How to Create an Algorithmic Stablecoin: The Ultimate Guide

Recently, the landscape of algorithmic stablecoins has seen significant growth and technological advancement. What was once an obscure concept has now gained widespread attention and recognition. As a result, there is a large demand for understanding this technology as well as stablecoin development companies.

At IdeaSoft, we have significant expertise in DeFi, stablecoins, and DEX/CEX domains. This is why we aim to shed light on this subject and delve into its critical aspects. This article will discuss what are algorithmic stablecoins, the benefits and challenges of algorithmic stablecoins, the algorithmic stablecoin development process, and real-world examples of successful technology implementations.

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Table of content:

What is an algorithmic stablecoin?
Benefits and challenges of algorithmic stablecoins
How to develop a stablecoin? Step-by-step guide
Real-world examples
Summary

What is an Algorithmic Stablecoin?

An algorithmic stablecoin is a digital asset which is governed by algorithms to reduce the price volatility. For example, if a coin is pegged to the U.S. dollar in the proportion of 1:1, its rate should always be close to the mark of 1 dollar. An algorithm handles the stabilization of algorithmic stablecoins. It keeps the exchange rate close to a given mark.

Unlike classic stablecoins such as Tether (USDT), algorithmic stablecoins are decentralized. The lack of a single control body for the asset circumvents counterparty risk. As a result, holders of these stablecoins rely on the algorithm.

Benefits and Challenges of Algorithmic Stablecoins

Algorithmic stablecoins operate decentralized. Their issuance, circulation, and burning processes are managed through smart contracts. This decentralization enhances the efficiency of investing in such stablecoins. It also facilitates rapid ecosystem scaling as the user base expands.

As a consequence of this decentralization, it is impossible to lock algorithmic stablecoins into users’ wallets. As for centralized stablecoins, they can be frozen or blocked by the issuing company. This practice has been already employed on several occasions.

However, algorithmic stablecoins face systemic challenges inherent to the DeFi industry. They include:

Exploitation of smart contract weaknesses. Attackers can take advantage of bugs in the smart contracts that manage the issuance and pegging of stablecoins. They can undermine the coin’s stability.
Oracles malfunctioning. Price manipulation can occur when oracles do not function correctly. Oracles are external data sources used to determine a stablecoin’s value. Manipulating these inputs can distort the stablecoin’s price.
Information attacks. Stablecoins are susceptible to information attacks aimed at panic selling and price manipulation. These attacks can trigger a loss of the coin’s peg.

This is why if you want to make an algorithmic stablecoin that will surpass all the competitors, you must consider all the possible challenges. IdeaSoft team take particular attention to smart contract security and apply 100% unit test coverage to all contracts that are being developed by our team. In addition we provide an in-house testing and debugging at the different stage of smart contract development to deliver a secure technology for you.

How to Develop an Algorithmic Stablecoin? Step-by-Step Guide

Here, we have discussed a step-by-step guide on how to build an algorithmic stablecoin.

Identify the blockchain platform you need

Selecting the right blockchain network is pivotal for developing your own algorithmic stablecoin. It will impact the security, scalability, interoperability, and cost-efficiency of your stablecoin. Here are key factors to contemplate when making your choice:

Security. It’s essential to pick a blockchain network with a strong security track record. It also must have advanced security measures. We mean multi-signature authentication, two-factor authentication, and robust encryption.
Scalability. The scalability of the blockchain impacts your algorithmic stablecoin transaction volumes. Choose a blockchain with swift transaction processing, high throughput, and reasonable transaction fees.
Interoperability. Interoperability is crucial for your stablecoin’s acceptance and utility. Choose a blockchain that can effectively interact with other networks and protocols.
Cost-effectiveness. Building algorithmic stablecoins can be costly due to gas fees and development expenses. Evaluate the cost-effectiveness of your chosen network and weigh it against its benefits.

Our experts at IdeaSoft are always here to provide advice and support. No matter what stage you are at in developing your algorithmic stablecoin, our specialists can always provide expert advice and assistance in selecting the right blockchain. Even if you want to develop a blockchain application, our team can help you.

Consider the maintenance of liquidity

For algorithmic stablecoin development you must think about liquidity in advance. Gauging the total liquidity necessary for establishing a stablecoin is paramount. It guarantees the stability and steadfast peg of the stablecoin to its underlying asset. The requisite liquidity hinges on both the total supply of the stablecoin and the prevailing market value of the underlying asset.

The level of collateralization must be administered diligently. Excessive collateralization can lead to diminished investor returns due to surplus liquidity. Conversely, inadequate collateralization may precipitate instability, erosion of trust, and dwindling liquidity, eventually causing the stablecoin to deviate from its intended peg.

Algorithmic stablecoins operate differently from collateralized stablecoins. They rely on algorithms and smart contracts to regulate their supply and maintain stability without traditional assets as collateral. Here are 3 basic sources of liquidity you can use to create your own algorithmic stablecoin:

Seigniorage. Stablecoins generate seigniorage (the profit derived from issuing and managing the stablecoin). When the stablecoin’s price rises above its target value, new tokens are minted, sold, or distributed to holders. This generates income. This income can be used to support and stabilize the stablecoin.
Liquidity pools. These pools can ease trading and maintain the stablecoin’s peg. Liquidity providers earn fees for their contributions.
Oracles and market data. Algorithmic stablecoins often rely on oracles to determine their supply adjustments. Accurate and reliable oracles are crucial to ensure that supply changes align with market conditions.

It’s important to note that proper governance and active management of these liquidity sources are essential to maintaining the stablecoin’s peg. They are also crucial for preventing significant price fluctuations. To develop an algorithmic stablecoin that surpasses the competition, you must consider liquidity in advance.

Develop a smart contract

Smart contracts are self-executing digital agreements. The terms of the arrangement between transacting parties are encoded into its code. These contracts trigger when predefined conditions are met.

In the context of creating algorithmic stablecoins, smart contracts serve to automate critical aspects of the coin’s behavior. They encompass stablecoin issuance and redemption, collateral reserve management, and the implementation of mechanisms for price stabilization.

Smart contract testing

Smart contract testing & debugging is of paramount importance when developing your own algorithmic stablecoin. These smart contracts are responsible for managing the stablecoin supply, making critical decisions, and ensuring that the stablecoin’s price remains pegged to a specific value.

Suppose a smart contract is not secure. In that case, it can lead to a wide range of problems and potentially devastating consequences, including:

Loss of funds
Hacks and exploits
Asset liquidations
Price manipulation
Privacy breaches
Loss of trust

To create an algorithmic stablecoin, thorough security audits, code reviews, and rigorous testing are essential during the development of smart contracts. We strongly recommend achieving 100% unit test coverage for all your smart contracts. Our reputation proves our desire to build only secure real-world asset tokenization solutions, DeFi apps, smart contracts, and stablecoins.

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Blockchain platform integration and launching

Integrating tokens with a blockchain platform is the last step in algorithmic stablecoin development. Here, developers align the stability mechanisms encoded in the smart contracts with the blockchain’s infrastructure. This integration ensures the stablecoin’s price stability. It also ensures that functionality can be reliably maintained within the decentralized ecosystem.

Best Blockchain Platforms for Stablecoin Development

In 2024, there are many different blockchains you can use to create an algorithmic stablecoin. You can choose from:

Ethereum
Binance Smart Chain
Solana
Avalanche
Polkadot

In our experience, the most popular blockchains for creating algorithmic stablecoins are Ethereum, BNB Chain, and TRON. Each network has unique advantages and limitations. Conducting a thorough assessment based on your specific requirements and objectives is imperative.

Real-world Examples

Here, we want to discuss 2 notable algorithmic stablecoins in the market. These examples will help you develop an algorithmic stablecoin to surpass the competition.

Synthetix USD

algorithmic stablecoin development — *Image Source*

Synthetix USD is one of the most prominent algorithmic stablecoins in cryptocurrency. Constructed on the Ethereum blockchain, SUSD is the brainchild of the Synthetix team. By the way, it is a leading player in decentralized synthetic asset issuance.

SUSD taps into the Ethereum blockchain’s capabilities to ensure the steadfastness of its value. The platform employs a distinctive mechanism to uphold the SUSD’s peg to the US dollar. It involves collateralized debt positions (CDPs) and its native SNX token.

Demand for stablecoins in the cryptocurrency space continues to grow. This is why SUSD has emerged as a sought-after and adaptable stablecoin choice for users immersed in the DeFi ecosystem.

FRAX

developing your own algorithmic stablecoin — *Image Source*

FRAX is an algorithmic stablecoin developed in 2020 by Sam Kazemian and Travis Moore. FRAX has drawn considerable attention due to its unique approach to maintaining price stability. It operates on the Ethereum blockchain. It harnesses the power of smart contracts and sophisticated algorithms to regulate its supply according to market demand. This way, it ensures its price stability.

The key to FRAX’s success lies in its ability to steadfastly peg itself to the US dollar. It grants users a dependable and steady store of value within the turbulent crypto market.

Summary

Achieving the goal of a truly stable digital currency is not without its challenges. Success requires a combination of technical prowess, economic insight, and regulatory compliance.

For those seeking expert guidance in how to develop an algorithmic stablecoin, IdeaSoft offers comprehensive consultation services. Fill in the form below and we will be in touch within 2 business days!

Crypto Wallet App Development: A 2025 Guide

Want to develop a crypto wallet app? By 2030, the Global Cryptocurrency Payment Apps market is projected to reach over $2.108 million, growing at a CAGR of 18.52% over the next eight years (Research and Markets).

A staggering 290% increase compared to previous years is mainly driven by the widespread adoption of cryptocurrencies, market strengthening due to recent ETF approval, and wider adoption of cost-saving payments provided by layer-2 solutions. Realizing the future perspectives of cryptocurrency and its lucrative opportunities for business development, many companies already started investing in digital crypto projects.

For example, we have built Dollet Wallet – a non-custodial crypto wallet that features seamless asset management and multi-chain compatibility. Thanks to this project, we know all the ins and outs of blockchain wallet development and can discuss them with you.

In this guide, IdeaSoft developers will introduce the basics of how to create a crypto wallet app for your business. You’ll discover the core essentials of crypto wallet app development, the basic features, and the step-by-step strategy that will help you build a scalable and functional crypto application.

IdeaSoft has the expertise and a full-cycle product team on board!

Looking for an experienced team of crypto wallet developers? Let our experts share key insights on developing a custom digital solution and explain the common development challenges to help you successfully plan your crypto wallet project.

