Scaling Securely: How Web3 Startups Can Grow Without Compromising Security

In the dynamic world of Web3, a start-up finds itself in the chase to scale up as quickly as the increasing user demand can put up with. However, scaling up that fast can cut corners if security measures are not pursued as diligently. Hence, building a successful Web3 company needs just the right amount of protection, especially since the security risks evolve hand-in-hand with the dynamic evolution of user expectations.

At IdeaSoft, we believe in crafting scalable solutions that correspond with the demands of fast-growing ecosystems for Web3. Our partnership with Hypernative, the leading Web3 security company offering real-time threat monitoring and automated response solutions, strengthens our ability to scale flexibly and securely. As we work on constructing adaptable infrastructures for fast growth, Hypernative contributes the necessary security input that keeps the guard up at all times for startups.

Working together, our ambition is to help Web3 founders scale securely, with confidence in both their business goals and the strength of their security protocols.

Building a Scalable Foundation for Web3 Startups

In Web3, every startup finds itself in a peculiar bind of growth and security. In that sense, we at IdeaSoft believe success should, therefore, be about embracing both these objectives equally. We are committed to developing solutions that are scalable but equally secure.

Clearly Defined Business Objectives to Start Off

These are the most important preludes to developing any technological solution. They serve as guidelines while building the security and scalability strategies that will, over time, be quite necessary as the startup grows.

For example, a Web3 startup focused on DeFi could set the goal of onboarding 10,000 users within the first six months. Your goal drives everything, from how to architect the infrastructure to how to implement the security requirements. In that case, setting up for high-volume users would transform into a focus on high transaction throughput and ensuring that higher traffic volumes are not affecting the security of the platform.

Creating Scalable Solutions

In this case, the scalable solution will be one whose infrastructure can adapt to support exponential growth without losing performance and functionality. What this usually means for Web3 is a solution that can handle sudden spikes in users, data, and transactions without breaking a sweat.

For example, think of a blockchain-based gaming startup that records some in-game assets and then suddenly experiences an influx of users. The system should seamlessly scale out for such situations and avoid slowdowns or crashes.

At IdeaSoft, we take pride in devising solutions that consider flexibility and longevity. Through modular architectures, we give startups the ability to iteratively adapt or scale their platforms so that organic growth or sudden spikes in use can be accommodated with ease.

These architectures also let us integrate security layers that evolve with the product and create a more sustainable growth model. This ensures that the underlying infrastructure stays strong, responsive, and secure regardless of scale or pace.

Balancing Security with Goals of Scaling

Scaling for Web3 startups isn’t just about how to handle an increasingly large group of users, but how to handle such users while keeping the standards of security high. Security should be embedded by design into the growth strategy right from day one rather than being an afterthought. Negligence here leads to vulnerabilities that scale with the platform, putting the company and its users at risk.

Consider a social media network on Web3. It might be designed with the user-centric approach in mind, considering privacy and decentralization for its users. The larger the user base, the higher the possibility of a security breach – say, unauthorized access to their data or breaching any account.

Here, at every step of scaling up, planning is crucial in terms of security, too. An increase in the number of users brings with it a corresponding scaling up of safety measures.

A strong growth strategy, therefore, should consider these issues early on. Integrating security protocols and adaptable infrastructures from day one ensures that the foundation for a Web3 startup is solid, reducing risks in the longer term. Safeguarding user data engenders trust, too – the most valuable weapon in the competitive world of Web3.

Securing Your Startup as You Scale

Security becomes all the more important as startups reach their scaling milestones. Most early-stage companies find themselves at a vulnerable stage, as they move only by growth and scale, assuming security would be retrofitted. In Web3, security needs to grow with the business, where operations are decentralized and smart contracts are run.

Testing Tools

End-to-end security begins in the development stage. There are a number of security testing tools and solutions that can help with identifying common vulnerabilities, ensuring code consistency and standards, and automated detection of logical errors:

Olympix offers pre-audit tools for use by developers during the coding process that can significantly optimize the use of paid audit time.
Mythril and Slither are static analysis tools for smart contracts written in the Solidity coding language and are used early in the development cycle to ensure that vulnerabilities are detected and corrected before moving on to more resource-intensive security processes like formal verification or external auditing.
OpenZeppelin provides security-optimized templates, pre-audited libraries, and secure coding standards;
Pwned Nomore and others provide automated bug-hunting services for blockchain developers and integrate into the development workflow to identify vulnerabilities in smart contracts and blockchain protocols.

Formal Verification

Formal verification uses mathematical and logical techniques to rigorously prove that a system behaves as expected. Developers specify certain properties or invariants (e.g., “funds cannot be transferred without proper authorization”) and formally verify that these properties always hold true within the code. Tools like Certora and K Framework by Runtime Verification check that the code meets these specifications under all possible inputs and execution paths.

Audits

Auditing is a manual or semi-automated process conducted by security experts who review the code to identify potential vulnerabilities and logical errors. Audits typically involve both static analysis (code review, using tools to check for common vulnerabilities) and dynamic testing (simulating various conditions to observe behavior). CertiK, Quantstamp, Trail of Bits, and Hacken are among the most popular audit providers.

Bug Bounties

Bug bounties incentivize ethical hackers and developers to find and report vulnerabilities in a protocol, platform, or application. Bounties play a critical role in maintaining security by leveraging the collective expertise of the developer community. Immunefi, HackerOne, and Code4rena are among the most popular bounty platforms.

Real-Time Monitoring

While audits and bounties are necessary, they alone are not enough. Last year, Web3 projects spent $1B on audits and still lost $2B to hacks, most despite having multiple audits. The real battle begins after the audited smart contracts go live, and that’s where monitoring solutions come into play.

When choosing a monitoring provider, projects should consider these key performance metrics:

Breadth of coverage: it’s a multichain world and a monitoring solution must cover not only the chains you are building on now, but also networks you might expand to in the future or where your users may bridge your tokens;
Detection volume and accuracy: detecting most of the hacks is just half the battle, doing it with the least number of false alerts is the other;
Advanced warning: contrary to popular belief, it is possible to detect hacks before they do damage, but correctly identifying the target of an exploit with enough time to react is what separates a great detection solution from a merely functional one;
Automated response: the ability to easily create automated triggers can be the difference between a scare and catastrophic loss.
Proven track record: the radical transparency of blockchain data means that barriers to entry are low, so look for signs of real customer traction.

Hypernative is the leading real-time monitoring and automated response solution in Web3 security. The platform continuously monitors over 45 chains, a list that includes the vast majority of EVM blockchains and L2, including Linea, Mode, Flare, and Astar, as well as Solana, Bitcoin, Cardano, Stellar, Stacks, THORChain, and Tron.

Hypernative’s Web3 security system detected 99.5% of hacks last year with less than 0.001% false positive rate, performance unmatched in the industry. About 98% of the hacks were detected more than 2 minutes before the first transaction.

That combination of high-accuracy and an actionable window of opportunity is the sweet spot for automated actions. The Hypernative Web3 security platform’s automated agents are no-code, user-defined proprietary logic that lets projects set up automated onchain actions including pausing contracts, changing protocol parameters, moving funds to cold storage, unwinding positions, and more.

Now, over 150 leading Web3 projects are using the solution from our partner Hypernative to secure $100B worth funds, a list that includes Balancer, Blockdaemon, Chainalysis, Chainlink, Circle, Consensys, Ethena, Etherfi, Galaxy, Linea, Quantstamp, Solana, Starknet, and Uniswap. The system has helped save over $500M of funds to date.

Summary

Security is not an end state, but a process. And as Web3 enters its mass adoption stage, it is no longer optional. To onboard the next billion users, the industry must make use of all of Web2’s best practices as well as invent and adopt tools and solutions unique to Web3.

Revolutionizing Traditional Banking: The DeFi Advantage

Over the last few years, Decentralized Finance (DeFi) has grown from a niche topic into a full-fledged ecosystem. With promises of open, transparent, and permissionless financial services, DeFi has drawn the attention of developers and users, but most importantly, banks. Some might feel that traditional financial institutions perceive decentralized finance for banks as some kind of disruptive threat.

Explore how DeFi can streamline your financial processes—speak with our experts!

Let us help you figure it out, and correctly draw up project requirements for your business.

Still, an emerging perspective is that banks and DeFi could coexist or, better yet, thrive together. Going forward, one can also consider DeFi solutions encapsulated inside traditional banking frameworks, perhaps even opening new lines of financial products.

We see that the legislation for digital assets is increasingly being applied across countries and industries. The future will see a convergence between fiat and crypto, positioning DeFi as part of a new range of banking products. For example, we have already discussed how digital currencies benefit banks, and in this article want to discuss the benefits of DeFi for banks.

Table of contents:

Potential Benefits of DeFi for Traditional Banking
Is Cooperation Between DeFi and Traditional Banking the Key for Millennials & Gen Z?
Steps for Traditional Banks to Embrace DeFi
How IdeaSoft Can Support Your Bank Growth
Future Predictions for Traditional Banking and DeFi
Summary

Potential Benefits of DeFi for Traditional Banking

At first glance, it might seem counterintuitive for banks to embrace DeFi. After all, its core value proposition seems to be bypassing traditional financial intermediaries. However, banks have a few strong incentives to integrate DeFi solutions into their product lines. It all lies in the DeFi banking innovation.

First, consumer demand is shifting. As more and more “digital citizens” grow older and build financial muscle, demand seems sure to grow for digital-first, decentralized financial services. These consumers prize three things:

Speed
Transparency
Control

As you probably guessed, all these things are at the core of DeFi. Using the products on offer with DeFi will allow banks to reach this developing demographic, too, while they continue reassuring more conservative customers with regulation and its attendant trust.

Moreover, the financial benefits of DeFi for banks can unlock additional sources of revenue. Since interest rates are currently meager, financial institutions are eyeing ways through which new revenues could be generated. Protocols under DeFi come with yields that are considered higher than savings accounts and, therefore, present an opportunity for banks to offer more attractive financial products to their customers.

There are numerous DeFi opportunities for banks here. By merging fiat and crypto within DeFi, banks can create a new class of financial products that tap into the advantages of both systems.

Is Cooperation Between DeFi and Traditional Banking the Key for Millennials & Gen Z?

At the core, millennials and Generation Z truly think about money differently than earlier generations did. In fact, what they want is flexibility, speed, and transparency. Nobody wants to go to a physical branch anymore or wait several days for a transaction to happen.

Instead, they seek out digital-first, user-friendly financial solutions. Meanwhile, cryptocurrencies and DeFi platforms align perfectly, offering 24/7 access, lower fees, and direct peer-to-peer transactions.

In fact, people often say that changes in traditional banking come at a snail’s pace. It just clings to its legacy systems that may be perceived as outdated by the younger generation. But what if it is possible to apply DeFi for financial institutions? Could it be that the combination of DeFi’s innovation with the trust and security of traditional banks finally gives us the ultimate solution? How to create a mobile banking app with DeFi banking innovation in mind?

Banks adopting decentralized finance could find in a partnership the best of both worlds for Millennials and Gen Z. It’s the place where younger generations can get tech-savvy, borderless services through a DeFi platform, with banks providing security and regulatory stability that is often missing in DeFi.

