its 2022 plan.

Stellar, or Stellar Lumens, is a decentralized open-source protocol for low-cost digital currency to fiat money transfers that permits cross-border transactions between any two currencies. Stellar is adopting smart contracts, but it will not deviate from the network's vision and ideals.

"Since the Stellar network was built for the future of payments, it's critical that smart contracts on Stellar are secure for users and can scale without exorbitant network fees," said another blog post on the development.

"The most immediate innovation for us in this category is smart contracts. In order to encourage engagement, innovation, and utility on Stellar, we will research and shepherd the development of the code and create community engagement around a smart contract implementation," said the blog post.

Stellar also announced its implementation of smart contracts on Twitter alongside a video of Stellar's VP of Ecosystem, Justin Rice, explaining specifics about the smart contracts.

"Smart Contracts are coming to Stellar," said the Twitter post.

Rice mentioned that while smart contracts are not new, Stellar is interested in them for a specific reason. After studying and learning from what's been tried in the broader sector, Stellar might execute them in a new way, bringing new utility in a way that doesn't currently exist. This could set Stellar smart contracts apart from the rest if done correctly.

Who will profit the most from Stellar's adoption of smart contracts?

Smart contracts are essentially programs on a blockchain that execute when certain criteria are satisfied and are maintained. They're usually used to automate the execution of an agreement so that all parties may be confident of the conclusion right away, without the need for any middlemen or wastage of time.

With the implementation of smart contracts to the Stellar network, XLM will join other blockchains like Ethereum, Cardano, and Cosmos, all of which make use of smart contracts.

This is fantastic news for the Stellar ecosystem as a whole and the financial crypto industry in general. DeFi on Stellar provides users with direct access to all of the benefits of smart contracts.

Kayode Adeoti

Kayode Adeoti

Kay Adeoti is a writer at Wealthier Today. He has a strong interest in the finance sector and provides readers with informative and educative articles on the space.