Layer by Layer Issue 39: Avalanche, Polkadot, and Oasis

Transparency has long been one of the core value propositions of blockchains, as well as the decentralized finance (DeFi) applications they have given rise to in recent years. On the layer 1 (L1) level, transparent blockchain transactions allow independent nodes to achieve consensus on valid states, which, in turn, enables the secure transfer of value. In the case of DeFi, the transparency and auditability of smart contracts allow users to verify protocol functions and assess risks without having to place their trust in a particular entity.  

At the same time, privacy and anonymity are central to the design of L1 and DeFi protocols as well. The ability for anyone with an internet connection to anonymously create a crypto wallet ensures that blockchains remain un-censorable and accessible on a global scale. DeFi protocols also thrive on accessibility, with immutable smart contracts producing consistent outputs given identical inputs, regardless of the identity of interacting wallets. Discrimination against specific entities is thus significantly reduced, which further helps protocols attract and pool liquidity from anywhere in the world.