Steps for Traditional Banks to Embrace DeFi

We have a neobank development case study. Based on it and our experience in DeFi, here are 2 points banks must carefully consider.

The Regulatory Roadblocks

To apply the benefits of DeFi for banks, financial institutions must overcome several key hurdles. They revolve around:

Regulation
Compliance
Trust

Historically, the financial sector has been tightly regulated. Every transaction must comply with Anti-Money Laundering (AML) rules, Know Your Customer (KYC) protocols, and a range of other regulatory frameworks designed to prevent illicit activities.

Regulation and compliance are crucial for banks to adopt DeFi. Without clear guidelines on how to integrate crypto-based financial services into the existing regulatory frameworks, banks will hesitate.

And it’s not just about having laws on paper. Banks must also fully understand the risks and mechanisms of DeFi, particularly when it comes to AML compliance in the world of crypto. As crypto assets are more “fluid” and, in some cases, anonymous, they present a significant challenge. DeFi platforms often operate without intermediaries, which can make tracking and reporting suspicious transactions a tricky proposition for traditional financial institutions.

Integrating DeFi mechanics can enhance your enterprise’s financial operations

Explore how DeFi can streamline your financial processes—speak with our experts

Nevertheless, the legislative environment is slowly catching up. Several countries, including the U.S. and those in the European Union (MiCA), are beginning to draft clearer rules around digital assets and decentralized finance. This momentum is essential for banks to feel comfortable entering the DeFi space.

As regulations tighten and become more precise, we’ll likely see more banks exploring partnerships with DeFi platforms or developing in-house DeFi solutions. DeFi for financial institutions is just a new source of innovative ideas.

The Role of User Experience (UX)

While regulatory compliance is crucial, the most significant factor for DeFi’s success within traditional banking lies elsewhere. The most important thing is that the user experience of DeFi must be understood by people. Only when DeFi solutions are intuitive and accessible to the everyday user will we see widespread adoption.

Today, DeFi platforms, while powerful, are often difficult for the average user to navigate. Many concepts are barriers to entry for those unfamiliar with the crypto world. We mean:

Gas fees
Private key management
Multi-chain wallets
Swapping
Stacking
Bridges

To get improved banking with DeFi, these complexities must be abstracted away. The ideal future is one where users don’t even realize they’re interacting with a DeFi system. They simply experience a seamless, intuitive banking product.

Think of account abstraction and chain abstraction as examples. We envision a future where users have wallets they access using their face or fingerprint instead of complicated seed phrases. Where transactions happen seamlessly, and users pay gas fees not in ETH, but in the same currency they’re using for their transaction.

This level of simplicity is the key to making DeFi accessible to the masses. Banks, which are well-versed in delivering user-friendly products, can develop this kind of seamless interface for DeFi.

IdeaSoft has a professional design team dedicated to clients` products success. Our design projects are published on our official Behance page. All of them are made with the latest UI/UX trends of 2024 in mind.

How IdeaSoft Can Support Your Bank Growth

While most of the world’s banks look toward new frontiers, many are looking at DeFi as a value addition to their service offerings and internal operations. A few of the most popular ones are asset tokenization, private or public CBDC development and DeFi integration into banks’ lending & borrowing processes.

Let’s examine solutions banks consider:

Central Bank Digital Currencies (CBDC). Central banks around the world are in the pilot phase of digital currencies, upgrading financial transactions and making them secure. Digital forms of national currencies powered by blockchain technology will enable instant, low-cost payments with more transparency and simplify cross-border settlements. In turn, banks adopting CBDCs will make it much easier for themselves to cope with a rapidly transforming digital economy.
DeFi lending and borrowing protocols. Large financial institutions have begun to implement DeFi-influenced lending platforms. Such platforms offer a host of benefits for banks, including the capacity to provide more flexible loan products, reduction of risks because of collateralized lending models, and automation of key processes with smart contracts. Decentralized lending is also in demand by customers for more transparency and self-control over their financial decisions.

decentralized finance for banks — *Example of lending mechanism with the integration of DeFi mechanic.*

Tokenization of traditional assets. Major banks are exploring tokenization, which is an on-blockchain way of digitally representing ownership of assets. This enhances the liquidity of relatively illiquid assets, say real estate or fine art, and allows them to be more easily and securely tradable on a digital platform.

We are proud to share that recently, our team has started cooperation with Credit Agricole, one of the largest banking groups in Europe. This cooperation is an exciting step toward the direction of digital financial futures. As a blockchain vendor, our role will assist Credit Agricole with innovations and adapt to new market demands by using cutting-edge blockchain solutions.

Future Predictions for Traditional Banking and DeFi

This will be a process of integration that will not happen overnight, and the trend is already in this direction. Banks are watching the space closely now, with some making their first moves. For instance, some financial institutions have been studying exactly how they can use stablecoins to settle transactions with far greater efficiency. Decentralized finance banking benefits have been actively examined worldwide.

Full-scale adoption, however, requires many factors to fall in place. Compliance, regulation, and AML have to be appropriately addressed. The banks will require some time to understand the complete risk profile of the DeFi platforms and get their internal systems tuned for that. Most importantly, the user experience of DeFi in traditional banking needs to come to a level that is practically indistinguishable from traditional banking products.

The industry is moving towards this. In the next few years, we expect to see banks offering DeFi solutions as part of their regular product lines. The key will be to create simple, compliant, and user-friendly products that appeal to both crypto enthusiasts and the average consumer alike.

Conclusion

As we have discussed, Millennials and Gen Z seek financial solutions that are faster, more transparent, and technologically modern. What they think about decentralized finance speaks volumes, and traditional banks can’t afford to turn a blind eye to it.

That would mean that, with the incorporation of DeFi advantages for banking, financial institutions can offer state-of-the-art services by meeting the expectations of a new digital generation and retaining all the features that make them trustworthy and regulated.

Challenges for DeFi in banking industry exist, but so do opportunities. And our FinTech software development services can help you overcome it! Contact us through the form below.

Maximizing Enterprise ROI Through Decentralized Finance Strategies

Traditional finance no longer helps enterprises to maximize their returns in today’s competitive landscape. Decentralized Finance acts as a game-changer in decreasing transaction costs and providing better investment returns. However, the overwhelming majority of businesses still face technical barriers in using DeFi solutions due to regulatory uncertainty.

DeFi reduces costs by eliminating middlemen and automating intensive financial processes. The benefits of DeFi for enterprises mean better capital management, faster settlements, and high yields with strategies like yield farming, liquidity mining, and staking. However, understanding the technology and legal frameworks and ensuring data security remain uphill tasks.

That’s where we come in: our expertise breaks down technical barriers, making it easy to ensure compliance and help you optimize returns with DeFi.

Let’s talk about how DeFi solutions can cut costs in your organization!

Let us help you figure it out, and correctly draw up the requirements for your project

Table of Content:

DeFi Strategies to Maximize Enterprise Returns
DeFi-Based Asset Management for Enterprises
DeFi Challenges and Tips to Overcome Them
Case Studies and Real-World Application
Cost of DeFi Development vs. ROI
Summary

DeFi Strategies to Maximize Enterprise Returns

DeFi provides different mechanisms for generating high returns with minimum involvement for the enterprise. Using blockchain technology, businesses can leverage innovation in new financial mechanisms that outpace traditional finance. DeFi solutions for boosting enterprise returns include yield farming, liquidity mining, staking, and lending.

Yield Farming and Liquidity Mining

Yield farming and liquidity mining have been among the most in-demand passive income DeFi strategies that have benefited enterprises. These business strategies add value to DEX by locking their assets in the protocol’s liquidity pools. In turn, enterprises are rewarded with tokens or sometimes through fees.

Most of these strategies have predictable returns and competitive earning rates, putting idle enterprise assets to work for them. For example, via liquidity mining, an enterprise is engaged in acquiring transaction fees and governance tokens that may potentially increase in value over time. Examples of DeFi for enterprise financial returns include Uniswap, Aave, and SushiSwap. They deploy liquidity and rewards without active management of their assets.

Staking

Staking involves the locking of crypto assets in order to support a blockchain network, and in return, it gives rewards. It is one of the best ways for enterprises to receive rewards while minimizing risk, as their assets are held in smart contracts. Businesses can stake their assets across various platforms depending on their willingness to take on risk and expectations of return. A more advanced option is to employ restaking in crypto.

“Staking is a secure low-risk opportunity that can be preferred by businesses for passive rewards earning while actively contributing to blockchain ecosystems. With the right strategy in place, enterprises can optimize returns without sacrificing liquidity or operational flexibility.”

Staking Strategy	Pros	Cons	Use Cases	Tips
Diversification	Reduces risk, balances rewards	Requires managing multiple assets	Multi-blockchain projects, large enterprises	Spread assets across different platforms
Risk Assessment	Ensures long-term profitability	Requires market research	High-reward staking pools	Analyze risks vs. rewards before staking
Lock-up Periods	Stable rewards	Limited liquidity during lock-up	Long-term projects, predictable returns	Choose platforms with flexible lock periods
Reinvestment	Compounds rewards	Complex to manage manually	High-frequency trading firms, DeFi-focused	Automate reinvestment with smart contracts

Lending and Borrowing

DeFi’s lend-and-borrow mechanisms unlock capital for businesses in the form of flash loans and liquidity pools. In contrast with traditional loans, DeFi loans entail no intermediaries involved and are available at lower fees with faster approval times. They could tap into flash loans to immediately access liquidity without the need to tie up upfront collateral and thus manage the short-term capital requirements or arbitrage accordingly.

Smart contracts form an important component in DeFi lending, and they go a long way in automating transactions and reducing counterparty risks by a huge margin. In enterprise use cases, an automated trustless system would better streamline finance with more enhanced capital efficiency and better returns.

DeFi-Based Asset Management for Enterprises

Large enterprises are now considering DeFi for financial gains. Unlike traditional asset management, DeFi gives businesses the power to transparently invest in many different DeFi protocols without the involvement of an intermediary. DeFi benefits for businesses include reduced costs and increased overall yield potential. This is even easier with DeFi funds or asset management protocols that offer structured, automated solutions to manage digital assets.

These protocols can allow business investors to invest in liquidity pools, yield farms, staking platforms, and more in exchange for fair and decentralized governance.

Asset Management Protocol	Advantages	Best For	Risk Level	Management Style
Yearn Finance	Automates yield farming and vault strategies	Enterprises seeking automated yield optimization	Medium	Passive (automated vaults)
Balancer	Customizable index funds, multi-asset pools	Companies wanting diversified portfolios	Low-Medium	Active (adjustable weightings)
Set Protocol	Strategy-driven, rebalancing portfolios	Firms looking for algorithmic portfolio management	Medium	Semi-active (rebalancing)
dHEDGE	Hedge fund-style management, non-custodial	Businesses requiring risk-adjusted investment	Medium-High	Active (human-managed funds)
Enzyme Finance	Fully decentralized, customizable portfolios	Large enterprises seeking control and transparency	Medium	Active (self-managed)

Enterprises can automate yield optimization through decentralized services, allowing them to maximize returns without constant oversight. With DeFi asset management, businesses can deploy capital strategically across multiple protocols, reaping the benefits of automation and decentralized governance.