Table of content:

Why to Develop a Crypto Wallet Application?
What Are the Types of Crypto Wallets?
Essential Features in Crypto Wallet Apps
8 Fundamental Aspects for Developing a Cryptocurrency Wallet App
Our Experience in Crypto Wallet Development
Key Challenges in Cryptocurrency Wallet Development
Summary

Why to Develop a Crypto Wallet Application?

We distinguish 4 reasons why it makes sense to start crypto wallet app development:

Riding the wave of market growth. Startups develop a crypto wallet app to enter a growing market. This not only opens avenues for substantial revenue through transaction fees and premium features but also offers opportunities for innovation and brand establishment in the competitive fintech space
Promoting financial inclusion. Cryptocurrencies offer a unique solution to the challenges faced by unbanked and underbanked populations. By developing a crypto wallet application, developers contribute to financial inclusion, providing access to financial services for those who lack traditional banking facilities. Crypto wallets facilitate global transactions without the barriers imposed by traditional banking systems, thus fostering economic participation across diverse demographics.
Contributing to economic growth. Developing a crypto wallet application not only benefits individual users and businesses but also contributes to the overall growth of the cryptocurrency ecosystem. By fostering innovation and encouraging new technological developments, developers play a crucial role in advancing the blockchain space and supporting the global economy’s digital transformation.
Seizing market differentiation. By offering unique selling points such as advanced security measures, user-friendly interfaces, and additional services like DeFi integration, developers can set their crypto wallet applications apart from the competition. Strategic partnerships with other fintech and blockchain companies can also enhance the application’s value proposition, attracting a broader user base.

Overall, startups, end users (cryptocurrency holders), businesses, merchants, investors, and traders benefit from crypto wallet app development.

What Are the Types of Crypto Wallets?

The functionality and technologies required for the crypto app development will mainly depend on the type of wallet you choose. So, the first stage in understanding how to develop a crypto wallet is to identify what type of wallet can better match the app’s features, project requirements and needs. This table highlights the main differences between cold wallets and hot wallets.

crypto wallet app development — *The difference between hot and cold wallet type*

And here is a comparison table with the different wallet features we recommend you investigate before you decide to develop Bitcoin wallet application.

Feature	Cold Wallets (Hardware Wallets)	Hot Wallets	Hybrid Wallets
Definition	Physical devices designed to store cryptocurrency offline.	Software-based wallets connected to the internet.	Combine elements of both cold and hot wallets.
Security	High – private keys isolated from the Internet, resistant to online hacks.	Lower – requires an ongoing Internet connection, more vulnerable to online attacks.	Enhanced – majority of funds stored offline, small portions kept online.
Accessibility	Limited – requires physical access to the device.	High – seamless access for active trading/transactions.	Balanced – offline storage for security, online for accessibility.
Usage	Best for long-term storage of large amounts of cryptocurrency.	Ideal for active trading and frequent transactions.	Suitable for users needing both security and convenience.

The wallet type, however, is not the only aspect you need to develop a secure blockchain wallet application. Identifying the features and technologies of your future application will help you to create a cost-efficient and competitive solution for crypto payments. So, let’s review the most important features that can maximize the performance of your cryptocurrency platform.

Crypto Wallet Apps Features to Develop

Planning the app’s functionality is another essential aspect of such projects, as it allows you to understand the use cases and identify the benefits of your app compared to the existing market alternatives.

Below, we’ve outlined the most fundamental features in crypto applications, which you can apply to create a custom digital wallet app or even build your own crypto casino!

#1. User Authentication

An essential feature that enables wallet access only to authorized individuals. As a rule, user authentication is exceptionally important for meeting various crypto compliance standards such as AML, KYC, and others. Typically, it is implemented through secured login credentials, biometric authentication, or multi-factor authentication (MFA), which prevents third-party access to the crypto wallets.

#2. Support for Multiple Cryptocurrencies

Today, multi-currency apps have a strong competitive advantage compared to single-currency alternatives, like Bitcoin or Ethereum wallets. Integrations with various currencies can significantly improve the usability of your digital wallet app, making it more versatile and functional. Additionally, multi-currency crypto wallets allow asset holders to diversify their portfolios, which is important from both the business and the customers’ standpoints.

#3. Secure Blockchain-Based Transactions

Once you’ve decided to develop a crypto application, make sure to prioritize the security of your on-chain transactions and other cost-related operations. The transaction safety measures include but aren’t limited to encrypting sensitive data, verification of user accounts and signatures, and integrations of blockchain security protocol, etc.

#4. Integration with Payment Gateways

This feature enables users to perform the payments directly from their crypto wallets, through the integrated external payment processors or gateways for cryptocurrencies. Crypto-based technologies work similarly to the standard payment processor gateways and acquire bank credit cards and are commonly applied to make transactions more simple without compromising their security.

#5. Efficient Address Management

Powerful address management functionality allows crypto users to ease wallet address tracking and facilitate their identification. However, along with the technical aspects, developers also need to ensure the system provides a convenient design and user-friendly experience for managing crypto addresses.

#6. Integrations with the Paper Wallets

Importing paper wallets allows crypto holders to transfer funds between a physical paper wallet and the digital crypto wallet app. Yet, similarly to the crypto exchange security features, paper wallet integration should be handled carefully due to its high relevance to sensitive user information and financial data.

#7. QR Code Scanning

This function is mainly used to simplify the process of sending and receiving cryptocurrencies. Users can scan QR codes to input wallet addresses, conduct transactions, or log in to their crypto wallets through any mobile or desktop device. The QR code scanning integration is relatively straightforward and features plenty of established libraries and APIs available for developers.

#8. Automated Session Logout

This functionality can provide the add-on security layer for your digital wallet app, ensuring they’re safe and can be accessed only by authorized parties with specific permissions. Once the session is ended, the system will automatically log you out, confirming the safety of the in-app processes and crypto manipulations.

Got lost in tech details?

8 Steps for Developing a Cryptocurrency Wallet App

Now we would like to describe the basic steps for creating a crypto wallet app and give best practices for each step based on your experience.

1. Review the Latest Blockchain and Cryptocurrency Concepts

Keep track of the latest trends and technology updates in the blockchain and crypto landscape. This knowledge will provide a solid foundation during the actual development process. Revise the current Layer-2 solutions as far as they offer higher transaction speed with a relatively low gas fee.

At the current market state, we recommend turning your attention to Solana due to its ecosystem prominent growth and Polygon, due to the fastest implementation of the ERC-4337 token standard. This new level of technology allows for building a programmable wallets with smoother transaction flow and higher level of security at the same time.
Herman Stogniiev, Co-founder and CTO at IdeaSoft

Understanding the fundamentals of blockchain architecture, different consensus mechanisms, and the specific features of cryptocurrencies will help you maximize the performance of your project, ensuring its competitiveness in the long run.

2. Utilize Established Open-source Cryptocurrency Libraries

Leverage well-maintained, open-source cryptocurrency libraries like BitcoinJ for Bitcoin or Web3.js for Ethereum. These libraries have been extensively tested for blockchain-based product development and can significantly enhance the development workflow while ensuring reliable functionality and keeping your products secured.

3. Leverage APIs for Seamless Integration

Utilize reputable APIs provided by blockchain networks, which can provide high-level reliability and development support. These APIs offer standardized methods to interact with the blockchain, making the integration process smoother and more efficient.

4. Harness Cloud Technology for Scalability

By utilizing cloud platforms like AWS, Google Cloud, or Azure build a scalable crypto web app that always provides top-level user experiences. Additionally, leveraging the cloud solutions in crypto wallet applications enables businesses to effectively allocate computation resources based on user demand, providing a seamless performance even during peak usage.

5. Choose an Appropriate Technology Stack & Development Expertise

Select a technology stack and blockchain expertise that aligns with your project’s requirements and business goals. For instance, consider using languages like JavaScript (for web-based wallets) or Java/Kotlin (for mobile apps on Android or iOS). By choosing the databases, frameworks, and libraries that work best on the target operational system and device, you can provide the smooth and efficient performance of your crypto wallet app.

6. Strengthen Security Measures

As we mentioned earlier, security is the paramount component in cryptocurrency wallet development. Implementing industry-standard security practices like data encryption, secure key management, and secure coding practices can make your product more resistant to hacking attacks, leakages, and other threats. Additionally, secure and reliable systems will help your crypto wallet app gain recognition among larger audiences.

7. Analyze Market Competitors

Conduct thorough market research to understand the strengths and weaknesses of the existing crypto wallets. Identify the key areas where your product can stand out among the competitors with unique features or improvements. Use the results of your research to make data-driven decisions and build a powerful digital wallet for cryptocurrency.

8. Implement & Refine Your Application

After the app release, pay attention to the user feedback and adjust the functionality of your crypto wallet to meet the client’s needs. Continuous refinement and updates based on user input, as well as catching up with the latest industry innovations, will help you to ensure the product’s success from a long-term perspective.

Our Experience in Crypto Wallet Development

At IdeaSoft, our blockchain team features vast expertise in building digital wallet solutions for crypto. For each of the projects, we create a custom development strategy that is fully tailored to your project requirements and business goals.

For example, for one of our recent projects – Dollet Wallet – our experts have built a non-custodial crypto wallet that features seamless asset management and multi-chain compatibility. Along with a functional admin panel, the app streamlines processes for crypto storage, DeFi farming pool investments, and bridge-enabled asset transfer. Finally, this cryptocurrency wallet supports third-party service integration to enable the seamless in-app exchanges of crypto assets.

*Dollet Wallet wireframes featuring a basic wallet functionality*

To maximize the project’s efficiency, our experts have created a data-driven development strategy based on the current market trends and target audience studies, yet included the core business goals and project requirements discussed with our client.

Key Challenges in Cryptocurrency Wallet Development

According to Rostyslav Bortman, the Head of Blockchain at IdeaSoft, the main challenge in crypto wallet development is the security of private key management on a device.

Crypto wallets utilize the device memory for private key storage, so developers must analyze the architecture and technical specifications of the hardware when building cryptocurrency wallet apps.

Along with the private key management, other important aspects in creating digital wallet apps include the app’s UI/UX design, its scalability, and blockchain development expertise.

