How to Create A DeFi Wallet (mobile app)

In a flash, DeFi has emerged as a viable alternative to traditional banks, brokers, exchanges, and other financial institutions. As a result, the value of assets locked in DeFi-protocols increased by 2000% in 2020, reaching $ 13 billion (the market increased to $ 55 billion in the first half of 2021). At the same time, DeFi wallets have become the primary beneficiaries of the industry’s expansion, as they are the ones who connect users and decentralized financial services, taking a small commission on most transactions.

In this piece, we’d be talking about how to create a DeFi Mobile App

Top Takeaways:

  • Before developing a DeFi app, you must first decide on the product’s blockchain and tokenomics. These decisions will drive all further choices of technologies, protocols, etc.
  • Once deployed on a blockchain, a truly decentralized application cannot be changed. As a result, a proper migration strategy for future releases should be planned ahead of time. All defi apps with admin keys are vulnerable to hacking.
  • The key to developing a high-performing defi app is to employ tried-and-true UX/UI techniques from the “web 3.0” niche while streamlining onboarding as much as possible.

What exactly is DeFi technology?

Decentralized finance, or DeFi, refers to all financial applications and protocols controlled by decentralized algorithms or multiple independent individuals or institutions rather than centralized nodes. At the same time, the primary goal of DeFi projects is to ensure that each user has complete control over their finances without using intermediaries.

Now to Creating A Defi Mobile App

Decentralized finance (DeFi) allows anyone to participate in crypto assets, NFTs, and trading. The best part is that when you create your own DeFi wallet platform, you can store and transact with your crypto assets.

Furthermore, unlike centralized wallets, where you must verify your identity on every transaction, you do not need to verify the background details to open or maintain a DeFi wallet.

DeFi wallets are typically built on the Ethereum blockchain and support nearly all types of DeFi tokens. Other blockchains may support these wallets, so do your homework before selecting a wallet based on your requirements.

How to Create a DeFi App

Defi app development is relatively simple regarding user-facing web or mobile apps. We go over the necessary steps in detail in various blogs (e.g., when talking about fintech app development services)

The steps outlined here focus on creating memorable user experiences and adapting the software feature set to changing market conditions. In essence, we still need to build a fintech app, but this time it will run on a blockchain.

However, blockchain-specific aspects of developing a defi application, such as network selection, tokenomics, and so on, require a little more attention.

Please keep in mind that while dev teams define the majority of the following details during the discovery phase, the crypto space is so dynamic that additional changes may occur during product development.

Step 1: Which Blockchain Should Be Used?

Today, the Ethereum network is by far the most important defi platform. The chain’s total value locked (TVL) metric outperforms the rest of the field.

TVL all chains defi apps

However, such popularity has a cost. As more people enter the defi economy, whether to gamble with NFTs or trade, network congestion increases, resulting in slower transaction speeds and higher costs.

How do we explain to a newcomer that a simple transaction in our Ethereum-based decentralized app may cost them $60-$120 in network fees?

Not surprisingly, defi app development firms have begun to seek alternatives. As the graph shows, 2021 was when other blockchains began to make a noticeable dent in Ethereum’s defi monopoly.

So, how do you pick a blockchain to build a defi app on? Here are some things to look out for;

  • Assistance with smart contracts: Smart contracts are the heart and soul of any defi app because they contain all of the application’s business logic. Fortunately, the majority of new blockchains have them.
  • User acceptance
  • Transaction speed and network fees: Stack of technology: What programming languages must be used to create native defi applications? Can we use Solidity (smart contracts) or Go, as on Ethereum? How is the development environment?
  • Ecosystem developed by the defi application concept?
  • Finally, the decision will be influenced by the versatility of the existing defi apps on the chain. Have popular Ethereum games such as Aave and UniSwap already migrated to this new chain? Is there an open defi protocol on the blockchain and bridges to other networks?
  • Can I buy and store NFT’s on a Defi Wallet?

Finding answers to these and other similar questions will assist you in determining the best chain to start a defi app. Other chains that frequently pose as potential candidates for developing a defi application include:

  • Terra ($12.2 billion)
  • Binance Smart Chain ($11.9 billion)
  • Avalanche ($9.1 billion)
  • Fantom ($8,7 billion)
  • Solana ($7.6 billion)
  • Polygon ($4.8 billion)

Of course, the choice will also be determined by the nature of your product and whether or not it will require integration with other chains.

Step 2: Definition Of Tokenomics

The most important aspect of any decentralized application is tokenomics. Of course, some types of defi software, such as portfolio managers, Do not require the creation of a crypto token to set up a defi app.

On the other hand, most successful decentralized financial applications introduce new tokens and different mechanics for working with them, such as staking, donating to a liquidity pool, and exchanging tokenomics concepts in defi app development.

Furthermore, you must decide whether the token you create will be inflationary or deflationary, how it will be distributed/awarded to users, what consensus mechanism it will support, whether users holding the token will have voting rights, whether it will be a stablecoin or not, and a slew of other factors.

All of these logistics will be stored in smart contracts, which function as immutable servers on a blockchain. By the way, there’s something we need to talk about when it comes to decentralization.

Step 3: ADD CRYPTO WALLETS

Because every defi wallet deals with cryptocurrency, it stands to reason that users will require a cryptocurrency wallet. Customers are usually allowed to connect their wallets that they have come to trust.

On the other hand, nothing prevents you from creating your crypto wallet and providing users private keys (typically in the form of a seed phrase). Why do most decentralized applications recommend that users bring their cryptocurrency wallets?

Focus on pro users for a faster time to market

Integrating your crypto wallet with your DeFi app is advantageous, especially if it provides additional functionality beyond transactions. Everchain-like tools that support multiple tokens and coins from various blockchains.

Step 4: Working With Oracles In

For proper execution, a DeFi may require off-chain data. Assume we’re developing a DeFi app for travel insurance. Our smart contract will require data on canceled flights and weather to trigger transactions to customers eligible for insurance payouts.

This off-chain data is derived from oracles, also known as data feeds. Ideally, we’d need to rely on solutions like ChainLink’s oracles, which mimic blockchain operations by requiring independent nodes to reach consensus before submitting the results to a blockchain.

Otherwise, a centralized oracle that can be compromised poses a significant risk to your DeFi app.

Conclusion

This piece covered a detailed process of how to develop a DeFi Wallet Mobile App. In reality, only 1% of the world’s population is involved in the crypto revolution. We believe that defi apps, which provide intuitive user experiences similar to fintech apps built around traditional financial services, will be the next wave of adoption.