DeFi Challenges and Tips to Overcome Them

While promising DeFi development ideas offer unparalleled opportunities to the enterprise, DeFi returns for enterprises indeed come with considerable challenges. The two major pain points include the vulnerabilities of smart contracts and uncertainties in regulation. Each enterprise that wants to adopt a DeFi solution should be careful about these risks to preserve their assets and make them compliant.

Smart Contract Vulnerabilities

DeFi protocols use smart contracts to automate transactions. However, they can also have bugs or be subject to exploits. To minimize this risk, an enterprise should only use audited DeFi protocols. Audits provide some level of assurance that smart contracts have been subjected to great testing for security flaws.

Besides, DeFi investments should be diversified across a wide variety of platforms. This will make the process of distributing risk easier and avoid a single point of failure in the event that one protocol has vulnerabilities.

Unclear Regulations

DeFi is actually a gray area when it comes to regulation. Most jurisdictions have yet to provide a legal framework for decentralized finance. This might be a headache for an enterprise that has to ensure compliance with financial laws. However, there is a way out of this uncertainty.

Enterprises will be ahead of the game in terms of compliance when partnering with blockchain development company that understand the evolving legal landscape. Further, enterprises can also choose to work with platforms that proactively address regulatory concerns and operate within set guidelines.

Our experience teaches us that the powerful way of mitigation can only be achieved by working with audited and compliant protocols. An example of this could be our mid-sized enterprise client that had to deal with ambiguity in regulatory understanding while attempting to enter the DeFi space. They were confidently able to choose secure, well-regulated platforms and consulted our team for the successful integration of DeFi into their operations with no issues in compliance.

Case Studies and Real-World Application

Here are 2 case studies from our IdeaSoft experience.

BridgeTower

DeFi for enterprise ROI, DeFi benefits for businesses , DeFi for financial gains

BridgeTower Capital is a leading provider of digital asset infrastructure and private equity venture building. The company integrated blockchain technology with our help. We did a global marketplace development for BridgeTower and helped it uniquely bring products constructed with regulatory-compliant adherence to a large audience.

Now, our client offers an institutional gateway to Staked Securities, Custom NFTs, Turnkey Customized Institutional Staking, Financial Products, and Web 3.0 entities.

LiveCGI

LiveCGI is a promising startup that presents a complete CGI studio toolkit. We participated in the development of NFT functionality for LiveCGI Streaming Platform. This is an exciting use case showing the integration of blockchain technology into the streaming business.

Now, the integration allows the creation of NFTs from saved video content on StreamMyScreen. The platform supports connecting Ethereum and SKALE blockchains, ensuring secure transactions and ownership verification.

Let’s talk about how DeFi solutions can cut costs in your organization!

Let us help you figure it out, and correctly draw up the requirements for your project

Cost of DeFi Development vs. ROI

While DeFi development requires much in terms of initial investment, it is justified by the potential to bring in high returns in the long run. In turn, the cost of developing DeFi applications depends on many factors: complexity, the number of features, the need for security audits, and others.

Defi Development Cost

Here are the numbers:

Simple DeFi platform. A simple decentralized application can be developed with elementary functionality, like token swap or staking, which can cost from $50,000 to $150,000.
Advanced DeFi solution. If the platform is complex, containing a number of smart contracts, liquidity pools, yield farming mechanisms, or some specific governance features, then the price will oscillate between $200,000 to $500,000.
Ongoing costs. Maintenance, upgrades, and security audits are ongoing expenses that need to be factored in. Security audits alone can run upwards of $10,000 to $100,000, depending on the scope.

While these costs may seem steep, the potential ROI from DeFi adoption can far outweigh the initial investment. Combined with ways to reduce Web3 development cost, you can make your investments even more profitable.

ROI of DeFi Development

Once-implemented, DeFi for enterprise ROI comes in the form of:

Reducing transaction fees by cutting out intermediaries like banks and payment processors.
Generating passive income through yield farming, staking, and liquidity mining.
Increasing liquidity by accessing decentralized markets can lead to more capital flow and investment opportunities.

For example, companies adopting DeFi lending or any form of liquidity pools create annual yields that range between 5-15% depending on market conditions. In addition, the cost efficiency from automating the transactions via smart contracts results in operations efficiency, improving the ROIs further.

Conclusion

DeFi helps enterprises optimize their returns through strategies like yield farming, staking, and lending in the DeFi market. In addition, decentralized financial tools support the objective of corporations to reduce costs and enhance passive income streams by introducing a whole new market with very minimal barriers.

This would give flexibility and efficiency to an enterprise in the modern-day digital economy. If you are looking for a reliable partner, our FinTech software development services can help you.

What’s the most profitable DeFi niche right now? A Guide for Startup Founder

The rise of the DeFi niche opened up lucrative opportunities for startup founders eager to capitalize on this explosive market growth. The global DeFi technology market size was valued at $55.58 billion in 2022, and the market is projected to grow from $59.26 billion in 2023 to $337.04 billion by 2030, exhibiting a CAGR of 28.2% during the forecast period.

Innovative revenue models, such as those used by DEXs like Uniswap, have generated significant transaction fee revenue for liquidity providers. They demonstrated a robust and sustainable financial ecosystem.

Moreover, the increasing adoption of DeFi solutions across various use cases highlights the versatility and global reach of this technology. As startups venture into this space, they can leverage a wealth of innovative tools and frameworks, supported by proven success stories and a growing user base. For example, our team at IdeaSoft has successfully developed decentralized insurance platform for BridgeMutual.

In this article, we will explore what is the most profitable DeFi niche, the challenges startups face when entering this space, and actionable steps for successfully launching your DeFi project.

Table of contents:

Top Emerging DeFi Niches in 2025
Most Profitable DeFi Niches in 2024
Key Considerations for Founders Entering DeFi
Summary

Explore how DeFi can streamline your financial processes—speak with our experts!

Let us help you figure it out, and correctly draw up the project requirements tailor to your unique business objectives.

Top Emerging DeFi Niches in 2025

Here are the top DeFi niches based on our R&D department research, IdeaSoft business team and Jesse Pollak opinion. All of them are profitable decentralized finance sectors.

On-Chain Undercollateralized Credit

Undercollateralized credit is making waves because traditional systems require excessive collateral, locking out many borrowers. With on-chain identity tools such as Basenames, Aut Labs, and Builder Scores, individuals and institutions can now borrow without needing to over-collateralize.

These systems assess user reputation and activity, lowering barriers for those with a track record of reliable participation. This is crucial for unlocking liquidity at scale in decentralized economies.

Decentralized Prediction Markets

Prediction markets have been around, but decentralizing them is a game changer. Polymarket and Augur are prime examples here. Platforms allow users to bet on future events, from elections to sports results, without intermediaries.

This structure democratizes access to speculation and creates a transparent way for participants to trade knowledge. The volume of these markets is expected to grow significantly, particularly in sectors like politics and finance. A 2023 study showed the global prediction market valued at $8.2 billion, and with blockchain-based solutions, this number is set to skyrocket.

Decentralized Identity and Governance

Decentralized identity offers bright DeFi investment opportunities as it is a cornerstone for future successful decentralized interactions. With privacy and security being ongoing concerns, decentralized identity solutions offer a way forward. They help users prove who they are without centralized authorities, ensuring that governance processes are both transparent and resistant to manipulation.

The implementation of these systems will streamline everything from decentralized autonomous organization (DAO) governance to voting in national elections, making it a top DeFi niche by 2025.

Real-World Asset Tokenization (RWA)

Startups are increasingly turning to blockchain to tokenize real-world assets, like property or art. Why? This helps to unlock liquidity. By breaking large assets into smaller, tradeable tokens, owners can sell fractions of an asset.

This opens up investment opportunities to a much broader audience. In 2023, RWA projects raised over $400 million in funding, with growth projected to triple by 2025.

On-Chain Social Feeds and Creator Tools

Creator platforms today are riddled with inefficiencies. On-chain social feeds aim to fix this by providing creators with direct control over their content, free from centralized control or exploitative revenue models. Open data allows for better user experiences and enables creators to monetize more effectively.

With improved economics, these platforms will empower both creators and consumers, resulting in 10x better outcomes compared to traditional Web2 platforms. This is why this DeFi niche is among core decentralized finance trends.

Based on what we’re building with clients, 2025 will be defined by a shift towards more utility-driven DeFi tools. Whether it’s RWAT or unlocking credit with decentralized identities, these niches aren’t just theoretical — they’re already proving profitable.
Andrei Lazorenko, Co-founder and CEO of IdeaSoft

Most Profitable DeFi Niches in 2024

The DeFi niche continues to expand, with various niches offering significant potential profits. However, building and scaling high-return DeFi projects comes with substantial costs, including smart contract development, audits, marketing, and ongoing platform upgrades. Here’s a comparative analysis of some of the top DeFi niches, showcasing their potential profits versus development costs.

DeFi Niche	Example	Potential Profit	Development Costs	ROI (Return on Investment)
DEXs	Uniswap generated over $1 billion in fees in 2022.	High (up to 100%)	Medium to high ($100K – $400K)	High ROI due to volume and fees
Decentralized Insurance	Nexus Mutual offers coverage for smart contract failures.	Medium (20-40%)	Medium ($100K – $300K)	Medium ROI due to market trust and payouts
Lending and Borrowing	Aave and Compound dominate the lending market, with billions in TVL.	High (50-100%)	Medium to high ($100K – $300K)	High ROI, especially in bull markets
Wallets with Farming and Staking	MetaMask and Trust Wallet facilitate staking and liquidity farming.	Medium to high (20-70%)	Low to medium ($50K – $300K)	High ROI due to volume and fees

The crypto landscape is moving by leaps and bounds. We recommend you investigate what is regenerative finance: it can be the next promising trend in crypto.

Key Considerations for Founders Entering DeFi

If you are interested in DEX development, we have an article about essential features for DEX to succeed. Next, we want to discuss 3 of the most pressing issues for any DeFi or Web3 project you must think about in advance.

Regulatory Challenges: KYC and AML Compliance

Regulation in the DeFi niche remains a gray area, and different jurisdictions apply varying degrees of oversight. Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements are particularly complex, as decentralized protocols often operate across borders without centralized control.

Many startups struggle to maintain a balance between decentralization and regulatory compliance. This is especially acute in the case of developing new stablecoins. We have a stablecoin development guide that can clarify some pitfalls and regulatory complexities.

Our team can help founders implement compliant KYC/AML systems without compromising user privacy or the decentralized nature of the platform. We specialize in setting up lightweight compliance frameworks that satisfy regulators while maintaining user trust.

We have a demonstrative example in our portfolio regarding compliance with legal requirements. When we worked on Securitize, our team had 10-12 engineers. At the same time, we had a team of 20-25 lawyers from a specialized New York law firm who monitored and helped to describe the project documentation and the legal part. Except that, they also worked on the legalization of all processes.
Herman Stohniiev, Co-founder and CTO at IfeaSoft

Security and Smart Contract Risks

Smart contract vulnerabilities have been responsible for some of the largest DeFi hacks in recent years. For many years, the most damaging cyber attacks have targeted weaknesses in smart contracts, leading to over $6.45 billion in losses. In the first half of 2023 alone, approximately $471.4 million was stolen on chain. Ensuring airtight security is essential but difficult, especially when speed-to-market pressures lead to rushed development.