UI/UX Design. In the challenging landscape of Web 3.0 development, ensuring an outstanding user experience and seamless functionality can give you a serious advantage over the competitors. With an expert UI/UX team, you can create a user-friendly interface that ensures a seamless engagement with the key wallet services and functionality.
App Scalability. As the user base and transaction volumes grow, you may need to scale your project to optimize its performance for larger traffic flow. So, once you decide to build a cryptocurrency wallet, make sure to consider its future development and growth strategy as well. Considering the scalability of your digital crypto wallet will help to optimize your application, extend its functionality, and integrate the newest technologies, which benefit both the client experience and the business as a whole.
Blockchain Development Team. The development expertise is an essential component of your project’s success. For this reason, it’s important to hire specialists who are relevant to your project requirements and business goals. Additionally, it’s recommended to check the developers’ experience and discuss your expectations to ensure a productive and efficient collaboration.
Regulatory and Legal Challenges. Adhering to evolving regulatory frameworks and legal requirements is crucial for your crypto wallet app development. Compliance with anti-money laundering (AML) and know-your-customer (KYC) regulations can be particularly challenging, as these requirements vary across jurisdictions and are subject to change.
App Security and Safeguarding Measures. The cryptocurrency space is a prime target for hackers, and wallet developers must continuously adapt to evolving security threats. Our team always recommends implementing advanced encryption, and multi-signature authentication, and conducting regular security audits after each smart contract or even wallet software update.

When developing a cryptocurrency wallet, it’s also recommended to consider the right wallet type, including multi-currency support and specific in-app functionalities, which can enhance the app’s usability and facilitate user experience.

How much does it cost to develop a crypto wallet app?

The cost of cryptocurrency wallet application development is influenced by the desired feature set, complexity, chosen platform, and the location of the development team. For a basic wallet with features like storing a few cryptocurrencies and basic send/receive functionality, the estimated cost range is between $30,000 and $40,000. This is suitable for individuals or startups looking for a simple solution.

We always recommend our clients to start with a discovery phase, where we properly draw up requirements for the project and make proper estimates.

For a more moderate wallet that includes additional features like supporting a variety of cryptocurrencies and basic trading capabilities, the estimated cost increases to $50,000 – $80,000. For those seeking an advanced cryptocurrency wallet with features such as staking, DeFi integration, and an in-app exchange, the estimated cost may rise to $100,000 – $200,000.

Want to develop a crypto wallet application?

We can calculate the cost of wallet development based on your wishes. Just contact us!

This complexity level often demands the expertise of a full-cycle development team, such as IdeaSoft, which is capable of handling intricate functionalities and both iOS and Android platforms. The investment reflects the comprehensive nature of the features and the need for a more extensive and blockchain-specialized development team.

Summary

Choosing the right functionality, efficient strategy, and relevant expertise is essential for building a successful crypto wallet application. And, having uncovered the essentials of how to create a cryptocurrency wallet for your business, it’s the best time to get started on your project development with the professional blockchain team.

IdeaSoft is one of the leading blockchain companies with proven expertise in crypto app solutions development. Our team of dedicated blockchain developers, creative designers, professional project managers, and experienced business administrators will guide you through each stage of the project delivery, helping you to build the most efficient and effective solution for your company.

Incorporating restaking features can further enhance your wallet app by providing additional rewards and incentives for users. Contact us today to discuss how to create a crypto wallet app that empowers your business development and growth!

Smart Contract Testing & Debugging: Best Practices for Web 3.0 Builders

The security and reliability of any software product highly depend on the quality of its source code. When it comes to blockchain-based products, checking every single possible variable is essential, with a particular emphasis given to smart contract testing.

Once the smart contract is deployed, changes are difficult, and transactions are permanent. If some issues are overlooked, it can result in notable reputational and financial losses for a business. That said, the IdeaSoft team has prepared a simple overview of smart contract debugging that explains how to test smart contracts, which tools to choose, and what aspects to check when building your perfect blockchain solution.

Let’s dive in!

Looking for an experienced blockchain team?

At IdeaSoft, we have deep expertise in creating robust and functional smart contract solutions for a wide range of projects.

Reach out to our team, and we will consult the best solution for your business, taking into account your product requirements and budget.

Table of content:

How Do You Debug a Smart Contract?
Best Practices for Smart Contract Testing and Debugging?
What Are The Best Debugging Tools to Use with a Smart Contract?
Essential Smart Contract Debugging Tips from IdeaSoft
Our Experience
Summary

How Do You Debug a Smart Contract

The standard process of smart contract debugging involves a series of steps aimed at ensuring the reliability, functionality, and security of the code. To help you understand its core principles, here’s a simple overview of how smart contracts are tested at IdeaSoft before they’re deployed in the blockchain:

Review the Requirements (optional): Our testing team double-checks the business requirements and technical specifications of the smart contract, defining its expected functionality, input parameters, and desired outcomes.
Unit Testing: We test specific functions and methods within the smart contract in an isolated environment, ensuring they work as intended and return the expected results.
Integration Testing: Our specialists check interactions between different functions within the contract and with external contracts or dependencies. Ensure that data flows correctly and that interactions meet requirements.
Functional Testing: Through a full range of testing scenarios, we verify that the smart contract meets its functional requirements to ideally match your business needs.
Security Testing: Our developers identify and address potential vulnerabilities of the smart contract code by using techniques like static/dynamic analysis tools, code review, and commonly occurring issues.
Documentation: Our team creates comprehensive documentation explaining the contract’s functionality, usage, and potential edge cases that will help to manage and optimize your smart contracts in the future.
Final Verification: Once all issues are resolved and tests pass successfully, our specialists confirm the smart contract is ready for deployment to your blockchain project.

Now that you’ve learned the basics of how smart contract debugging is performed and what areas it covers. In the next paragraphs, we’ll discuss the best practices for smart contract testing and tools that will help you come up with an ideal tech solution for your blockchain application.

Best Practices for Smart Contract Testing and Debugging

There are different approaches and recommendations on how you can debug a smart contract. For this reason, the IdeaSoft team highlighted the most essential hacks that can enhance your smart contract checkup.

#1 Use Automated Testing Tools

One of the most effective approaches in smart contract testing is to choose robust and user-friendly audit tools. The automated testing tools enable more efficient code checkups, helping to identify various errors, logic flaws, and unexpected behaviors in the early development stages. Leveraging QA automation using AI further enhances these processes by providing intelligent analysis and detecting patterns that might be missed by traditional methods. Additionally, this allows to save a lot of time, cost and human resources without sacrificing their quality.

According to Rostyslav Bortman, the Head of Blockchain at IdeaSoft, the most effective dev environments for smart contract testing are Hardhat, Foundry, Tenderly and Truffle.

#2 Test for Security Vulnerabilities

Implementing regular updates and the latest practices in smart contract security can protect your application from potential malicious attacks and minimize its exposure to malware.

The popular tools that help to identify weaknesses and common vulnerabilities in smart contracts are MythX, OpenZepplin, Goerli Testnet, and more.

#3 Deploy Contracts on Multiple Networks

Testing contracts on various networks, such as testnets and private networks, allows developers to assess contract behavior under different scenarios. This practice is especially useful during performance testing, as it helps to capture more specific issues that might not be apparent in a single environment. At the same time, it helps to ensure your contract’s compatibility and validate its smooth performance across different blockchain networks.

#4 Document Your Tests

When learning how to debug smart contracts, documenting test cases, expected outcomes, and edge cases shouldn’t be overlooked as well. It aids in maintaining, understanding, and sharing your smart contract tests. Also, such an approach can improve the team’s collaboration and greatly help with future debugging and updates.

Remember, well-documented checkups provide you with greater optimization ideas and insights, thus contributing to the longevity and reliability of your smart contracts.

What Are The Best Debugging Tools to Use with a Smart Contract?

Once we’ve uncovered the best practices for smart contract debugging, the next important aspect to discuss is choosing the tech stack for your code checkup. As of today, the most popular testing tools for smart contracts include:

Truffle – an automated testing framework that covers multiple approaches (JavaScript/TypeScript or Solidity testing) to exercise different testing scenarios. Its in-built consoles (Truffle Console and Truffle Develop) are applied not only for interactive debugging purposes but also allow easy testing and executing transactions within a single environment.
Mythril – a security analysis tool for EVM bytecode that is commonly applied for Ethereum, Hedera, Quorum, Vechain, Roostock, Tron, and other EVM-compatible blockchains.
Waffle – an advanced framework for smart contract testing that uses minimal dependencies, features an easy-to-learn syntax, and provides fast execution times for compiling and testing smart contracts.
Hardhat – a powerful development environment for smart contracts on Ethereum that offers a comprehensive toolset for building, testing, and deploying contracts.
Tenderly – a feature-rich development tool that allows you to build, test, monitor, and operate smart contracts from their inception to mass adoption. This tool supports over 30 different networks and is extremely helpful in strengthening the security of every Web 3.0 project.
Immunefi – a functional bounty platform for smart contract and DeFi solutions that helps testers review code, address vulnerabilities, and improve the overall safety of crypto projects.

Depending on the project’s complexity, functionality, and architecture specifications, all the smart contracts are tested in different ways. To maximize the reliability and security of your blockchain solution, it’s important to choose the most relevant technologies with your business goals and project requirements in mind.

By outsourcing smart contract development to IdeaSoft, you’ll access the advanced debugging tools and the professional blockchain development expertise that fully matches your project. For each of our products, we identify the most relevant tools and effective testing approaches to ensure it’s robust, safe, and bug-free.

Essential Smart Contract Debugging Tips from IdeaSoft

Smart contract debugging is a complex process that has different nuances, considerations, and development challenges. To help you successfully get these covered, our Head of the Blockchain Department – Rostyslav Bortman, has prepared the key recommendations aimed at facilitating and improving the process of contract testing.

Make sure to achieve the unit test coverage near 100%;
While conducting the checkups, it’s crucial to cover all cases for the function (both positive and negative);
Use console.log where it’s supported. In particular, this can be performed through the Hardhat and Foundry debugging tools;
Use forks of the networks instead of real networks. For example, you can try forking Goerli Testnet with Hardhat and running tests on the fork. This allows to speed up the testing process and reduces the need to search for the ETH;
Use forks (for example, Hardhat fork) for simulation testing, as it allows you to impersonate any account (since you can use any address without a private key) and also aids in performing time manipulation tricks – which can be exceptionally important in some cases;
For rigorous debugging, we recommend using Tenderly, which is so far one of the most efficient tools used for smart contracts;
If the protocol you need for the tests doesn’t support forking (the EVM networks like zkSync or similar ones), you can use mock contracts to simulate the behavior of external contracts, components, or systems;
Ensure that your test cases include boundary tests. For example, if there’s a function that works with numbers, test it with maximum and minimum possible values;
Look for opportunities to optimize the gas fees. In particular, this can be achieved through reducing the number of used variables, storage cleaning, replacing dynamic arrays on fixed-size options, avoiding triple-nesting cycles and double-nesting cycles (if possible), and so on.

These simple smart contract testing tips can help not only enhance the contract checkup but also ensure smooth operation and efficient performance upon its deployment in the blockchain.

