DeFi on ICP
The Internet Computer Protocol is positioned as an appealing DeFi platform thanks to its unique chain-key signatures and Chain Fusion technology.
Using chain-key signatures, canisters can sign and submit transactions directly on other blockchains, hold assets, and seamlessly swap between tokens like BTC and ETH and their chain-key counterparts, ckBTC and ckETH.
With a canister's web-serving capabilities and its ability to host large amounts of data, DeFi platforms can exist fully onchain with no dependency on centralized components.
Canisters can access and use data from any source, including Web2 APIs, using HTTPS outcalls. This enables DeFi apps to query up-to-date asset prices from any traditional Web2 API without going through an oracle, reducing cost and increasing speed.
Developers can build DeFi applications on ICP that aren’t possible on other chains, including:
Entirely onchain order books and decentralized exchanges.
DAO-controlled exchanges.
Onchain wallets that allow users to sign transactions for any ERC-20 token.
Learn more about DeFi use cases.
Tokens
On ICP, the DeFi ecosystem includes three types of assets:
ICP token: The network’s native utility token.
Cycles: The equivalent of “gas” on ICP.
ICRC tokens: Tokens that adhere to a set of ICRC standards used for defining fungible and non-fungible tokens.
Tokens are created and transferred using system canisters called ledgers. Ledgers are used to record transactions in a chain of blocks.
Index canisters offer endpoints for querying the current balance of an account and fetching blocks without needing to query the entire ledger history.
Rosetta
Rosetta is an open standard introduced by Coinbase to simplify the integration of tokens in applications and services such as exchanges, block explorers, and wallets. It can be used for creating block explorers, decentralized exchanges, wallets, or tokens that are tradable on CeFi exchanges.
There are Rosetta implementations for both ICP and ICRC tokens for easy integration with CeFi exchanges.