Our security-first approach ensures that smart contracts are rigorously audited before deployment. Smart contracts are written only in the best programming languages for smart contract development. We partner with industry-leading audit firms and conduct continuous testing on platforms post-launch. By doing this, we reduce the risk of exploits and ensure platform security as it scales.

Recent high-profile DeFi hacks, like the $200 million exploit on Euler Finance, remind us that one vulnerability can destroy a promising project. That’s why security isn’t an afterthought; it’s the foundation.
Rostyslav Bortman, Haed of Blockchain Department

Liquidity Building Strategies: Tokenomics and Scaling

Liquidity Strategy	Pros	Cons
Yield Farming	Attracts liquidity fast, offers high initial rewards	High inflation rates can dilute token value
Staking Rewards	Encourages long-term participation and stability	Requires complex tokenomics and can lead to staking monopolies
Token Incentives	Aligns user interests with project success, creates governance	Unsustainable if rewards are too high, leading to token dumping

DeFi investment opportunities are endless. At the same time, DeFi platforms live or die by liquidity. Startups must think strategically about how they incentivize users to deposit assets and create deep liquidity pools, especially in the early stages. Poorly designed tokenomics or staking models can lead to liquidity crises, leaving the platform exposed and unscalable.

Our blockchain development company provides a comprehensive liquidity-building roadmap that includes:

Custom tokenomics
Liquidity mining strategies
Scalable reward structures

This involves creating sustainable yield farming programs, staking incentives, and governance tokens that align user incentives with the long-term success of the platform. In addition, we advise on methods to bootstrap liquidity using novel strategies like cross-chain liquidity protocols. We have an interesting article on how to build a successful Web3 startup. It is worth your attention.

Conclusion

As the profitable decentralized finance sector evolves, several niches stand out as particularly profitable and ripe for innovation. These include:

Decentralized prediction markets. They are set to capitalize on a growing appetite for outcome-based betting.
Real-world asset tokenization. It unlocks liquidity by integrating tangible assets into the blockchain.
Decentralized identity and governance. This top DeFi niche offers solutions to enhance transparency and security in various sectors.

Founders who act now and position themselves in these emerging trends can benefit significantly from early market entry. With the right guidance, tools, and community engagement strategies, success is within reach. We invite you to reach out for more insights into launching your DeFi startup or explore our FinTech software development services. Together, we can transform innovative ideas into successful ventures.

What is SocialFi? Top SocialFi Projects 2024

The growing popularity of Web 3.0 and DeFi projects is due to people’s tiredness of centralization. They do not want to overpay intermediaries for services that can be obtained directly. Banks and institutions are focused on financial gain rather than the good of the people. This explains the popularity of blockchain projects that offer independence from third parties.

Decentralization is also leading to the emergence of social networks of the future, which will offer independence from corporations that make money from content. Web3 trends are already underway, and the SocialFi projects are prime examples. In this article, we will discuss what is SocialFi and show you the top SocialFi projects in 2024.

How SocialFi Can Help Your Brand?

SocialFi fosters brand visibility and adoption by incentivizing engagement through token rewards. Fans can earn tokens for participating in discussions, sharing content, or contributing ideas. Integrating social features with decentralized finance can create a vibrant ecosystem where members feel connected, valued, and incentivized to actively participate in the brand’s growth.

Thinking of implementing socialfi features for your brand or product? Let’s connect and create a correct list of requirements for your project!

Table of contents:

What is SocialFi?
Key SocialFi Features
Top SocialFi Projects in 2024
Future of SocialFi
Summary

What is SocialFi?

SocialFi stands for Social Finance. This industry consists of platforms that combine the principles of social media and DeFi.

Users can control their data and generate revenue through content and advertising on this platform. This can solve many of the problems of Web 2.0 social networks, such as privacy protection and freedom of speech.

In SocialFi projects, users do not have to provide their personal data when registering, as the platform does not collect or store them. This ensures that users’ privacy is protected. In addition, the platform allows users to express their thoughts by controlling dangerous content.

What is SocialFi crypto in numbers? According to DappRadar research, the transaction volume in the SofialFi industry has grown 305% in 2023 compared to 2022. The rise of SocialFi is revolutionizing how we think about ownership of social media data and online identity.

If you are looking for a reliable IT partner, our IdeaSoft team can help you with social media app development!

Why do social networks and decentralized finances are a killing combination?

So far, we are living in a Web 2.0 era in which a massive disruption to the Internet has a negative impact on quality of life. For example, in the fall of 2021, there was a massive outage of WhatsApp and Instagram that brought retail, news media, and medical facilities around the world to a halt for hours.

The Web 2.0 economic model is being replaced by SocialFi, based on Web 3.0. It demonstrates the value of each individual and provides an opportunity to profit. This fundamentally changes the approach to content creation and distribution:

Users become direct beneficiaries
Creators of social platforms get tools that monetize user contributions
Users themselves are fairly rewarded with tokens for time and effort spent on social presence on the web

According to CoinGecko, SocialFi coins have a combined market cap of over $5 billion and a 24-hour trading volume of over $200 million as of 12th May 2024.

Key SocialFi Features

The main reason for SocialFi’s growing popularity is that SocialFi crypto projects can address the flaws of Web 2.0 social networks. Let’s look and compare traditional online media information flow versus blockchain based onces.

Now when you see how the traditional online social media works, let’s look in the process when the blockchain technology is involved. Check the table below.

As you see, the introduction of blockchain foster transparency and creates additional reward system opporutities which is not videly used or applied in terms of traditional online media user engagement activities.

Among the key problems that SocialFi projects can solve are:

Personal information protection and user privacy. When registering on Web 2.0 social networks, users are forced to provide their personal information, which can be stolen by hackers or used by companies for marketing purposes. In contrast, SocialFi’s platform uses a decentralized approach that does not require submitting personal information.
Freedom of speech. Decentralized social networks, which are controlled by network members, lack censorship and user blocking by a central authority. However, a special algorithm based on artificial intelligence is created to control dangerous content.
Digital copyright. The SocialFi platform enables automated copyright systems that allow authors to sell their works directly to buyers without intermediaries. Content creators get paid in full for their work, and users can be assured that they are buying original content and not infringing on copyright.

SocialFi features are attracting new users to the industry. It is gaining popularity thanks to its decentralized nature, which solves the key problems of Web 2.0 social networks. Nevertheless, it is as complicated to develop the SocialFi platform as to develop the DeFi exchange platform.

What challenges does SocialFi face?

A great challenge that SocialFi industry faces is scalability. You probably know that the more users join the blockchain, the slower it works. For social networks, high-speed content processing is critical. SocialFi has the task of overtaking Facebook, where 2 billion users post 510,000 comments, like 4 million posts, and upload 136,000 photos daily. This is already a huge volume. And if you add a financial system to it, it is a real challenge.

One of the protocols (DeSo) scales better than others, as it was specially created for SocialFi’s needs. The developers claim the network can process 80 posts per second for 4 million users, while X processes 6,000 posts per second for 300 million users.

Top SocialFi Projects in 2024

Perhaps the most notable representatives of the SocialFi sphere can be considered metaverses. Users there are anonymous and create and monetize content daily. Below is a top SocialFi crypto list from our IdeaSoft team.

CyberConnect

CyberConnect is a pioneering decentralized social graph protocol putting users and developers in charge of their digital presence, content, and relationships using cutting-edge Web3 tech. Built on Ethereum and other EVM-compatible blockchains, it paves the way for decentralized social applications (dApps). With CYBER tokens, users wield governance power, cover transaction costs, and snag premium usernames (CyberProfiles), all of which are vital for steering the ecosystem’s dynamics and operations.

This SocialFi crypto project harnesses innovative technologies like account abstraction to streamline user onboarding and ensure seamless interaction across various blockchains, thus elevating user experience and breaking down the usual barriers to blockchain entry. By prioritizing accessibility, CyberConnect isn’t just creating a user-friendly space but also paving the way for widespread adoption.

Entre

Entre is a social network for entrepreneurs and investors. This crypto SocialFi platform allows them to communicate with each other, find investment opportunities, and make deals. Entre uses blockchain technology to ensure secure and transparent transactions between users.

Users can find jobs and employees on Entre, share experiences and ideas in virtual co-working spaces, hold general meetings, find investors, and work remotely. The platform allows monetizing content through paid broadcasts, posts, comments, and private business events.

Cheelee

Cheelee is one of the top SocialFi projects 2024. It is a video platform on the blockchain. Content makers create and publish short videos and are paid for doing so. Other users are paid to watch videos in their feeds.

In Cheelee, every new user gets free NFT points. These points have certain features, such as attention span, battery, memory, and frame, which affect how many NFT points a person will earn for watching the feed. The points can be upgraded and improved with a platform token, which is farmed for watching content.

Qrolli

Qrolli’s Quest Hub is an innovative gaming system with many challenges and rewards to engage users. Participants earn QR tokens to access exclusive trading features. Users monetize their social content with dynamic NFTs and have the opportunity to work together to foster partnerships in the cryptocurrency community.

Qrolli is structured completely differently than other SocialFi crypto projects. It was created by combining the best elements of social networks with a system of decentralized finance. Qrolli guarantees users security, transparency, and full control over their assets to an extent that is unparalleled in traditional social networks.

DeSo

DeSo was created with the goal of scaling SocialFi applications to serve 1 billion users. The protocol is named after the first letters of the words “decentralized” and “social”. Developers around the world are creating other similar applications using the DeSo blockchain.

This ecosystem is suitable for NFT artists, software developers, and investors. It comprises a full-featured DAO builder, metaverse, NFT marketplaces, voice and video platforms, and search engines. A separate platform connects DeSo with X and other social networks.

Here, you can blog, use messenger, make stories, and more. In addition to the standard set that conventional social networks have, DeSo provides opportunities to create a wallet, earn tokens and invest them in projects, buy and sell NFT, participate in NFT auctions, and receive royalties. DeSo hosts online games, contests, and meetups. Moreover, DeSo enables users to explore various web3 apps to earn money, enhancing its appeal to a broader audience.

Future of SocialFi

Many companies that operate in traditional social networks are beginning to actively invest in innovative social blockchain projects for obvious reasons:

SocialFi is a fundamentally new concept of user interaction on which the Web 3.0 paradigm is based
The gradual decentralization of finance accelerates the creation and development of SocialFi projects managed by users
The potential of Social Finance protocols is enough to solve the key problems of traditional social networks

CITE According to former Binance CEO Changpeng Zhao, “In a Web3 environment, the connection between values, people, and economies is essential, and if these three elements come together to build an ecosystem, that will accelerate the mass adoption of the blockchain technology and crypto”.

The intensive formation of the ecosystem will accelerate the mass adoption of crypto and blockchain technologies. The world needs new-format social projects that empower users and incentivize them to join the ecosystem. The future of SocialFi is bright.