If you lack some expertise in how to debug smart contracts properly, don’t hesitate to ask for professional assistance. The tech-savvy engineers from a reputable development company such as IdeaSoft can help you to test, debug, and deploy the best smart contract solutions to the project you need.

Our Experience

With years of expertise working in blockchain development, our dedicated specialists have a deep understanding of smart contract architecture, its testing, and debugging. Currently, we don’t offer smart contract audit as a service, but each of our smart contracts is rigorously tested by our professional blockchain team, ensuring it’s always efficient, secure, and bug-free.

In particular, we have successfully implemented smart contract solutions for the LiveCGI streaming platform, N-Finity NFT marketplace, BridgeTower marketplace and other projects, which can be found in our portfolio. Our team creates a powerful development strategy and conducts rigorous performance checkups to ensure the product operation is smooth, efficient, and completely secure.

Summary

When developing any smart contract solution, conducting a thorough code checkup is essential. Smart contract debugging is a complex process that involves plenty of tools, frameworks, and techniques aimed to effectively address any code vulnerabilities and issues. As a result, it helps to greatly enhance the security and reliability of the final blockchain-based product.

At IdeaSoft, we have deep expertise in creating robust and functional smart contract solutions for a wide range of projects. With over 250 successful cases in IT development, our mission is to build secure products that provide the maximum value and will never be hacked.

If you need professional guidance on smart contract debugging or need some more information about the other development services – contact us right away! Our experienced specialists are always ready to build a custom testing strategy with your business goals and needs in the first place! Furthermore, we specialize in DePIN platform development, ensuring your project utilizes decentralized physical infrastructure networks for enhanced performance and resilience.

DeFi Exchange Platform Development Process

Today, it’s not enough to develop decentralized exchange platforms. Instead, you need to address all the current user needs and their potential challenges with the most effective DeFi solution. We at IdeaSoft know that better than anyone. Such an approach helped us to develop Orderly.Ne t work – an infrastructural layer for DEXes within the NEAR blockchain ecosystem.

In this guide, IdeaSoft’s top DeFi experts explain the essentials of a DeFi platform development, covering its must-have features, benefits, and challenges that might occur before and during the product delivery. Additionally, you’ll learn a step-by-step strategy for building a powerful DeFi exchange that will effectively address your business objectives and client needs.

Table of content:

Developing a DeFi Exchange Platform. What to Consider
How to Create a DeFi Exchange Platform: 5 Essential Steps
Estimating the Development Cost of a DeFi Exchange
What Are the Key Business Challenges in DeFi Exchange Development?
IdeaSoft Experience in DeFi Development
Summary

Want to develop a solid crypto exchange?Don’t know where to start?

Go through our article and find out about essencial development steps, advantages of different exchange types and main features your product need to have to stay competitive. Or schedule a call with us and let us help you figure it out, and correctly draw up the requirements for your project!

Developing a DeFi Exchange Platform. What to Consider

As you already know, Decentralized Finance exchanges are platforms that facilitate the exchange of cryptocurrencies and other digital assets in a decentralized manner. Unlike traditional centralized exchanges, which rely on intermediaries to match and execute trades, DeFi exchanges operate on blockchain technology and smart contracts, enabling automated trading and financial activities without the need for a central authority.

Currently, there are two major types of decentralized exchange ecosystems:

Automated Market Maker (AMM) model – a widely trending and extremely flexible DEX solution, which helps to facilitate the trading experience and has gained huge recognition across the top-rating exchanges (for instance, Uniswap v3, Curve, Balancer, etc)
Central Limit Order Book (CLOB) model – a traditional trade execution model that matches orders from buyers and sellers based on a set of rules, which has a reliable mechanism and a specified price (for example, it’s still used by the platforms like SwapEx, Polkadex, etc)

If you’ve reviewed the top players on the market, such as Uniswap, dYdX, PancakeSwap, DODO, Balancer, Maverick, you probably noticed that, along with the traditional swaps, these are constantly adding the newer strategies for yield generation and income increases.

Daily, the top 5 DeFi exchanges generate over $1.22 billion of trading volume, according to CointMarketCap. With a thoroughly planned strategy and advanced development solutions involved, your DeFi product has all the chances to get on the top of this rank. So let’s review how we can make this happen.

Key Features of a Successful Launching DeFi Exchange Platform

Before we get started learning how to develop a DeFi crypto exchange platform, it’s important to first analyze what features it should cover. IdeaSoft’s experts have shared some thoughts on the DeFi exchange functionality that will help you to create a successful product for token trading.

Swap

In the context of DeFi exchange development, swap is a fundamental feature that enables an exchange of one cryptocurrency for another directly within a decentralized platform. This mechanism provides a simple and smooth trading experience using smart contract-based exchange protocols, without the need to commence the traditional crypto-to-fiat exchange or token migration. So, users can swap tokens directly from the official private key wallet or trading account.

AMM Mechanism

Automated Market Maker (AMM) is a mathematical algorithm of becking the token prices, which lies at the core of many DEX solutions. Unlike the traditional exchangers, the DeFi crypto exchange platforms are based on liquidity pools and liquidity providers, while token prices are assessed by the algorithm and depend on the market dynamics.

In DEX, AMM protocols use liquidity pools to provide traders with the required token amounts. They use mathematical formulas to determine the price of assets within the liquidity pool, so tokens in these pools must have an equivalent total value. Then, the pool’s smart contract automatically calculates token prices based on the ratio of assets in the pool, allowing for automated and fast trading.

Other Useful Functionality for DeFi

Along with the core features, it’s also critical to implement the add-on functionality for the DeFi product. This way, you can provide a seamless, efficient user experience that increases engagement rates and boosts the competitiveness of your decentralized exchange platform.

IdeaSoft’s developers recommend the following upgrades for DeFi exchange platform:

User Dashboard – functional yet easy-to-navigate environments that display the most relevant information to your users. Typically, it covers account balances, transaction history, portfolio performance, rewards, and farming/staking activities (if applicable).
Advanced Data Analytics – data visualization tools that allow users to track their portfolio performance, transaction history, earned yield, and other key metrics.
In-built Wallet – an essential component that enables securing storage, sending, receiving users’ crypto and checking the current balance.
Yield Farming Strategies – advanced functionality that allow users to increase their incomes for the tokens they own or have received as a result of trading.
Referral Programs & Bonus Programs – lucrative offers that allow providers to increase client loyalty and audience engagement through more attractive trading conditions.
Educational resources – content, tooltips, and guides that are aimed to help users understand the various DeFi functions and concepts, as well as get comprehensive assistance on your app.

Packing your DeFi product with these elements allows you to provide exclusive services and outstanding experiences for larger audiences.

DeFi crypto exchange platform that is efficient, competitive, and fully aligns with your business goals and needs? Keep on reading to find that out!

How to Create a DeFi Exchange Platform: 5 Essential Steps

In our recent post, we’ve discussed the essentials of a custom DEX development process, and here our best specialists from IdeaSoft explaining the basics of an efficient DeFi exchange development.

The full-cycle development of such projects consists of 5 core stages: planning, prototyping, development, quality assurance, and deployment. Now, let’s review what processes are covered by each of them.

1. Research, Planning & Conceptualization

Detailed planning of your future product lies at the core of any project, and the creating DeFi exchange platform is not an exception. In-depth research helps to get a clear picture of the architecture, features and design of your decentralized exchange. As a rule, it covers the following aspects:

Industry analysis and market studies;
Customer research and interviews;
Analysis of the core user problems and challenges;
Product conceptualization and validation.

These are only a few areas to be considered during the research phase, which shape the core understanding of your future DeFi solution and the further development flow. At the same time, this information uncovers plenty of data-driven insights and ideas that can help you to make your product more efficient, profitable and competitive.

2. Project Prototyping

Though this stage is usually overlooked in products with simple architecture, prototyping is exceptionally important when creating DeFi exchanges. It allows you to analyze the functionality of your decentralized solution, review the tech stack and expertise and make sure the desired product fully aligns with your business goals and user needs.

As for the DeFi exchange components, the most essential to consider are:

Token swap mechanism (automated market makers/order books)
Robust smart contracts
Efficient and intuitive UI/UX design

These basic components allow for creation of a powerful decentralized ecosystem for lending and borrowing, yield farming and staking, flash loans and many other solutions for seamless exchange and trading experiences.

Ready to discuss your project?

Let’s set up a call and create a detailed requirements for your future product!

3. The Development Phase

Once you’ve finalized the prototype of your future product, it’s time to start the actual process of DeFi platform development. To create a robust, functional and competitive DEX product, this stage needs to be covered:

Smart Contract Integration: Build the “backbone” of your DeFi platform, that will define the rules and logic for various functionalities, such as trading, staking, lending, and borrowing.
Security Audits: Conduct thorough security checkups to identify and fix potential vulnerabilities of your DEX, reducing the risk of exploits and attacks.
User Wallet Integration: Integrate the selected wallet providers (such as MetaMask, Trust Wallet, or Ledger) to allow users to connect their wallets securely and interact with your platform.
Liquidity Management: Depending on the selected token swap mechanism, developers can build a custom order book solution or AMM protocol that ensures efficient liquidity management in trading and liquidity pool operations. For instance, in our recent projects – Orderly.Network – our team has built a complex exchange solution based on decentralized order books.
Token Standards and Compatibility: Ensure the compatibility of your DeFi exchange with the popular token standards and assets based on the selected blockchain platform (for instance, if we talk about Ethereum blockchain, you will need to apply ERC-20 and ERC-721).
Additional Income Generation Tools: Develop accurate algorithms for calculating yields and getting rewards with various staking and farming opportunities. Though this feature is non-binding, it gives businesses a decent competitive advantage and provides additional reward generation (for instance, through farming strategies).
User Experience (UX) & User Interface (UI) Design: Design an intuitive and user-friendly interface that enables users to easily navigate through the platform, perform actions, and access different functionalities. A smooth and engaging user experience is crucial for user adoption.

Some other important aspects to consider when developing a DeFi crypto exchange include the system’s interoperability, risk management features, governance mechanisms, regulatory compliance and project scalability.

For instance, at IdeaSoft, our team provides a personalized approach for each client to maximize product development. By applying the top tech solutions and agile approach, we ensure the finalized DEX is efficient, secure and fully customized to your business requirements and goals.

4. Quality Assurance (QA)

Before deployment, your DeFi exchange platform should be examined by a professional QA specialist, security experts and engineers. They’ll conduct rigorous testing of all its functionalities in a controlled environment, providing the necessary debugging, fixes and updates where needed. Also, the QA team provides a compatibility checkup to ensure the smooth operation of all the components and integrations.

