For those who have spent any considerable amount of time in the cryptocurrency world, Ethereum 2.0 has been the industry’s swan song. It promises to be faster, offer sharding, be more secure, and offer greater programmability than its 1.0 predecessor. With the recent announcement that it will begin slowly rolling out this month, the fanboys are out in full effect. Whether or not it delivers on its promises will require time and experimentation. But is Eth 2.0 the only crypto game in town? Of course not. If anything, the industry has shown that, like any other commercial sector, many projects can coexist. One project planning to co-exist in an Eth 2.0 world is TIXL, a non-profit blockchain company out of Germany that has recently made several technological leaps.
TIXL is building projects that will complement the current cryptocurrency ecosystem by solving several solutions regarding speed, transaction fees, and privacy. We will be focusing here primarily on speed and fees, as the DeFi world has quickly discovered how quickly high costs can eat into profitable trades and yield farms.
TIXL has spent the last two years creating a Directed Acyclic Graph solution to the Ethereum woes. A Directed Acyclic Graph, or DAG, differs from traditional blockchain in a few key ways. In a blockchain, each block of data builds on the previous one. New blocks must be verified one at a time, taking time and resources. DAG’s are not dependent on blocks as they have no blocks. Each node can talk directly to any other node on the network. By increasing the paths of communication and data, DAGs can achieve speeds much faster than blockchains in both testing and production.
TIXL has created its own version of a DAG called the Autobahn, named after Germany’s high-speed freeway. It is a Layer-1 solution that also has characteristics of a Layer-2 solution. This means that Autobahn will act as a complementary protocol, assisting in speeding up transactions across multiple blockchain networks, including Ethereum and Bitcoin. “Cross-chain compatibility” is a buzzword in the cryptocurrency world and understandably so. As the crypto space grows and blockchains integrate more advanced features, communication between blockchains will help accelerate innovation speed.
One of TIXL’s advantages is that the Autobahn is capable of integrating nearly any coin or token into DeFi. For our example, we will focus on Bitcoin. Moving Bitcoin to additional blockchains has been something of a long-standing issue within the community. The original blockchain lacks the smart contract capabilities of Ethereum and other EVM (Ethereum Virtual Machines) compatible projects. TIXL achieves its Bitcoin compatibility by creating a BTC gateway, which acts as an onramp to the Autobahn.
Bitcoin and DeFi
Once on the Autobahn, the Bitcoin becomes a token and can be moved around more quickly and inexpensively than on its original blockchain. This is similar to the Bitcoin lightning network’s idea, though lightning has yet to be fully embraced within the industry. When redeemed, the token is converted back and moved to the BTC blockchain. Once live, this feature very well may be the first time that BTC has been ported over to a DAG.
The advantages of moving Bitcoin to the TIXl network are numerous. It allows Bitcoin transactions to occur nearly instantaneously, retain their value, and participate in DeFi and yield farming. The Autobahn protocol was created in part to help onboard coins and tokens into the DeFi ecosystem. Bitcoin’s inclusion in DeFi has been problematic in the past. As the main “store of value” on the blockchain, there is a demand to use it in lending/borrowing/yield farms, but the options to do so have been limited to custodial companies like Celsius. TIXL’s solution allows Bitcoin inclusion to DeFi in a decentralized manner, giving users full control over their private keys.
Moving Bitcoin into DeFi is but one example of what the Autobahn and TIXL have to offer. Their whitepaper is full of use cases, case studies, and solutions that crypto enthusiasts have been requesting for years. For those who like to tinker and experiment, the TIXL testnet is now open for beta testing. We will explore its capabilities and multiple other topics in our following articles.
The Daily Chain
*Disclaimer – TIXL is our Media Partner, and this content is made possible with their support. The above article does not represent financial, investment, or trading advice, and we do not recommend the purchase of any cryptocurrency or product without consulting a financial aid. The Daily Chain strongly encourages you to do your own research before making any investment decisions.