Summary

The transition from Web 2.0 to Web 3.0 and traditional social networks to SocialFi is inevitable, as the need to protect users’ interests is becoming increasingly acute. What problems will the use of SocialFi solve:

Partially eliminate censorship and allow more free speech
Increase privacy because the network is not controlled by corporations
Massive amounts of personal data will not end up in monopolist databases
Users have full control over the distribution of their content and monetization
Integrated digital tokens become a fast and secure transaction method
NFT ensures the integrity of content and ownership
Securely protects accounts from fraudsters
Guarantee that moderators will not deactivate a user’s account

For SocialFi to stay ahead of the competition, it needs to constantly evolve and improve the system to retain users who came during the first wave of popularity and attract new ones. If you have an idea of developing the best blockchain for SocialFi industry purposes, feel free to investigate our blockchain development services. Our IdeaSoft team is ready to help you with any of your Web3 project ideas.

UI/UX tricks for better dApp user conversions

In today’s tech landscape, the journey doesn’t end with launching a product; it’s just the beginning. As a tech provider deeply invested in our clients’ success, we’ve witnessed a shift in priorities. Many of our longstanding Web3 partners now grapple with the challenge of retaining users and enhancing their experience in an increasingly competitive arena.

Take niches like crypto wallets or DeFi platforms, for example. These are saturated markets where standing out is crucial. It’s not just about offering a product. For our IdeaSoft team, developing UI/UX for crypto wallet is about waging a battle for user attention and loyalty. One way to achieve this is by leveraging the power of bento UI, a flexible and user-friendly interface design system that enhances the overall user experience.

Recognizing this paradigm shift, we’re pioneering a new approach: crafting UX-optimized pages that transcend traditional platforms. By focusing on enhancing user experience to improve conversion, we empower our clients to thrive in relentless competition.

Backed by a seasoned design team with years of experience, including specialists immersed in Web3 UX for over 7 years, we bring unparalleled expertise to every project. It’s not just about creating websites. It’s about shaping digital experiences that captivate and convert.

Our article will discuss how to increase user engagement with UX and top UX design tips to improve website conversions.

UX and CX are the top priorities for web3 and fintech platforms in 2024! Why?

As our partners and lasting clients navigate the ever-evolving landscape, the focus shifts to retaining users and elevating their journey within a fiercely competitive environment. Meeting this challenge demands unconventional strategies and a commitment to continuous enhancement of the customer experience within your application. Our design team has over 7 years of expetise in web3 niche and knows how to tackle these demands head-on, ensuring that your platform remains engaging and compelling amidst the intensifying competition.

Table of contents:

Understanding UX and Its Impact on dApp Users
12 Key Principles of UX Design for Conversion Optimisation
3 Practical UX Design Tips for Boosting Website Conversions
How to Measure the Impact of UX on Conversion Rate
Summary

Understanding UX and Its Impact on dApp Users

UX design is the process of developing products (websites, apps, programs) that are useful, easy to use, and pleasant to interact with. In other words, it is the design of systems that should lead the user from the starting point to the endpoint by the shortest route and without difficulty.

UX design means the intersection of programming, design, and testing. The scope of work may vary depending on the specifics of the Web3 solution, but they often include the following:

User research
Character creation
Developing wireframes and interactive prototypes
Design testing

Conversion optimization with dapp development, UX must advocate for users and put their needs at the center of all design and development efforts.

12 Key Principles of UX Design for Conversion Optimisation

Drawing from the expertise of our Senior UI/UX designer, Anastasiia Lisova, let’s delve into the 12 key principles of Web3 product UX:

Text contrast for accessibility. Ensuring optimal text contrast is not just about aesthetics but also about accessibility. Anastasiia utilizes tools like A11y Color Contrast Checker to guarantee readability for all users. At the same time, the main text size should be at least 16px for desktop and 14px for mobile screens.
Minimalism in design. Every element on the screen should serve a purpose. Eliminate unnecessary distractions to avoid clutter. By keeping the interface clean, users can focus on what truly matters, enhancing their overall experience.
Familiar patterns for seamless interaction. Leverage existing user patterns to reduce cognitive load. Users can effortlessly navigate through the Web3 interface by incorporating familiar design elements, leading to higher engagement and conversion rates.
Strategic color usage. Limit the color palette to one accent color for primary actions and one secondary color. Avoid using pure black (#00000) and opt for shades to maintain visual harmony. This not only enhances aesthetics but also guides users towards key interactions.
Deliberate button design. Design destructive buttons such as cancel, exit, or delete with caution. Require users to click on them deliberately to prevent accidental actions. Incorporate additional confirmation prompts before executing destructive actions to prioritize user control and safety.
Typography for clarity. Choose simple and concise fonts like Nunito Sans, DM Sans, Inter, or Source Sans for the main text. Clarity in typography enhances readability, ensuring that users can effortlessly consume content.
Error handling with guidance. When errors occur, provide users with actionable solutions rather than just displaying generic error messages. Offer clear guidance on how to rectify the issue, fostering a sense of empowerment and reducing user frustration.
Multi-sensory information design. Avoid relying solely on color to convey information, as it excludes users with color blindness. Incorporate alternative cues, such as icons or textual indicators, to ensure inclusivity and accessibility for all users.
Spacing for visual hierarchy. Maintain adequate spacing between elements to prevent clutter and enhance visual hierarchy. Well-defined spacing creates breathing room, improving overall readability and comprehension.
Feedback through loading states. Implement loading states to signify system responsiveness, especially for actions with delayed responses. Visual feedback assures users that their interactions are acknowledged, enhancing their sense of control and understanding.
Consistency in iconography. Maintain uniformity in iconography by using the same line thickness across all icons. Consistency fosters familiarity, making it easier for users to interpret and interact with interface elements.
Progress indicators for guidance. Incorporate progress bars for actions that involve multiple steps. Progress indicators offer users transparency regarding their current position in the process, reducing ambiguity and improving task completion rates.

In contrast, such approaches as thin fonts, large headers at the top of the page, low text contrast, auto-scrolling, and carousel slider on the home page may become the great disadvantage for your platform or dApp UX.
Anastasiia Lisova, Senior UI/UX Designer at IdeaSoft

Use these UX design hacks to improve website conversions. They have helped our team build dozens of Web3 products that drive the best user journey for our clients.

3 Practical UX Design Tips for Boosting Website Conversions

Here are 3 practical tips to improve conversion rate with UX design.

Use a clear CTA button

A call to action (CTA) is a button used on a website to motivate users to take a specific action. The most common and effective CTAs are: “Download a trial”, “Sign up for updates”, “Download an app”, “Book a consultation”, and many others.

Using a clear and attractive call to action button improves the user’s interaction with the website. This attribute should be located on every page of the website. Statistics confirm that resources with clear CTAs have higher conversion rates.

Besides, having clear wording for such a call to action significantly improves the overall user interaction. But do not forget, the button will work only if it is located in a prominent place on the page and attracts his or her attention with its design and content. Therefore, creating a new website or redesigning the current site, take into account the following points:

Varying the color of the CTA plays a significant role in its effectiveness. Use colors for this button that contrast with the color scheme of the entire web page.
Orient the text of the CTA to specific actions. Avoid using passive verbs. The text should be subtle and unobtrusive but active enough to encourage the user to perform the proposed action.
Content of the CTA should be as concise as possible – no more than 5 words.

Thus, in website UX design, a clear and visible call to action is a prerequisite for effective interaction between the site and the user. If you need a reliable UX/UI partner, we at IdeaSoft know how to design Web3 app as well as have experience in redesigning UX for conversion optimization.

Eliminate your 404 errors

If, as a result of the search, the visitor gets an error (in most cases, it is a 404 error), he or she simply goes to another site in search of a faster service. In other words, you lose a potential user. How to avoid this:

First, find out for which queries 404 errors are displayed and fix them as soon as possible.
Instead of letting your site go to the standard “Error 404: page cannot be displayed” page, customize error messages so that users find them friendly and attractive.
Use engaging images and create a pleasant background on the error page to reduce annoyance and smooth out the user’s inconvenience.
Try to take advantage of this situation. Based on your website’s specifics, offer the visitor the option to go to the main page, use the search function, read the promotions, or just entertain him or her.

Unfortunately, it is almost impossible to completely eliminate error messages. Still, you can turn this drawback in your favor, and timely identification and elimination of such defects will bring your resource site to the ideal UX.

Use authentic images

Authentic design is about creating something unique to your brand, avoiding replication or imitation of competitors. It’s crucial that your design not only reflects your brand’s unique selling proposition (USP) but also resonates with your target audience. This approach requires a foundation in thorough user research and understanding of your audience.

By aligning your design with your USP and audience preferences, it becomes a powerful tool in attracting and engaging customers from the very first click. This strategic approach ensures that your design acts as a compelling call-to-action, enticing visitors and driving website conversions.

How to Measure the Impact of UX on Conversion Rate

IdeaSoft design team recommends to use a structured approach to measure the impact of UX on conversion rate:

Analytics tools. Utilize analytics tools like Google Analytics, Hotjar, or Mixpanel to track user behavior on your platform or dApp. Pay attention to metrics such as page views, time on page, and user flow to identify areas of improvement.
A/B testing. Implement A/B tests to compare different versions of your UX design to improve website conversions. Test variations in layout, color schemes, call-to-action (CTA) placement, and other design elements.
Heatmaps. Use heatmapping tools like Plerdy to visualize where users click, scroll, or hover on your website. Heatmaps provide valuable insights into user engagement and can highlight areas for UX optimization.
Benchmarking. Compare your conversion rate and UX metrics against industry benchmarks or competitors. This provides context and helps set realistic goals for improvement.
Iterative improvement. Continuously iterate on your UX design based on the insights gathered from the above methods. Monitor how these changes impact conversion rate over time and adjust your strategy accordingly.

Summary

Remember, the key lies in continuous testing, analysis, and adaptation to ensure that the website evolves alongside user needs and preferences. With these UX conversion optimisation tips in mind, you can create seamless digital experiences that drive higher conversions and foster lasting customer satisfaction and loyalty.

How to Build a DePIN Project: A Comprehensive Guide

Decentralized Physical Infrastructure Networks (DePINs) are to be among the main trends in the cryptocurrency market in 2024. This is due to their real-world utility and the ability to take market share from Big Tech.

DePINs are blockchain protocols that enable the creation, maintenance, and operation of physical hardware infrastructure on an open and decentralized basis. They use tokens to incentivize communities (not corporations) to build decentralized physical infrastructure networks from scratch.

Need DePIN Development Services?

The DePIN industry covers infrastructure for wireless communications, computing resources, data storage, artificial intelligence, electric vehicle charging, telecommunications, sensors, and much more. Let us know in which area you want to develop and we will properly draw up the requirements for your future product.

In this article, we want to discuss the Solana DePIN ecosystem and how to develop DePIN project.

Table of Contents:

Importance of building a strong and efficient DePIN project
Blockchain platforms for building DePIN
How to choose the right platform for DePIN development?
What platforms do we use at IdeaSoft when building DePIN?
Best practices for building DePIN
Summary

Importance of building a strong and efficient DePIN project

DePIN has something that is rare in the cryptocurrency sector: real-world utility. DePIN services such as wireless communication and cloud computing can attract demand from various industries, including consumer, media, gaming, and proof-of-work (PoW) mining.