5. Implementation, Maintenance & Improvement

Upon the product’s deployment, our specialists create comprehensive documentation for both developers and users, explaining how to interact with your platform’s smart contracts and functionalities. This helps you effectively address user inquiries and issues, as well as provide further optimizations of your DeFi solution. Additionally, you can discuss product maintenance and upgrades to keep your product efficient in the rapidly evolving DeFi landscape.

For instance, at IdeaSoft, we always provide ongoing support for each of our projects to help our clients make the most of their decentralized exchange software.

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Estimating the Development Cost of a DeFi Exchange

The cost of decentralized exchange platform development is variable, and typically based on the following factors:

Products architecture and features
Required expertise and the size of your dev team
Tech stack involved
Delivery timeline

Getting the right DeFi expertise can not only help to improve and speed up the project delivery but also benefit from a better resource and cost allocation. At IdeaSoft, we provide a personalized approach for each of the DeFi exchange development projects, ensuring they’re functional, cost-efficient and always delivered on time.

What Are the Key Business Challenges of DeFi Exchange Platform Development?

Besides the project’s planning, development and deployment, businesses need to address many challenges to ensure their DeFi product stays successful and competitive in the ever-changing market. Based on our hands-on experience within this niche, IdeaSoft’s specialists highlight the following key challenges when creating a DeFi exchange platform.

Competitiveness: Among hundreds of DeFi cryptocurrency platforms released, your product should be the most appealing option for users. Learn the existing competitor offerings, and analyze their key features and disadvantages to get some ideas for your DeFi swap system. Additionally, we recommend studying their client reviews to gain a deeper understanding of the audience’s expectations and needs.
User-centric: A common mistake of product owners is that they typically focus solely on their business goals and ideas and often miss the actual value for the end users. Instead, you should always build the DeFi system with your end-user in mind: ensure it’s simple and intuitive, provides wide functionality and in-depth analytics to enhance user experience and maximize engagement.
Cost-efficient: Always search for opportunities to make transactions faster, cheaper and more efficient from both client and business perspectives. This will help your product stay ahead in a long-term run.
Business-oriented: The product’s success isn’t only indicated by the development, so make sure to create a robust business strategy on how to monetize your DeFi services that help your business to scale.

To stay ahead of the competition in such a huge pool of DeFi products, businesses implement new functionalities, build advanced strategies and offer lucrative bonuses to engage as many users as they can. Often, the resource-intensive and expensive DeFi development turns into replications of the popular exchange platforms with zero competitiveness and miserable ROIs from a business perspective.

IdeaSoft Experience in DeFi Development

IdeaSoft company features vast experience in DeFi exchange development. Our tech-savvy developers, professional project managers, talented UI/UX designers, and experienced business administrators can provide full guidance on how to create a decentralized cryptocurrency exchange for your business.

Among a variety of our successful DeFi solutions, we are highly proud of our recent product – Orderly.Network – an infrastructural layer for DEXes within the NEAR blockchain ecosystem.

Orderly Network is a cutting-edge trading solution for dApps that provides web 3.0 developers with decent liquidity and a CLOB infrastructure. This NEAR-based product features a solid risk engine, powerful order-matching mechanism, and shared asset pools for dApps, which effectively complement the entire on-chain infrastructure.

Our IdeaSoft team created:

NEAR-based DEX ecosystem
Deep liquidity via world-class market makers
Composable infrastructure
Middleware for DeFi protocols
Functionality that provides trading access to users with the help of Lending/Borrowing protocol available to an entire ecosystem of traders and composing projects
Shared liquidity pool accessible by a whole ecosystem of managing projects
Liquidity optimization for ecosystem’s dApps
Optimization of order matching engine that provides superior liquidity by utilizing off-chain flow

Orderly Network has generated over $240 million in total trading volume and shows plenty of business opportunities for development in the competitive DEX market.

Summary

Creating a successful exchange solution for the DeFi market is challenging but definitely worth the money and effort. With a detailed strategy, powerful architecture and the best expertise involved, you can create a competitive DeFi exchange platform that can enhance your business development and growth.

At IdeaSoft, we create innovative DeFi solutions to help companies improve their existing blockchain systems or create a decentralized exchange project from scratch. With a wide range of expertised and experienced professionals, our company will provide a custom development strategy that is fully tailored to the goals, needs, and current challenges of your business, including solutions for cross chain DeFi integration.

Best Programming Languages for Smart Contract Development

Programming languages have become an integral part of the blockchain world today. You can find those applied across various solutions within the current industry, and one such solution is smart contract development.

However, you can use different programming languages to release your smart contract project and with more and more options appearing on the dev market, it has become very difficult to pick the best one.

That is why our IdeaSoft team has prepared a simple guide to help you make the right decision for your smart contract development project! Here, we’ll review the smart contract basics and the top programming languages used for its development.

Let’s get this started!

Table of Content:

What Is a Smart Contract & Why It’s Important?
Best Programming Languages for Smart Contract Development
- Solidity
- Rust
Wrapping Up: Which Language Is Best for Smart Contracts?

What Is a Smart Contract & Why It’s Important?

Simply put, a smart contract is a computer program that automatically runs actions according to the terms of the contract without intermediaries.

For instance, with the standard purchasing procedurement, users usually entrust a third-party vendor to transfer the ownership documents after the payment has been completed. However, the smart contract approach allows automation of the action execution immediately after payment is successful.

Smart contracts are extremely important for the blockchain protocols and DeFi wallets, mainly because of the following benefits:

Improved speed and cost-efficiency
Simplified and automated action execution
Authenticity, accuracy, and credibility

Basically, these simplify business between both anonymous and identified parties with minimum to no involvement of an intermediary. Additionally, smart contracts allow for the reduction of human involvement and manual manipulation to perform the action: the contract will operate on its own according to the configured parameters of the agreement.

Best Programming Languages for Smart Contract Development

Just like any other tech solution, smart contracts are based on a particular programming language. These are used to write the contract and implement it directly on the blockchain.

Among a large number of options, Solidity and Rust languages appear to be the most popular picks for smart contract development. Let’s now take a look at their key advantages and some project examples where Rust-based and Solidity-based smart contracts are used.

Solidity

Being an object-oriented and statically typed programming language, Solidity was designed specifically for smart contract development. This language has taken a bunch of similarities from the popular C++, Python and JavaScript languages, which significantly improves the learning curve for developers.

Being initially created by the Ethereum Network team, Solidity is currently one of the most used and stable programming languages for blockchain systems. Similar to how Java works on Java Virtual Machine (JVM), Solidity can smoothly run on the Ethereum Virtual Machine (EVM).

Advantages of Solidity

General-Purpose Language. Unlike other languages that can run just a few algorithms, Solidity can be used to compute all computable functions. Simple Structure. It provides concepts similar to most modern programming languages (functions, string manipulation, classes, variables, etc), which reduces the chances of code errors.
Easy access to object-oriented attributes. Smart contracts built in Solidity feature versatile multi-level inheritance traits, where multiple contracts can be mergedinto a single contract.
Multi-variant support. This language supports the Application Binary Interface or ABI, the interface which connects two program modules (usually operating systems and user programs).
Multi-chain Compatibility. It supports layer-two blockchains, sidechains and EVM-compatible layer-one blockchains.
Established Standards. Solidity supports ERC20 and ERC 721 standards, which makes it more versatile and functional compared to other languages.
Effective Learning Curve. Solidity programming is comparatively simple to the logic of Python, JavaScript and C++ development, which benefits the development speed and high-level reliability. What is more, the language features a variety of excellent developer tools and open-source libraries.
Large & Accessible Community. Solidity was developed exclusively for smart contract development on the Ethereum Network, which has naturally stimulated strong community development.

Solidity-Based Blockchain Examples

Today, the Solidity language is extremely popular for DeFi solutions or crypto wallets development, applications and coding solutions of different types and industry relations. Some of the blockchain solutions designed using Solidity programming are Tron, CounterParty, Avalanche, Tendermint, Ethereum Classic, Hedera Hashgraph, and Zhcash.

Additionally, a plethora of leading platforms, such as Ethereum, Binance Smart Chain and Polkadot, have successfully leveraged the advantages of the Solidity programming language for their platforms.

Rust

Another great programming language that has the leading position in smart contract development is Rust. In its seventh year, this language is considered the most preferred language, with 87% of developers saying they want to continue using it, according to the Stack Overflow 2022 Developer Survey.

Rust is an object-oriented smart contract programming language, which, unlike Solidity, was designed as a general-purpose programming language and is not limited to smart contract programs.

Advantages of Rust

High-Speed and Efficient. Rust is extremely memory-efficient, which is achieved through the principle of ownership and borrowing, as well as eliminating memory-based errors during compilation time.
Parallel Processing. This feature allows for the execution of multiple smart contracts simultaneously, which improves the high throughput of the computations.
Predictable Applications. The Rust language is highly popular for writing predictable apps, which are one of the most common types of blockchain-based solutions.
Convenient and Functional Compiler. A color-coded output and extremely detailed explanation come in handy during the debugging and troubleshooting of code issues.
Deeper Developer Expertise. Compared to other language options, Rust programming features a higher learning curve that usually drives more experienced developers. This consequently lowers the impact and frequency of code errors and bugs.

Rust-Based Blockchain Examples

Today, Rust smart contract programming is widely applied within and out of the web3 ecosystem, for instance, for Solana, Polkadot or Near Blockchain projects. Additionally, you can find multiple cases of other blockchain solutions powered by Rust. Some of the most popular blockchain projects based on Rust are Amazon Web Services (AWS), Dropbox, Mozilla, Meta (formerly Facebook), Cloudflare, Coursera, and Discord.

Wrapping Up: Which Language Is Best for Smart Contracts?

Now you’ve explored the basics of smart contract development and what programming languages are usually used for these projects. Based on our extensive expertise in the blockchain industry, Rust and Solidity languages are the best options for smart contracts that can significantly enhance a program’s performance and efficiency.

With each of them featuring unique specifications and advantages over the other, the final choice will mainly depend on your project’s specifications and the blockchain you want to work on. Ethereum-based projects are mostly built on Solidity, but if you’re looking for an efficient environment and advanced development expertise, then Rust can be the best option.

Should you need any help with your smart contract development project or a professional quote from the blockchain experts – feel free to reach out to our team! IdeaSoft experts are always here to assist in launching an efficient, profitable and competitive blockchain solution for any market!

DeFi Yield Farming Development Basics

One of the most widely used ways of investing in DeFi is yield farming services. It is useful both for users who earn rewards and for DeFi platforms that maintain their liquidity. Not surprisingly, many people are interested in DeFi yield farming platform development. This article will tell you what you need for successful yield farming development and how to prepare if you decide to set up a DeFi yield farming protocol.

