How Ionise paves the way for better DeFi on Zilliqa

Decentralised finance (DeFi) is an important focus for the Zilliqa network, with Zilliqa CEO Matt Dyer recently laying out extensive plans to grow the DeFi ecosystem in 2023.

Important changes are coming to the Zilliqa network to make it easier for people to build and use DeFi applications on the blockchain, including the recent launch of EVM (Ethereum Virtual Machine) compatibility, which opens up the network to Solidity developers and EVM-based DeFi dApps as well as users of popular wallets like MetaMask.

One of the first steps in paving the way for the growth of DeFi apps on Zilliqa is the launch of Ionise - a new borrowing and lending platform that is the first EVM money market protocol deployed on the Zilliqa blockchain.

Ionise not only offers utility to DeFi users on the Zilliqa network, but also demonstrates how developers will easily be able to deploy or fork EVM DeFi applications to the blockchain.

To find out more about Ionise and how it paves the road for DeFi growth on Zilliqa, we spoke to Zilliqa Head of Product Anton Agafanov.

How Ionise works

Ionise is the first EVM dApp built on Zilliqa and is the foundation for an interoperable ecosystem of ecosystem apps built on both Scilla and Solidity.

Adding support for Solidity dApps on Zilliqa opens up the network for those who want to easily build or fork applications and take advantage of a nascent DeFi ecosystem. 

Ionise serves as a prime example of how EVM dApps can be deployed to the Zilliqa network and deliver real utility in the DeFi space.

“As a money market protocol built on Zilliqa EVM, Ionise paves the road for future DeFi deployments on Zilliqa,” Anton says.

“The team took one of the most successful lending protocols available, the Compound protocol, forked it, and deployed a few pieces of additional infrastructure to make it work on the Zilliqa network.”

Compound is an open-source decentralised lending protocol that has proven to be one of the most popular DeFi applications across multiple blockchains, and like many other EVM dApps can be, it has been forked and adapted to run on Zilliqa as Ionise.

Ionise will initially offer simple borrow-lending capabilities, although it has plans to expand its supported tokens in future.

The protocol launched with support for USDT and ZIL tokens, and token holders can use the lending functionality to create a small amount of leverage with the risk of liquidation.

Anton notes that the Ionise team is also considering implementing support for other tokens within the Zilliqa ecosystem like stZIL - the liquid staking token used by Avely Finance - and beyond like bridged ETH and BTC, which could add even more utility for users.

“A lending protocol gives you an ability to lend from one side and borrow from the other. For lending you get paid, for borrowing you pay a fee, both algorithmically calculated.” Anton explains.

“Ionise is looking to add stZIL once it is available to be integrated and the necessary conditions are met. This will immediately multiply the utility of stZIL and offer people much greater ability in terms of borrowing and lending.”

Ionise launches with relatively simple DeFi functionality and will expand as development progresses, but also demonstrates that EVM apps can easily be deployed on Zilliqa and there is a massive opportunity for DeFi growth with significant first-mover advantage for developers.

“Ionise shows that you can build a DeFi product using EVM. It will work and you can use it - the Ionise team has shown that in the simplest way possible,” Anton says.

Accelerating DeFi growth on Zilliqa with EVM

Anton explains that the Zilliqa infrastructure team wants to make it as easy as possible for DeFi developers and users to start building and adopting EVM DeFi applications on Zilliqa.

“We believe in DeFi as the future of finance. We believe in decentralisation and in the permissionless use of those products. We want to create products that have real utility behind them.”

“DeFi is also a crucial economic layer for all current and future products within the Zilliqa ecosystem, offering permissionless financial functions and creating added value.”

“The people in the ecosystem can create whatever they like using Zilliqa and nobody will stop them. It’s open source and you can use Scilla or Solidity to create whatever products you like. You can deliver value to users and extract revenue from them - this is all up to developers and product teams in the ecosystem,” he says.

When it comes to the state of DeFi on Zilliqa, Anton acknowledges that the ecosystem was behind others in terms of infrastructure and sees EVM compatibility as a major step towards gaining parity with the wider blockchain space.

“As the core Zilliqa team, we saw that Zilliqa was honestly behind other ecosystems in terms of DeFi. There were two problems - we had few basic products to build upon and there were a very small number of teams in the ecosystem engaged in building DeFi products.”

“That's why it was decided to pursue EVM compatibility, to increase the number of people that can actually write new code and deploy it or just fork DeFi apps and redeploy them on Zilliqa to be the first in the ecosystem and cater to the massive community,” he says.

This first-mover advantage is not to be underestimated, especially in a blockchain ecosystem with a large existing community and, until now, little established competition in the DeFi space.

This is the time to start building DeFi apps on Zilliqa to capture the demand for these tools, Anton says.

“If you are first in the ecosystem, you will likely get a major audience. If it brings real utility, people will come and use it.”

“Moreover, EVM support is expected to grow exponentially through integrations into existing multi-chain and cross-chain projects, ranging from wallets to protocols and infrastructure solutions.”

Supporting DeFi development

Anton adds that the Zilliqa core infrastructure team will be working to encourage deployment of Solidity dApps on the network and will aid projects as they take advantage of Zilliqa’s EVM compatibility.

“We will support those who build EVM DeFi apps on Zilliqa with whatever technical support they need to succeed.”

“We're also planning to support developers with hackathons around EVM dApps on Zilliqa, which will help raise visibility and aid people in deploying Solidity dApps on our network, which will include DeFi applications.”

To find out more about EVM compatibility on Zilliqa and how to get started building and deploying Solidity dApps on the network, read our blog post on using Truffle and Hardhat with Zilliqa.

If you’re a big fan of DeFi and are excited to be part of Zilliqa’s growth in this space, stay tuned to our socials for more announcements around Ionise and other EVM DeFi applications coming to the network.