More importantly, most DePINs compete with centralized technology companies rather than the powerful central banks and financial institutions that decentralized finance (DeFi) is trying to replace. Instead of reinventing the wheel, DePINs are creating open and decentralized markets for the same services traditional technology companies offer.

Developing DePIN for computing, wireless connectivity, data storage, artificial intelligence, and service marketplace has advantages. And they are huge compared to centralized Big Tech. Here they are:

Resistance to censorship. DePIN is a permissionless environment with no centralized organization that can censor users or disable services.
Single-point outages. In June 2023, Amazon Web Services (AWS) faced global outages that affected the online operations of several companies in the United States. Food delivery apps could not fulfill orders, smart home devices did not respond to requests, websites did not load, and users complained about the inability to log in to their accounts. DePINs will not face such single-point failures, as these networks are managed by independent nodes scattered worldwide.
Transparency and immutability. DePINs use blockchain ledgers to settle and record transactions. The data stored in public blockchains is accessible to everyone and cannot be changed or deleted.
Open market. DePIN is an impartial open market that does not discriminate against small and individual buyers. For example, due to the high demand for computing resources, it is difficult for individuals and small corporations to purchase high-performance GPUs, which centralized suppliers usually reserve for large customers.
Cost-effectiveness. Some DePIN services, such as decentralized data storage, offer users cheap alternatives to traditional counterparts. For example, according to a report by Messari, the monthly cost per terabyte offered by DePIN is 70% lower than that of centralized providers such as Amazon S3.
Privacy. There is growing distrust in how large tech companies handle sensitive data they receive from customers. Users are concerned about the misuse of their personal data. Instead, they can rely on trusted DePIN service providers with built-in privacy technologies.
DePIN crypto coins. DePINs use crypto incentives to attract infrastructure providers and end users. For example, wireless provider Helium allows customers to earn cryptocurrency tokens when they share their location data. Creating DePIN tokens stimulates the influx of new users and helps identify areas that need better network coverage and improved service quality.

Cloud computing is one of the main markets in which DePIN players try to win back from centralized technology companies. According to Mordor Intelligence, the cloud computing market will generate $68 billion in revenue in 2024, with Amazon Web Services, Microsoft, Google, Alibaba, and Salesforce remaining the largest players.

The global cloud computing market will grow to $1.44 trillion by 2029. Messari assumes that DePIN will be able to attract at least a portion of the global revenue from this sector. Similarly, we see potential in DePIN’s wireless networks, which collectively earned $0.8 million in 2023.

Top blockchain platforms for DePIN development

Our IdeaSoft team has thoroughly researched this topic. We have investigated major blockchain networks and made conclusions regarding their fit for DePIN development. Here are the top 3 blockchain platforms for building DePIN.

Solana

Solana is one of the best depin projects for 2025. Its attractiveness stems from its combination of low transaction costs and high throughput, making it ideal for DePIN projects on Solana. Despite recent developments with Denсun and the emergence of promising Layer-2 solutions, Solana maintains its appeal due to its unparalleled transaction throughput capabilities.

Extensive throughput capabilities are indispensable in the context of DePIN on Solana, where a significant volume of data needs to be rapidly processed and managed. The platform’s architecture incorporates a unique feature known as storing state. The functionality of this is similar to dedicated memory storing which further enhances Solana’s suitability for data-intensive projects like DePIN.

Moreover, Solana’s ecosystem has been bolstered by notable projects like Helium, a prominent example within the decentralized infrastructure space. Helium’s transition to Solana from its native blockchain network in late 2023 underscores the platform’s favorable environment and developer-friendly ecosystem.

Solana’s combination of low transaction costs, high throughput, and developer-friendly architecture makes it an optimal choice for DePIN coins development. Solana blockchain ensures efficient data processing and management while fostering a conducive environment for project growth and innovation.

IOTA

IOTA represents a distributed ledger technology (DLT) tailored for the Internet of Things (IoT). DLT operates as a network of distributed nodes, synchronizing digital data and value across various locations without a central administrator, unlike centralized databases. This is why DePIN on IOTA is highly attractive.

With its DAG architecture, IOTA can promptly validate transactions in parallel, enhancing scalability and transaction speeds. Additionally, without miners, IOTA transactions bypass delays associated with waiting for inclusion in newly created blocks.

Transactions on the IOTA network are processed without incurring fees, eliminating the need for miners typically incentivized to process transactions. At the same time, the IOTA Tangle boasts one of the lowest energy footprints among public DLTs. This energy-conscious design reflects IOTA’s commitment to sustainability, distinguishing it in the realm of blockchain technologies.

Traditional blockchains face challenges in processing small transactions due to limitations like block size, congestion, high transaction costs, and computational overhead. IOTA’s Tangle addresses these obstacles through parallel processing, the absence of miners, and fee elimination, making it ideal for handling microtransactions, especially in IoT devices and applications.

COSMOS

Cosmos network stands as a continually expanding ecosystem of interconnected applications and services. It leverages hubs, the Tendermint consensus algorithm, and the Inter-Blockchain Communication (IBC) protocol to facilitate secure communication between blockchains.

Each Cosmos application functions as its own blockchain, unaffected by network congestion commonly experienced on Ethereum. Moreover, blockchain functionality and validator sets can be tailored to specific requirements.

DePIN on COSMOS can be built vertically, horizontally, or as they see fit. They may opt to implement core technological alterations or introduce new features. As more depin crypto projects build on Cosmos, network effects amplify. Each blockchain can seamlessly and securely communicate with others using the IBC protocol.

How to choose the right platform for DePIN development?

Here’s a step-by-step guide to help you choose the most suitable blockchain platform for DePIN development:

Define DePin project requirements. Consider aspects such as the type of decentralized application you’re building, scalability needs, transaction speed, consensus mechanism, interoperability requirements, governance model, and any specific features or functionalities you require.
Assess scalability and performance. Look for platforms that offer high throughput, low latency, and efficient consensus mechanisms to ensure smooth operation even during peak usage.
Evaluate security and stability. Look for platforms with robust security protocols, battle-tested smart contract languages, formal verification capabilities, and a track record of preventing security vulnerabilities and attacks.
Review developer tools and ecosystem. Evaluate each platform’s developer tools, libraries, SDKs, documentation, and community support.
Сost and resource requirements. Evaluate each platform’s cost implications and resource requirements, including transaction fees, gas fees, hosting costs, development costs, and ongoing maintenance expenses.

You can choose the right platform for DePIN development by following these steps.

What platforms do we use at IdeaSoft when building DePIN?

The platforms we choose at IdeaSoft for DePIN development services are contingent upon several key factors:

Blockchain infrastructure. Our selection heavily relies on the maturity and relevance of blockchain infrastructure specifically tailored to DePIN’s requirements. This includes considerations such as the availability of similar niche projects for potential collaboration or interoperability, as well as the ease of integration for future enhancements.
Tech stack familiarity. The expertise and familiarity of our development team, along with the broader technological landscape, play a crucial role in platform selection. We prioritize platforms that align with our team’s proficiency, ensuring efficient development and maintenance processes.
Application architecture and business logic. The architecture of the application and the underlying business logic significantly influence our platform choice. Whether it’s the need for privacy, scalability, or specialized features like IoT integration, we tailor our selection to best accommodate DePIN’s specific requirements.

IdeaSoft tip: For instance, if privacy is paramount, opting for a sidechain on Cosmos offers a closed ecosystem that can be customized to your product/project needs. Alternatively, if scalability is a priority, Solana emerges as a favorable option due to its open and scalable nature. Similarly, for projects requiring seamless integration with IoT devices, leveraging the capabilities of platforms like IOTA proves advantageous.

By carefully assessing these factors, we ensure that the platforms we employ for building DePIN are optimally suited to realize its objectives effectively. We can develop DePIN on Solana, COSMOS, IOTA, and several other blockchains.

Best practices for DePIN project development

Here are the 5 best practices you must adhere to develop a top Web3 DePIN ecosystem.

Environmental stewardship

With the proliferation of digital platforms, the environmental impact of data storage and processing has become more apparent. Implementing a sustainable DePIN involves prioritizing eco-conscious practices, such as leveraging renewable energy for data centers, optimizing algorithms to reduce energy consumption, and championing electronic waste recycling initiatives. By reducing its carbon footprint, DePIN can contribute to global endeavors to address climate change.

Community participation

Active community engagement lies at the core of DePIN’s sustainability. By nurturing an inclusive environment where diverse perspectives are valued and respected, DePIN can tap into collective wisdom to effectively address societal challenges. Initiatives for community involvement, such as open forums, feedback mechanisms, and participatory decision-making processes, empower stakeholders to meaningfully shape the platform’s development and governance.

Ethical handling of data

In the digital era, safeguarding data privacy and security is imperative. Sustainable implementation of DePIN involves robust data governance frameworks that prioritize user privacy, consent, and data security. Adhering to ethical data practices (anonymization, encryption, and user-controlled data access) fosters trust among users and upholds principles of transparency and accountability.

Economic resilience

Sustainability encompasses economic viability alongside environmental and social aspects. Developing a sustainable DePIN necessitates establishing a resilient economic model that ensures the platform’s long-term viability. This may involve exploring diverse revenue streams while maintaining affordability and accessibility for all users.

Ongoing innovation

Sustainability requires a commitment to continual innovation and enhancement. DePIN’s sustainable development entails embracing emerging technologies, devising innovative solutions to societal challenges, and adapting to evolving user preferences and needs. DePIN can remain adaptable and resilient amidst change by cultivating a culture of innovation and experimentation.

Summary

Building a DePIN project involves several critical steps, from conceptualization and design to deployment and maintenance. By following this guide, you can create a robust and efficient decentralized physical infrastructure network that leverages the power of blockchain technology to solve real-world problems. The future of DePIN projects is promising, and with careful planning and execution, your project can significantly contribute to this innovative field.

Our DePin development company offers end-to-end solutions to help you bring your vision to life. Our team of experts provides comprehensive support throughout the entire development lifecycle, from initial concept and architecture design to implementation, testing, and deployment. We leverage the latest technologies and best practices to ensure your DePIN project is secure, scalable, and efficient.

With Ideasoft, you can be confident that your DePIN project is in capable hands. Contact us today to learn more about depin development services that meet your specific needs and drive your business forward.

How to Reduce Web 3.0 Software Development Costs

Web3.0 development cost optimization is a hot topic because the blockchain domain constantly evolves, and it becomes costlier to develop Web3.0 projects. Entrepreneurs seek for ways to save money, launch quick MVPs, and develop them on saved funds. One of the most effective strategies is leveraging IT outstaffing to access skilled developers at reduced costs without compromising quality.

Our IdeaSoft team understands this. This is why we have prepared this article together with our top management to show you the best ways to optimize Web3.0 costs in your future or current project.

Looking to optimize your software development process and cut down costs without compromising quality?

Our expert team specializes in innovative strategies to streamline your project, ensuring maximum efficiency while minimizing expenses. Ready to revolutionize your software development approach and save on costs? Reach out to us today for a personalized consultation!

So, let`s start discussing how to optimize Web3.0 development cost in the short and long term!