What is yield farming and how does it work?

Yield Farming is a new way for cryptocurrency owners to earn passive income. If you have tokens, you can lend them on DeFi-platforms and get even more tokens back. So how do so-called “yield farmers” make money?

Any DeFi-platform where “farmers” can earn must get as many tokens as possible to ensure their quick exchange, i.e. high liquidity. To do this, cryptocurrency owners or “farmers” place their funds on the exchange and freeze them, thus forming a liquidity pool. A pool is a collection of funds locked in a smart contract. Token holders become liquidity providers, for which they receive a commission in the form of tokens. The process that is described below is yield farming.

With yield farming, liquidity providers provide a way to exchange funds that allows other users to borrow and sell. For this, they pay a commission to the exchange or platform, from which the “farmers” are remunerated. All tokens are placed on the exchange using smart contracts.

Yield farming can bring much more profit than investing in a deposit. However, there are some risks associated with the high volatility of the cryptocurrencies themselves. There is also the risk that a smart contract may contain an error that could lead to a loss of not only profits but also of all investments. That’s why when developing a DeFi product you shouldn’t forget about smart contract audits.

Yield farming is often confused with staking and liquidity mining. So let`s discuss the differences between staking and yield farming as well as liquidity mining.

What is the difference between yield farm, liquidity mining, and staking?

Staking is the process by which blockchains based on the Proof-of-Stake (PoS) algorithm work. Stakers are users who self-configure a node and join a PoS network to support the blockchain’s operation as a node validator. The main purpose of staking is not only to ensure the liquidity of the platform but also to ensure the security of the blockchain network. The more users bet, the more decentralized the blockchain is, and therefore it’s harder to attack. However, when it comes to DeFi staking, yield farming can be considered one of its varieties.

Liquidity mining is a mechanism that helps maintain balance in the market. DEX rewards users who contribute their assets to a common pool of liquidity which increases the liquidity of the exchange. In some ways, it is similar to yield farming, but with more processes going on. In most cases, liquidity mining is popular among liquidity providers who funnel their funds into different liquidity pools.

It’s clear that the lines between these types of yield farming platforms are very thin. Their goal is to earn interest by providing assets to different protocols and platforms.

DeFi yield farming platform development

There are different platforms and protocols on the market that allow users to generate passive income from their crypto assets. Moreover, they have different yield farming strategies and features. The complexity and speed of yield farming development depend on the number of features. So before getting into the details of the development process let’s first take a look at some examples of yield farming platforms.

Types of yield farming platforms

These are 3 of the best yield farming platforms: Compound, MakerDAO, and Aave. Let`s talk about them.

Compound is an algorithmic loan and lending platform. Any user with an Ethereum wallet can lend their funds to Compound’s liquidity pool and start receiving income instantly after a deposit. Rates are algorithmically calculated based on the supply/demand ratio.
MakerDAO is a decentralized lending platform that supports the issuing of DAI tokens on bail ETH, BAT, USDC, WBTC. DAI is a stablecoin whose exchange rate is pegged 1:1 to the U.S. dollar. Yield farmers often use issued DAI to implement their investing strategies.
Aave is a decentralized loan and credit protocol that is very actively used by yield farmers. The lending party (liquidity providers) receives aToken’s in return for their funds. These tokens immediately start generating income when issued.

Decentralized finance, and in particular yield farming protocols, are a breakthrough in finance, cryptocurrency economics, and computer science technology. So how is a DeFi yield farming platform developed?

The process of DeFi yield farming platform development

The DeFi yield farming development is similar to creating any other DeFi product. The yield farming development process consists of 5 stages: discovery, design, development, testing, and the launching phases. Now let`s discuss them in more detail.

The discovery phase helps define the goals and objectives of the project, makes a list of features and selects a technology stack for its implementation. Business analysts work with the client in this phase to help build a bridge between the business part of the project and the technical solution. We advise you not skip this stage, as it allows you to reduce the risks of the project, optimize the budget, and speed up the time to market.
The design phase is no less important than any other phase. One of the main drawbacks of DeFi products often is a poorly designed user interface. It is better to enlist the support of experienced designers who can help you not only to create an attractive interface, but also to find the best ways to present the benefits of your platform.
The development phase starts after you have an idea of exactly how your platform should work, what mechanisms of rewarding users should be used, and what features should be implemented. The foundation of any DeFi product is self-executing smart contracts. Creating such contracts requires deep blockchain expertise because they must work as intended and also be devoid of vulnerabilities. DeFi protocols are one of the favorite targets for hacker attacks, so you should take the security of your smart contracts seriously.
Testing and launching are inseparable processes. Before launch, it is mandatory to check your product for bugs. DeFi testing should include not only functionality and usability testing but also security testing. One of the best practices is to audit smart contracts before releasing the protocol to the market. Smart contract auditing is a process that scrutinizes a piece of code to identify bugs, vulnerabilities, and risks. It is often conducted before the code is deployed and used on the main network because then it is no longer subject to change.

This is how the DeFi yield farming development process works. If you are looking for a DeFi yield farming development company, you are in the right place. Our experienced development team can help you develop an innovative DeFi project.

IdeaSoft expertise

The DeFi sector has been getting more and more attention lately. After Compound gave away COMP management tokens and some of their holders claimed annual returns of 100%, the community became obsessed with DeFi yield farming. That’s why it’s better than ever to think about your yield farming development.
As a DeFi yield farming development company IdeaSoft has been providing blockchain development services for more than 5 years. The in-house development team has extensive expertise in building crypto exchanges, crypto wallets, cross chain DeFi platform, DeFi aggregators, lending/borrowing protocols, staking and yield farming platforms, and more. IdeaSoft has repeatedly been named among the TOP blockchain development companies according to Techreviewer, Upvotes, DesignRush and Clutch. Feel free to contact us to discuss your next project.

DeFi Staking Platform Development Process

Decentralized finance has opened up a host of new opportunities for members of the crypto community, including the chance to earn passive income through DeFi staking.

If you’ve also decided to take advantage of this model and are thinking about DeFi staking platform development, you’re on the right IdeaSoft blog page. In this article we will explain how DeFi staking works and more about the process of developing decentralized platforms that support this feature and what that looks like.

What is DeFi staking?

Many users of centralized staking platforms have taken the opportunity to learn what DeFi staking is and how it works, and for good reason. DeFi staking is an additional way to generate income from your crypto assets by leveraging the benefits of decentralized finance.

Many developers are now aiming to develop cross-chain DeFi staking solutions, enhancing interoperability and expanding opportunities for users.

The concept of staking in a centralized and decentralized environment can be different. Before DeFi came along, staking was understood as the process of confirming transactions and generating new blocks on the blockchain and getting rewarded for doing so. DeFi staking usually works another way. You deposit your crypto assets to a DeFi protocol and receive a share of the commission from the operations performed on the platform as a reward. Thus, the DeFi protocol maintains its liquidity, and liquidity providers receive interest. You may have heard of liquidity mining or yield farming, which are basically a form of DeFi staking.

DeFi staking provides all the benefits of decentralization, such as greater transparency, fewer intermediaries, lower transaction costs, and more. Also, this method of passive earning is considered safer than traditional investments since the DeFi system is managed by self-executing smart contracts and empowered with blockchain. Additionally, utilizing a cross chain DeFi platform can enhance your staking opportunities by allowing you to leverage assets and liquidity across multiple blockchain networks.

Types of DeFi staking platforms

Since the concept of DeFi staking is fairly new, staking mechanisms differ from platform to platform. As of today, we can identify three main types of DeFi staking platforms.

Stablecoin-based DeFi Staking platforms

Such platforms have their own stablecoins, which are assets more resistant to volatility than conventional cryptocurrencies. Liquidity providers or yield farmers stake these stablecoins against crypto assets and then other users can borrow them by paying a commission to the platform. Part of this commission goes to the stakers. Compound and Aave are examples of this type of platform.

Synthetic tokens staking platforms

Some platforms such as Synthetics, allow the issuance of so-called synthetic assets that are not related to the blockchain (like gold, silver, fiat money). The platform generates a token representing a real asset and makes it available to the crypto market. Users can also place these assets in liquidity pools and receive interest.

DeFi staking aggregators

These are in fact ordinary DeFi aggregators that provide information about several liquidity pools and protocols in a single interface. They help users more intelligently allocate their assets in order to get the maximum return on investment. Zapper and Zerion are the most famous examples of DeFi aggregators.

Why invest in DeFi staking platform development

Now that we’ve discussed how DeFi staking benefits users, let’s go back to why entrepreneurs are investing in DeFi staking platform development.

So, first of all, this is a great way to attract users to your platform. The more favorable reward conditions you offer, the more likely users will contribute their assets to your platform’s liquidity pools. Hence, the more liquidity a platform provides, the more reliable it looks in the eyes of users.

Secondly, by providing staking opportunities, your platform will be able to earn more on transaction fees as there will be more transactions. That is why many lending/borrowing platforms and crypto exchanges are introducing liquidity mining and yield farming mechanisms. For businesses looking to build such platforms, crypto exchange development services can ensure a robust and secure infrastructure to support liquidity mining, yield farming, and staking functionalities.

DeFi staking platform features

The choice of features for your platform largely depends on what staking model you have chosen, what kind of opportunities you want to provide to users, and whether you plan to implement staking as a feature of a decentralized exchange or wallet or as a separate Staking-as-a-Service platform. The list below is basic. This is what you should pay attention to when choosing features for DeFi staking platform development.

User-friendly interface

Poor user experience is probably the number one problem for most DeFi platforms. Your task as a creator is to provide users with a user-friendly interface that will make it easy to navigate the site. This applies not only to the look and feel of your DeFi staking platform but also to the interface logic, information that it carries to users, and much more.

From the sign-up process to choosing assets for staking and liquidity pools, everything should be clear and should not cause complications. All relevant information should be displayed in a structured form on a dashboard. The more useful the data is that you provide to your users, the easier it will be for them to make a staking decision. For example, Aave shows a lot of chart information, including market size, total borrowing and annual interest paid on asset deposits and borrowing.

Also, one of the best ways to improve the user experience is to open up customization opportunities for users. For example, you can allow them to choose a theme for the interface or elements displayed on the dashboard.

List of supported assets and asset protection

Before embarking on DeFi staking platform development, you need to decide what assets your platform should support and what third-party protocols should integrate with.

Also, don’t forget about security. Users must be sure that the risks are minimal and they will not lose their funds due to platform vulnerabilities. The fact is that DeFi platforms are not regulated, so no one will provide refunds to users if funds are lost. Therefore, when choosing a platform for staking, security is one of the decisive factors.

