LuaSwap Official Announcement

#DeFiBreakdown 19 - #Composability & #DeFi

Built on open-source technology, composability is key to accelerating #blockchain development, making #Dapps more interoperable & enabling developers to benefit from existing libraries to create new experiences for users in #web3.

DeFi composability enables various Dapps to be connected together, allowing for capital efficiency as assets can be used within multiple applications at a time. It also fosters a growing network effect where every new Dapp makes every other pre-existing one more powerful. Hence, developers can leverage it to combine powerful components to design new applications and unlock greater possibilities for users.

While DeFi composability is a noble idea, implementing it can be difficult for many reasons. It is critical that both developers & users need actively participate in the analysis of Dapps n the composability being used to preemptively mitigate any issues before they arise.

#DeFiBreakdown 18 - #MEV & #DeFi

MEV stands for Maximal Extractable Value, used to determine the profit that crypto miners, validators, or entities otherwise involved in block production.

There are two categories for #MEV, including good MEV and harmful MEV. Methods like DEX arbitrage or liquidations can result in users getting the fairest prices across exchanges, allowing for market efficiency and smooth operations.

Meanwhile, bad MEV means negative effects on users & the stability of the network. Using methods of MEV extraction like front-running & sandwich attacks can be harmful n result in network congestion and high gas prices for other users.

There are different actors that can influence the way MEV is extracted, and solutions to MEV here are being researched on each factor to minimize their impacts, while still protecting the ethos of decentralization.

But, there is no ultimate solution to MEV yet. What we can do is minimize harmful MEV & decentralize the opportunity for extracting MEV.