Table of Contents:

Understanding Web3.0 Development Costs
How Much Does Web3 Application Development Cost?
How to Optimize Web 3.0 Costs: Our Recommendations
IdeaSoft Web3.0 Case Studies
Summary

Understanding Web3.0 Development Costs

There are 5 main factors affecting your Web3.0 software development cost:

Team composition. Web3.0 projects require a multidisciplinary team comprising developers, blockchain experts, designers, project managers, and legal advisors. The size and expertise of the team will directly impact development costs. Highly skilled professionals command higher rates, so a larger team with specialized expertise may increase costs.
Tech stack. The technology stack for Web3.0 development typically includes blockchain platforms, smart contract languages, frontend frameworks, and backend technologies. Popular choices for blockchain platforms include Ethereum, Polkadot, and Solana, each with its own ecosystem and Web3.0 development tools. For smart contract development, languages like Solidity (primarily used on Ethereum) and Ink! (designed for Polkadot) are widely employed to create decentralized applications (dApps). Developers often rely on Ethereum and Binance for DEX due to their scalability and extensive ecosystems. These tools form the backbone of Web3.0, facilitating secure, efficient, and scalable development.
Blockchain choice. The choice of a blockchain platform can significantly impact development costs due to differences in developer expertise and ecosystem maturity. For example, platforms like Ethereum have a well-established developer community and extensive documentation, which may lead to lower development costs compared to newer or less mature platforms. Additionally, the availability of developers proficient in a particular blockchain’s programming language (e.g., Solidity for Ethereum, Rust for Substrate-based chains) can affect costs.
Product complexity. Simple applications like token-based systems or basic decentralized finance (DeFi) projects may require less development effort and, therefore, lower costs. Conversely, complex projects involving intricate smart contracts, decentralized governance mechanisms, or novel blockchain integrations will likely incur higher costs due to the increased development time and expertise required.
Similar project existence. If existing solutions or open-source libraries can be leveraged, development time and costs may be reduced. Conversely, completely novel projects will require thorough investigation and potentially extensive discovery phases, leading to higher initial costs.

How Much Does Web3 Application Development Cost?

In addition to exploring the intricacies of developing Web3.0 applications, entrepreneurs frequently inquire about the overall financial investment necessary for their project. We want to note that outsourcing and outstaffing costs will greatly vary.

At IdeaSoft, we have a wealth of experience within the realm of Web3.0, such as the development of a cryptocurrency exchange platform (Biiteeu), a trade finance solution (Versara), and an NFT marketplace (Nfinity). The Web3 app development cost assessments are bespoke endeavors.

Typically, Web3 software costs start from $20,000 and can reach over $100,000. For instance, at IdeaSoft, our experts meticulously scrutinize each variable to devise a tailored cost estimation strategy. We ensure the delivery of a robust Web3.0 product without compromising on its caliber or functionality.

You can hire remote blockchain developers 24/7!

Contact us now and continue reading this article in order to learn more. Let’s create a cost-effective software solutions together!

How to Optimize Web 3.0 Costs: Our Recommendations

Here are 4 ways to optimize web3.0 development cost tested with our own experience.

Invest in the proper discovery phase

For sustainable success, investing in a comprehensive and meticulously researched discovery phase can yield significant savings of up to 50%. This holds true for budding startups embarking on new ventures as well as established projects seeking to expand their feature set.

Laying a solid foundation through thorough Web3.0 trends exploration and planning is a great advantage. This way, you can optimize Web3.0 development cost and mitigate unnecessary expenditures in the long run.

Opt for outsourcing teams

Outsourcing presents a compelling proposition for businesses delving into Web3 project development. Such teams offer significant cost advantages over the traditional approach of hiring full-time employees. Outsourcing software development allows you to access a global talent pool of specialized professionals without the overhead costs associated with recruitment, onboarding, and maintaining in-house teams.

Moreover, outsourcing allows for flexible scaling, enabling you to adapt resources according to project requirements. This way, you can also optimize expenditure. This approach not only minimizes fixed costs but also grants access to diverse skill sets and expertise, ultimately fostering innovation and accelerating project delivery.

To be honest, to pay less at the end is to pay more at the beginning. And as we know, quality always costs, and we all know about it. There are plenty of teams and individuals you can onboard, but as market conditions change rapidly, this becomes harder and harder. Even experienced teams sometimes can’t keep up with all the innovations.
Herman Stogniiev, CTO and Co-founder of IdeaSoft

Make small increments as often as possible

To effectively reduce Web3 development costs, follow these recommendations:

Define a clear project scope. Before diving into development, thoroughly define the project scope. Clearly outline the features, functionalities, and objectives of your web3 application. This prevents scope creep, which can lead to increased development time and Web 3.0 costs.
Select the right blockchain. Choose a blockchain platform that aligns with your project requirements and goals. Look for blockchains with active communities, as they offer better support, resources, and potential for collaboration. Conduct thorough research on transaction speed, scalability, consensus mechanism, and developer tools available.
Prioritize security with open-source tools and frameworks. Leverage open-source tools and frameworks to expedite development while maintaining a strong focus on security. Choose reputable libraries and frameworks that are actively maintained and have a track record of addressing security vulnerabilities promptly.
Consider modular development and scalability early on. Adopt a modular development approach to enhance flexibility, maintainability, and scalability. Break down your project into smaller, manageable modules or components that can be developed, tested, and deployed independently. This allows for easier iteration, integration of new features, and application scaling as user demands grow.

This is how you can effectively optimize Web3.0 costs while ensuring the successful delivery of your project within budget and timeline constraints.

Plan big, but at the start, it is better to focus on something small and achievable. Make small increments as often as possible and gather feedback.
Jeffrey Smith, Head of Business Analysts team

Choose experienced developers as they make less ineffective actions

With an experienced team with proven track records, you know you can pay more for the development yet save much more on further adjustments. But this is not the main reason for opting for experienced development teams. What is much more important – the high-end security that experienced teams offer.

Security is critical. Unfortunately, many Web3 projects, as we see, try to reduce their costs on code audits, leading to massive exploits, loss of funds, and overall product failure. So, to prevent such results for your Web3 project and not pay a high price at the end, it’s better to partner with a team experienced in Web3 development like IdeaSoft.

Consider a crew that:

Got proven track of delivered products
Has a partner-oriented approach
Built projects that people were/are using and love them
Comprises of geeks

Our team knows the market and has launched many projects. In the current bullish market, the speed and efficiency of the Web3 project launch are paramount. Our IdeaSoft team is sophisticated and knows all the solutions you can apply to your Web3.0 project to speed up all the processes. With us, you can launch MVP in a matter of weeks.

From my point of view, to make a great product and not spend a fortune while being on time with at least half of your deadline, you need to have great partners to work with. My recommendation is always to look for the right team! Consider choosing partners who will take the entire development process so you can focus on your core responsibilities! Choose wisely.
Simon Madry, Head of Business Development

IdeaSoft Web3.0 Case Studies

Here are 3 examples of Web3.0 projects confirming our deep expertise.

Asymetrix

Asymetrix is an Ethereum-based decentralized and non-custodial protocol developed by IdeaSoft. It enables users to deposit stETH and have a chance to win valuable staking rewards. The protocol addresses the challenge of low yields in traditional staking by pooling together generated yields and distributing them randomly and asymmetrically to a single user, ensuring even small stakeholders have a chance to win significant rewards.

What IdeaSoft team has implemented:

Stable decentralized protocol that allows users to deposit any amount of stETH
Transparent prize distribution functionality using Chainlink VRF
ASX (ERC-20) protocol token creation and implementation for governance and airdrop programs
DAO on Snapshop
esASX token for early adopters
BOOST system to reward LPs
MINI POOLS deposit feature

8 experts worked on Asymetrix and the first version was delivered in 6 months.

Dollet Wallet

Dollet is a non-custodial mobile crypto wallet designed to support ERC-20 standard tokens. It incorporates advanced features like pool deposits, yield farming strategies, and integration with multiple blockchain networks, including Ethereum, BNB Chain, Polygon, Arbitrum, and Optimism.

What IdeaSoft team has implemented:

Basic wallet functionalities: sending, receiving, bridging, swapping, buying crypto, and receiving notifications
Admin panel functionalities: log in/log out, user registration, asset management, pool deposits, farming strategy management, adjustable settings, and network switching;
Stargate API that enables bridge functionality
Pool investment smart contract that was developed using Solidity within the Arbitrum network
Keychain solution integration
KYC functionality supported by Wert technology

10 experts continuing working on the Dollet non-custodial crypto wallet while the first version was delivered in 6 months.

Rainmaker Games

Rainmaker Games revolutionizes the Play-to-Earn (P2E) gaming industry with in-game NFTs and a marketplace. The Rainmaker staking technology, developed by IdeaSoft, encourages liquidity and user participation. Advanced wallet whitelisting enhances platform security. Smart contracts ensure controlled token release. Integration with Uniswap V2 offers additional income opportunities. Furthermore, Rainmaker Games is exploring innovative x-to-earn models, expanding beyond gaming to create diverse earning opportunities through various user activities.

What our team has implemented:

Incentivized liquidity pools
Secure reward distribution
Enhanced security with wallet whitelisting
Token vesting mechanism
Integration with Uniswap V2 for functionality improvement

Protocol incentive model for liquidity pools
Metamask integration
Pool investment smart contract with token vesting

User-friendly interface design
Treasury smart contract for token distribution management

6 experts worked on the Rainmaker staking project and delivered it in 4 months.

Summary

Choosing the right Web 3.0 partner is crucial to optimize Web 3.0 development cost. You should consider the following aspects:

Technical strength and experience of the partner
Business reputation and service quality
Price competitiveness, innovation, and sustainability

If you want to quickly launch your Web3.0 project on the bullish market, we are here to help you! IdeaSoft team knows all the solutions you can apply to your Web3.0 project to speed up its development. We leverage account abstraction to simplify and enhance user interactions in your project. With us, you can launch MVP in a matter of weeks.

Blockchain Digital Identity: How to Develop Secure Systems

There is a growing need for people to conduct their affairs, access services, or conduct transactions online. In such an environment, authentication becomes an extremely important aspect. Existing authentication mechanisms suffer from problems such as cumbersome registration and verification processes, forgotten or leaked passwords, etc.

The rise of blockchain technology offers new possibilities to solve digital identity and security problems. The goal of our article is to discuss how to build a blockchain-based digital identity system. So, let’s start.

Thinking of creating a digital identity blockchain project?

Blockchain can provide a reliable environment with the needed level of security and autonomy. Blockchain technology can be used for digital identity authentication, digital certificate issuance, electronic contract signing, etc. In terms of digital certificate issuance, blockchain can be utilized as a trusted certificate storage and verification system to ensure the authenticity and validity of certificates. Eager to learn more? Read this article or schedule your free consultation with our tech expert to understand where to implement blockchain for your digital ID solution.

Table of Contents:

Understanding Digital Identity
Top Challenges in Centralized Digital Identity
Why Do We Need Blockchain for Digital Identity?
Building the Blockchain-Based ID: A Step-by-Step Guide
Benefits of Blockchain Digital Identity Systems
Case Study
Summary

Understanding Digital Identity

Digital identity is a virtual representation of your personal information. It is the key to verifying your online presence. Virtual identity allows you to confirm authenticity when conducting secure online transactions without presenting physical identity documents.