First of all, you need to pay special attention to the security of wallets and smart contracts. Vulnerabilities and bugs in smart contracts are some of the most common reasons for the loss of funds on DeFi platforms. Many startups try to save money by developing software with a small team that cannot fully provide high-quality services. Building smart contracts requires deep blockchain expertise and vast experience, and since smart contracts are the protocol engine in which all the logic of work is laid, it is better to enlist the support of a skilled blockchain development team. Also, don’t forget about smart contract audits, which must be carried out by third-party developers.

Rewards calculator

The main goal of liquidity providers and investors is to make a profit, so they will probably want to know how profitable it is to use your DeFi staking platform. You need to consider the way rewards will be calculated. Some platforms have a fixed percentage, while others calculate rewards based on different market conditions.

Usually, the following factors are taken into account when calculating rewards:

The share of coins staked by the staker and the share of coins in the network.
The inflation rate.
The duration of staking.

The methods for calculating rewards differ from platform to platform. The main thing is to offer users conditions that will allow you to stand out favorably from your competitors. Also, you can embed a reward calculator into the user interface so that staking users can immediately see how much compensation they will receive.

Payouts

Payouts are another important issue that users will be interested in. Define an interest payout schedule and withdrawal procedure so that platform users have a full picture of when and how they can receive their rewards, and make sure developers have clear requirements for creating algorithms. Also, don’t forget to add a transaction history report to the interface to help users track their activity.

DeFi staking platform development process

The DeFi staking platform development process fits into the standard software creation process and consists of the following stages:

Discovery phase. This is the first step in creating any product. Here is where items are defined and clarified such as: the goals of the project, the target audience, competitors, functional and non-functional requirements, and much more. Also, the discovery phase ensures that a customer and a development team have a common vision of the project.

UX/UI design. To ensure a high-quality user interface and create a unique UX/UI design, you need the help of experienced professionals who have worked with DeFi platforms before. We have already mentioned how important platform UX is and that this is one of the main weaknesses of decentralized apps. Take the time to create simple and straightforward navigation to help users quickly and easily perform the desired actions.

Smart contracts protocol development. Smart contract creation is one of the most difficult steps in the DeFi staking platform development process. This is where all the logic behind how your platform functions is laid out. Weak architecture and bugs in smart contracts automatically reduce the reliability of any DeFi product. Make sure you are working with skilled blockchain developers who will provide a high level of coding.

DeFi integrations. DeFi protocols are relatively easy to integrate with each other, however, developers need to be sure that they are compatible and the integrations will not compromise security.

Front-End development. When the logic of the platform is created, developers begin to implement the user interface design using the frameworks that are most suitable for the project requirements.
Testing and launching. Before releasing a product on the market, QA specialists carry out all the necessary tests to make sure that the app works as intended, is free from security vulnerabilities, and meets performance requirements. It is also good practice to conduct a smart contract audit, which should be carried out by third-party developers. During the audit, specialists check the code, identify weaknesses and optimize the protocol.

Wrapping up

There is no doubt that DeFi staking is gaining popularity with the growing interest in the decentralized finance market, and we are still far from the peak. The emergence of new staking models and improved staking platforms allows this type of passive earning on crypto assets to attract more and more investors. Not surprisingly, DeFi staking platform development is booming.

The IdeaSoft team will be happy to assist you in developing your DeFi product. Our engineers have experience in creating DEXs, NFT development solutions, lending/borrowing protocols, DeFi aggregators, staking platforms, and other blockchain-based software. The company’s portfolio includes over 250 successful projects. One of the main advantages of working with IdeaSoft is that we provide a full range of software development services: from business analysis, design to programming, testing, and support.

Feel free to contact us for more information or to discuss your project. We can’t wait to hear your business ideas.

How to Develop a DeFi Wallet: IdeaSoft Guide

Despite concerns about DeFi in its early days, it seems that decentralized finance has firmly taken its place in the market. Users have started to appreciate the many benefits of DeFi such as transparency, autonomy, availability, and elimination of third parties. The main bridge between DeFi platforms and users is DeFi wallets, which provide a completely new and improved user experience for their owners. In this article, we will explain how to develop a DeFi wallet, one of the most popular types of DeFi projects.

The difference between custodial and non-custodial wallets

First of all, let’s start by defining a DeFi wallet to understand how it works and how it differs from a regular crypto wallet.

A DeFi wallet is a non-custodial wallet which means you get full control over your crypto private keys. This ensures that you are 100% responsible for managing your own funds. Unlike the centralized wallets offered by exchanges like Coinbase and Binance, which store your funds on exchange accounts, with DeFi wallets, the users are the sole owners of their assets. Also, in order to store and manage funds with a DeFi wallet, you don’t need to provide information about yourself and go through checks and verifications. Even when participating in DeFi projects, platforms will interact only with the wallet and its public address without disclosing personal data.

Take a closer look at the main features of custodial and non-custodial wallets.

Feature	Custodial wallet	Non-custodial wallet
Control over funds	Custodian or third-party	Users
Security	Less secure since keys are stored by third-party	Extremely secure since users store their private keys
Account restore	Can be restored	Can’t be restored
Withdrawal process	Slower due to KYC/AML checks	Faster
Transaction fees	Lower or even free within the same ecosystem	User pays a full transaction fee
Usability	More user-friendly	Less user friendly

As you can see, non-custodial wallets are more secure and give users more freedom to store and manage their funds. However, along with this comes additional responsibility. If the user loses the keys to their crypto wallet, the funds cannot be recovered. Also, custodial wallets are often more user-friendly than decentralized ones, so you should pay extra attention to creating a high-quality and user-friendly interface when developing a DeFi wallet.

Key features of DeFi wallets

When creating a DeFi wallet, the first thing you need to do is to draw up a list of the features you want to implement in your product. As you can guess, whether it will be popular among users directly depends on the functionality and convenience of your application. Start with the basic features your wallet should have.

Fast and easy sign-up. Remember, one of the main benefits of DeFi is privacy. Let your users quickly get started with the wallet by setting a username and choosing their security settings like a passcode or biometric security.
Balance check. This is a basic feature for any digital wallet. One of the best practices is to display balances on the start screen so that users can always see them.
Send/receive crypto. Your app should provide both convenient transfer and receipt of crypto funds. For example, Coinbase Wallet allows you to send cryptocurrency in several ways: by scanning a QR code, entering a long-form address or using a Coinbase Wallet’s username.
Money withdrawal. Withdrawals are also a must-have feature for any crypto wallet. Make sure users won’t face difficulties with withdrawals. Also, don’t forget to add a help button so that users can quickly contact you if something goes wrong.
Transaction history. Transaction history helps users analyze their activity. Make sure to add some filters so that users can track their expenses and income in the best way (by time, type of transaction, asset type, etc.).
Notifications. Push notifications can be really useful if you make sure they don’t become annoying. Allow users to independently choose which notifications they want to receive. For example, messages about crediting funds, updates, news, etc.

This is not a complete list of features that users of your DeFi wallet can benefit from. The more personalized and unique the experience is that you provide, the more likely your app will stand out from the competition and come out on top. For example, you can create a chatbot that will help users quickly resolve their requests. Another idea is to provide a lending option so users can start earning interest without leaving their wallets. The best option is to research the needs of your target audience to see how you can meet them.

Steps for creating a DeFi wallet

DeFi product development differs in some ways from the development of conventional centralized solutions. All operations on DeFi platforms are powered by self-executing smart contracts. And building secure and functional smart contracts requires good blockchain expertise. Therefore, no matter how familiar you are with blockchain technology, we advise you to enlist the support of an experienced development team who not only knows how to develop a DeFi wallet but also has a portfolio of successfully implemented DeFi projects.

The process of creating a DeFi wallet consists of several stages. Before your development team starts coding, you need to decide on the business part and design of your app. So here are the main steps used to create a DeFi wallet.

Steps of defi wallet development — Steps for creating a crypto wallet

Discovery phase

The discovery phase is carried out in order to determine the goals of the project, its target audience, risks, etc. In order to succeed you need to create an app that will be useful to its potential users. Market analysis will reveal the needs of your potential customers. The competition in the DeFi market is getting stronger as new platforms quickly emerge, so before you start the DeFi wallet development process you should also know which apps are already popular and how you can stand out.

During the discovery phase, business analysts will help you make a list of features and draw up project requirements. This step in the development process also helps to more accurately define the scope of work, the composition of the development team, and the most appropriate technology stack. You will also need to select the type of wallet (desktop, mobile, web) that best suits the goals of the project. According to statistics, the discovery phase makes it possible to optimize the project budget and reduce risks, so we recommend not skipping it.

Architecture development

Based on the data obtained in the discovery phase, we can start building the architecture of the future product. These are the components of the system and how they will interact with each other. Using a ready-made architecture, developers will be able to proceed to the implementation of the tasks assigned to them.

What do you have to decide at this stage? The first question is: how do you want to host your DeFi wallet. There are several options such as local servers, cloud, or hybrid platforms.

Next, you should decide which tokens your wallet should support and on which blockchain platform it will operate. The most popular option today is Ethereum, the main platform for the development of decentralized finance. In addition to its immense popularity, the Ethereum ecosystem also provides white-label solutions that will allow you to reduce development costs and speed up time to market. If for some reason this platform doesn’t suit your requirements, you can choose another one like Binance Smart Chain (BSC).

Finally, any DeFi application is based on a specific algorithm that triggers the authentication of transactions of network members. Be sure to check this task with a DeFi wallet development company that can help you create the best algorithms for your product.

UX/UI design

Would it surprise you to know that it is not enough to find interesting and useful features for an application? A more difficult task is to collect them into a single user-friendly interface. This is where UX/UI designers come in. UX/UI is about more than just creating the look and feel of your wallet. This stage involves the study of user behavior so that the logic of the application interface meets their expectations and needs. We have already mentioned that the poor UX of DeFi platforms is often one of the main reasons why users prefer centralized solutions. The design should become an integral part of DeFi wallet development.

If the designers are part of the development team, this can help design specialists and developers communicate closely which will greatly simplify and speed up the development process. For this reason we advise you to choose companies offering a full range of DeFi wallet development services. For example, the IdeaSoft team can cover a wide spectrum of tasks related to the creation of a DeFi product: from business analysis and design to programming, testing, and support.