According to GMI research, the digital identity solution market size was valued at $25.2 billion in 2022 and is anticipated to register at a CAGR of 16% between 2023 and 2032. Digital identity is a part of our future that will inevitably influence how we live.

However, now centralized digital identities have several drawbacks that undermine trust in these solutions. This problem can be solved by using blockchain for digital identity management. And this is what we will discuss further.

Top Challenges in Centralized Digital Identity Management Systems

A blockchain-based identity system can play an important role. Traditional digital identity authentication methods have many problems, such as insecure data storage, susceptibility to tampering, and lack of privacy protection. Top 3 challenges in centralized digital identity management systems:

Security vulnerabilities. Centralized digital identity management systems are susceptible to cyberattacks due to the concentration of sensitive user data in a single location. A successful breach could lead to identity theft, data leaks, and financial losses.
Single point of failure. These systems represent a single point of failure, making them vulnerable to technical glitches or outages that can disrupt the entire identity verification process. This poses a significant risk to online services.
Privacy concerns. Centralized systems collect and store extensive personal information. Users may be uncomfortable with a single entity having comprehensive access to their data, increasing the risk of privacy breaches.

Blockchain, as a decentralized and tamper-proof distributed ledger technology, can provide a more secure and trustworthy solution for digital identity authentication. However, it is not as easy to develop blockchain applications as it may seem.

Why Do We Need Blockchain for Digital Identity?

First, blockchain can provide decentralized identity verification. Traditional identity verification usually relies on third-party organizations, such as governments and banks, which need to collect and store users’ personal information. It has the risk of data leakage and misuse. Blockchain digital identity, on the other hand, personal identity information can be encrypted and stored safely. Each user can have his or her private key, enabling decentralized identity verification. In this way, users can better control their personal data without relying on third-party organizations for identity verification.

Blockchain for identity verification — *An example of how blockchain technology helps in digital ID solutions*

Second, blockchain can provide tamper-proof authentication. Each transaction on the blockchain is recorded in a block and linked with the previous block to form a tamper-proof data chain. Once identity information is stored on the blockchain, it cannot be tampered with or deleted. This prevents identity information from being fraudulently used or tampered with, increasing the security and trustworthiness of identity authentication.

In addition, blockchain-based identity can provide anonymity and privacy protection. In the traditional identity authentication process, an individual’s identity information must be disclosed to multiple organizations, which can easily lead to the leakage of personal privacy. In contrast, blockchain can achieve anonymous storage and transmission of identity information through encryption technology, and only authorized institutions can decrypt and access the relevant information. This can effectively protect users’ privacy while ensuring the reliability of identity authentication.

Currently, there are several major challenges that all existing decentralized identity protocols face. These are the lack of properly integrated AML/KYC and transaction monitoring & transaction alerting. Blockchain solutions lack standard identity verification procedures that are present now in classical banking systems. Because AML and transaction monitoring are not yet integrated, this is the biggest argument why governments are not implementing digital identity yet.
Herman Stohniiev, Co-founder and CTO at IdeaSoft

Building the Blockchain-Based Digital Identity System: A Step-by-Step Guide

Here is a step-by-step guide that unravels the layers of establishing a cutting-edge digital identity platform.

Step 1: Defining the Scope and Objectives

The journey begins with meticulously examining the project’s scope and objectives. Understanding the specific requirements and goals allows for a tailored approach throughout development. Your comprehensive analysis at this stage will set the foundation for a blockchain identity management system that aligns seamlessly with the intended purpose.

Step 2: Selecting the Right Blockchain Platform

The choice of a blockchain platform is pivotal to the success of the digital identity system. Side chains connected to the main chain provide scalability and flexibility. Platforms such as Polygon, Orbit, and Optimism stand out, offering low transaction costs and customizable infrastructure. Delving into the intricacies of each platform ensures that the selected one aligns perfectly with the project’s demands.

Step 3: Designing the System Architecture

Crafting a robust system architecture is the cornerstone of a reliable digital identity framework. This phase involves the intricate process of designing the structure that supports the entire ecosystem. Attention to detail is crucial as it determines the system’s efficiency, scalability, and overall functionality. A well-thought-out architecture paves the way for seamless integration with blockchain development platforms and future scalability.

Step 4: Developing Smart Contracts for Identity Verification

At the heart of the blockchain-based identity system lies the development of smart contracts. A key focus here is on the data layer. It should be very well thought out and logical. This includes how the data is accessed, how access permissions are signed, who has it, how the data flow is formed, etc.
Read also: Use Cases of Shared & Based Sequencing

This development step involves intricate coding to ensure foolproof identity verification. Addressing complexities associated with the data layer is essential, as it directly impacts the accuracy and security of the digital identity system.

blockchain identity management system — *Rudimentary overview of blockchain-based digital ID infrastructure*

Step 5: Implementing Security Measures

Security is paramount in a decentralized identity management system. Robust encryption, cryptographic protocols, and secure data storage are integral components of this step. You must determine where all the data will be stored and who can access it.

Implementing multi-layered security measures ensures that the system remains resilient against potential threats. These measures safeguard sensitive user information and maintain the integrity of the identity verification process.

We at IdeaSoft have diverse expertise in blockchain projects, including identity management with blockchain. We recommend our clients always add an alternative recovery process to their systems if the digital identity is on the blockchain. This is what we will discuss next.

Need to know more about additional recovery processes for your digital identity blockchain solutions?

Let’s figure it out together and correctly draw up the requirements for your idea!

Step 6: Recovery Process

Acknowledging the possibility of unforeseen events, the implementation of a recovery process is vital. We advise implementing an additional recovery process so that in case of losing the private key from the digital ID, a person could somehow get his or her passport back. Such additional recovery processes can be:

Pre-integrated system with one of the banks where people also pass KYC
Government data providers
Any third-party trusted data provider that meets specific KYC requirements and is eligible to be integrated with your digital ID solution

This step ensures that there are mechanisms for swift recovery and restoration in case of a system failure or data breach. A well-defined recovery process enhances the system’s overall reliability and instills confidence in users.

Step 7: Testing and Deployment

Before the digital identity system goes live, rigorous testing is imperative. Thoroughly assessing every aspect of the system ensures that it meets the highest functionality and security standards.

Once testing is complete, the deployment phase begins, marking the transition from development to real-world application. It is best to deploy a digital identity platform on side chains or Layer-2 solutions like Orbit, Polygon Supernets, and Optimism.

Side chains and Layer-2 solutions guarantee low-cost transactions and convenient infrastructure customization possibilities. A seamless digital identity deployment on side chains and Layer-2 solutions sets the stage for the system to fulfill its intended purpose effectively.

Benefits of Blockchain-Based Digital Identity Systems

Here are the 5 top benefits of blockchain-based digital identity systems:

Enhanced security
User control and privacy
Reduced fraud
Interoperability and efficiency
Decentralization and trust

These benefits attract big players to create a sophisticated digital identity management system.

Digital Identity Management Case Studies

As noted, our IdeaSoft team has extensive experience in diverse Web3 projects, including digital identity blockchain projects. For example, we developed Securitize, but we also have several projects under NDA. We want to describe one of them below.

We were actively involved in a groundbreaking project, Securitize. It is a platform that boasts a sophisticated digital identity system. Within Securitize, this system plays a pivotal role in validating investors. After completing the Know Your Customer (KYC), individuals are granted a digital passport, solidifying their status as accredited investors. This passport authenticates their credentials and empowers them to issue security tokens across all partner platforms, streamlining the authorization process with a single verification.

Inspired by the success of Securitize, we have successfully implemented this innovative solution for one of our NDA clients. At the client’s request, the focus was on utilizing the digital identity system to validate and whitelist user wallets within their marketplace. This validation process becomes crucial when users intend to issue various digital assets.

To meet this requirement, a seamless integration was essential. We intricately connected the digital identity system with the smart contracts embedded in the platform. As a result, users can register once on the platform, undergo internal KYC procedures, and subsequently issue digital assets from their profiles. This user-friendly approach eliminates the need for repetitive KYC verifications every time a digital asset is issued, enhancing efficiency and user experience.

This comprehensive integration process was successfully executed within 3 months, from conceptualization to implementation. Our dedication to precision ensured that the integration was efficient and seamless. This way, we provided our client with a robust and future-ready digital identity solution.

Summary

Blockchain technology has great potential for digital identity verification. It can improve the security and trustworthiness of identities, protect privacy, increase efficiency, and reduce errors and fraud. We believe challenges can be gradually solved and overcome by continuously developing technologies for decentralized digital identity and expanding application scenarios. Blockchain technology will play an increasingly important role in the field of digital identity verification in the future.

Blockchain

Software

IT Consulting

Design

Blockchain

Software

IT Consulting

Design

How Can We Help?

Building a Scalable Foundation for Web3 Startups

Clearly Defined Business Objectives to Start Off

Creating Scalable Solutions

Balancing Security with Goals of Scaling

Securing Your Startup as You Scale

Testing Tools

Formal Verification

Audits

Bug Bounties

Real-Time Monitoring

Summary

Potential Benefits of DeFi for Traditional Banking

Is Cooperation Between DeFi and Traditional Banking the Key for Millennials & Gen Z?

Steps for Traditional Banks to Embrace DeFi

The Regulatory Roadblocks

The Role of User Experience (UX)

How IdeaSoft Can Support Your Bank Growth

Future Predictions for Traditional Banking and DeFi

Conclusion

DeFi Strategies to Maximize Enterprise Returns

Yield Farming and Liquidity Mining

Staking

Lending and Borrowing

DeFi-Based Asset Management for Enterprises

DeFi Challenges and Tips to Overcome Them

Smart Contract Vulnerabilities

Unclear Regulations

Case Studies and Real-World Application

BridgeTower

LiveCGI

Cost of DeFi Development vs. ROI

Defi Development Cost

ROI of DeFi Development

Conclusion

Top Emerging DeFi Niches in 2025

On-Chain Undercollateralized Credit

Decentralized Prediction Markets

Decentralized Identity and Governance

Real-World Asset Tokenization (RWA)

On-Chain Social Feeds and Creator Tools

Most Profitable DeFi Niches in 2024

Key Considerations for Founders Entering DeFi

Regulatory Challenges: KYC and AML Compliance

Security and Smart Contract Risks

Liquidity Building Strategies: Tokenomics and Scaling

Conclusion

What is SocialFi?

Why do social networks and decentralized finances are a killing combination?

Key SocialFi Features

What challenges does SocialFi face?

Top SocialFi Projects in 2024

CyberConnect

Entre

Cheelee

Qrolli

DeSo

Future of SocialFi

Summary

Understanding UX and Its Impact on dApp Users

12 Key Principles of UX Design for Conversion Optimisation

3 Practical UX Design Tips for Boosting Website Conversions

Use a clear CTA button

Eliminate your 404 errors

Use authentic images

How to Measure the Impact of UX on Conversion Rate

Summary

Importance of building a strong and efficient DePIN project

Top blockchain platforms for DePIN development

Solana

IOTA

COSMOS