Software development

After the stages of collecting information, building of the architecture, and design creation, we can proceed to the technical implementation of your project. To do this, engineers need to choose the technology stack that best fits the intended goals. The areas of focus should consist of programming languages, frameworks, libraries, databases, and other development tools. DeFi wallet development requires deep expertise in building decentralized solutions. As a product creator you need to make sure not only that the app is functional, but also that it is 100% secure and that users can trust it with their funds. Therefore, it is important to work with experienced blockchain developers who know all the features of writing smart contracts, building algorithms, and ensuring system security.

How can you develop a DeFi wallet providing high-grade security? Basic security features include the following:

Two-Factor Authentication. A simple and reliable way to protect user accounts. By creating a unique one-time code for login, you ensure that unauthorized users don’t gain access to the wallet.
Biometrics. Face ID and Touch ID will allow you to authenticate the user every time a cryptocurrency transfer request is generated. This way you can avoid unauthorized transactions.
Multi-signature. This security feature requires more than one user signature to complete a transaction.
Session Logout. If a user does not interact with the wallet for a pre-specified time, the session will end automatically. The time should be determined by a smart contract, and the smaller the amount of time it is, the less likely a fraudster will be able to use a valid session ID.
And finally, don’t store users’ private keys on the system.

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Testing

Software testing is one of the most crucial steps in the development process. It is a best practice to involve QA specialists at all stages of product development in order to not accumulate bugs. Testing the DeFi wallet is not limited to verifying that the features are working correctly and meeting the requirements of the project. You also need to make sure that the smart contracts underlying your application are secure and free from vulnerabilities. A smart contract audit is a complex process that requires a lot of experience, but you shouldn’t skip this step because your investment will be worthwhile.

Examples of DeFi wallets

If you want to create a high-quality and competitive product, it is not enough for you to know how to develop a DeFi wallet, you should, first of all, know what wallets are already on the market. This will help you identify competitors, study their strengths and weaknesses and come up with ideas of how your product can be better. Here are examples of some DeFi wallets and their killer features.

MetaMask. Metamask is a web browser extension that is great for accessing DeFi platforms. It is also available in a mobile version. Metamask has easy integration with most DeFi protocols and supports ERC20 standard tokens, as well as Binance Smart Chain BEP-20 tokens.
Coinbase Wallet. The already mentioned Coinbase Wallet refers to mobile DeFi wallets. It allows you to connect your wallet to your Coinbase account. Also, many users note the convenience of using this app. For example, you can make a transaction by entering a username instead of a long wallet address.
Trezor. Trezor is a cold wallet with a great built-in security mechanism. One of the indispensable features of this wallet is the recovery seed. It allows you to restore access to your wallet if you have lost your device. All you need to do is to enter the words of the seed into your new Trezor device.
Argent. Argent is focused on a mobile-first approach. It helps you easily access popular protocols like Aave and Compound. Argent has a special ‘Guardians’ feature that allows you to recover an account using people or devices you trust. All you need to do is add Guardians to your application, which can be a hardware wallet or a friend.

How we can help

Hopefully this article has given you a quick overview of how to develop a DeFi wallet. Of course, the implementation of each project involves a lot of nuances. If you want to get a solution that best suits your needs feel free to discuss your project with our specialists.

IdeaSoft provides a wide range of blockchain development services. The company portfolio consists of more than 250 successfully completed projects, including DeFi wallets, NFT marketplaces, crypto exchanges, lending/borrowing platforms, DeFi aggregators, and more. We have in-house business analysis and UX/UI design departments, as well as skilled blockchain developers on our staff. IdeaSoft has repeatedly been identified as one of the TOP blockchain development companies according to Techreviwer, Upvotes, and Clutch. Our clients note the high level of organization of business processes at IdeaSoft and the high level of professionalism of the team.

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If you’re looking for a software development company with deep blockchain expertise, we will be happy to help you implement your project. By empowering your ideas with innovative technology, we will work together to bring the most exciting solutions to your business. Contact us today to have a discussion.

Smart Contract Audit: Why and How

Smart contracts are an excellent invention of the XXI century. However, technical vulnerabilities can expose the entire system to the risk of hacker attacks. Both platform users and a company’s reputation can suffer, so it is important to conduct audits to mitigate project risks. Most of all, smart contract audit services are popular among crypto projects like DeFi exchanges, DeFi lending platforms, and others. In such projects, smart contracts are the main engine of the software, where all the logic of work is laid. In this article, we will tell you what a smart contract audit is and how to conduct it correctly.

Why is smart contract audit important?

Cracking smart contracts is a common phenomenon in the crypto world. The causes of the crash are divided into two types: technical code vulnerabilities and human error, and if it is difficult enough to exclude the possibility of human error, it is necessary to eliminate technical errors. This is where comprehensive smart contract audit services can help.

Smart contract auditing is a process that scrutinizes a piece of code to identify bugs, vulnerabilities, and risks. It is often conducted before the code is deployed and used on the main network because then it is no longer subject to change.

As practice shows, all blockchain projects need smart contract audit services because the crypto world is characterized by decentralization and openness. Almost all crypto projects are required to publish source code on Github to prove the purity and transparency of their platform, cryptocurrency, token, ICO, etc.

Let’s say a quality blockchain project goes for an ICO but does not provide the results of smart contract testing and an external audit of the ICO. Trust in such ICO will be minimal, as investors have no guarantees of preserving their deposits. As a result, the blockchain project will not get into the top ICO projects and will receive poor recommendations from experts, despite the innovativeness of the idea. No guarantees – no investment.

The crucial point is that smart contracts should be audited externally. This is because the programmer, who wrote a smart contract, can find flaws in the code, but it is quite difficult for him or her to consider different variants of the logic of his or her smart contract functioning.

Last year was famous for a lot of smart contract attacks because of the poor smart contacts audits. One of the most high-profile events was the theft of $3 million from DeFi Protocol Cover on December 28, 2020. The intruder exploited the infinite mining vulnerability: the hacker invested assets, withdrew them, took the profit, and repeated it several times. Remarkably, the hacker turned out to be decent – he returned the funds.

The hacker used a combination of two minor bugs that are relatively harmless on their own. The first bug is related to memory. There are three types of memory in smart contracts: steak (local variables), storage (the most expensive memory that is stored in the blockchain), and memory (sequence of bytes). Since a smart contract uses all types of memory, this makes it possible to overwrite one variable from storage to memory, change it as a result of the operation, and then use it in the changed form.

The second disadvantage is related to the variables’ order inconsistency when performing operations. For example, you put in a smart contract a variable that has 18 digits, and then it’s written that it has 12 digits – this also causes inaccuracy, but not critical.

Such minor bugs in the smart contract allowed the hacker to do serious damage to DeFi Protocol Cover. Overall, 2020 was famous for a lot of smart contracts attacks that contribute to great losses:

The September 2020 attack on the KuCoin exchange was one of the largest hacks in the history of the industry. The damage was estimated at $280 million.
Harvest Finance also suffered from the hacker attack – a smart contract bug cost them almost $20 million.
Another DeFi project Pickle Finance, suffered a major loss as a result of the attack. Hackers stole more than $19 million.
In November 2020, hackers attacked the Origin Dollar stablecoin – the project lost over $7 million.
In April 2020, the DeFi-protocol dForce was affected by the attack. At the time of the theft, the amount was almost $25 million. The hacker took advantage of a critical vulnerability in the smart contracts.

Types of smart contracts attacks

The number of smart contracts is growing exponentially. Accordingly, the number of smart contracts vulnerabilities and attack vectors on crypto platforms is also growing. Among the most common smart contract vulnerabilities are the following:

Vulnerability	Description
Reentrancy	A smart contract is designed in such a way that the same copy of its instruction in memory can be used simultaneously by multiple users or processes. So users can initiate multiple transactions and potentially exceed their account balance, causing damage to the project.
Timestamp Dependence	A miner can slightly change the timestamp of a block. The number of blocks and average time per retrieval can be used to estimate the timestamp, but this is not a reliable way since the retrieval time is variable.
Gas Limit and Loops	Each block has an upper limit on the amount of gas that can be consumed to perform computer calculations. If the consumed gas exceeds the limit, the transaction will fail. This leads to the possibility of operating multiple denial-of-service (DOS) vectors. Infinite loops may occur in cases of improper gas processing.
Byte array vulnerability	A byte array is very slow, which affects performance. Such an array can be easily taken down with DDoS by sending a large number of requests to it.

Except for these common smart contract vulnerabilities, there are also:

Unchecked Return Values For Low-Level Calls
Bad Randomness
Front-Running
Time Manipulation
Short Address Attack
Arithmetic Issues
Access Control, etc.

Smart contract implementations often have bugs that can lead to fatal consequences. When giving everything to smart contracts, a company should be as confident as possible in them. Here is where smart contract audit services come to the aid.

Smart contract audit services

Typically, smart contracts are audited using two approaches: manual and automated.

Manual auditing involves a team of experts/auditors examining each line of code to analyze it for compilation and re-entry errors. This can further help identify other underestimated security issues.

Manual code analysis can be performed using two approaches – checking a standard list of vulnerabilities or performing a free exploratory check based on the developer’s own experience. This approach is considered the most accurate and comprehensive, as it detects hidden issues such as problems in the contract logic or architecture, not just bugs in the code.

Automated security analysis follows a sophisticated approach to penetration testing and helps find vulnerabilities much faster. This approach is suitable for projects that require faster time-to-market. As part of automated smart contract audits, auditors use a variety of bug detection software. This software helps find the exact location responsible for executing each input and also indicates where a possible error might occur.

However, automated auditing has its disadvantages. Since the software is very fast, it can sometimes miss vulnerabilities or identify any piece of code as an error when it is not. This can cause many serious problems. That is why manual code analysis or manual auditing is highly recommended. Automated testing helps a lot and quickly checks code for vulnerabilities and bugs, but not always understands the context.

So, when testing smart contracts, a blockchain development company uses manual or automatic methods of code analysis, with AI testing tools emerging as a powerful new option. Both have their advantages and disadvantages. For example, manual code testing is used to outline improvements related to efficiency, logic, and optimization of the smart contract. As for automatic code testing, it is less time-consuming and allows testing for vulnerabilities much more quickly.

The process of smart contract audit

One of the main difficulties in developing a smart contract is gas optimization (the fee that a user pays for using a smart contract). If it is high, it will be unprofitable for users. Only experienced developers know how to optimize it in the best way. So it’s also one of the elements of smart contract auditing.

Auditing is a complex process, and usually, it consists of the next 6 steps:

Collecting code design models. We gather the code specifications and review the architecture to assure the guaranteed integration of third-party smart contracts.
Unit testing. We test each function of a smart contract by implementing test cases. Specialists utilize tools to ensure that unit test cases include an overall code of the smart contract.
Manual analysis. Auditors inspect smart contracts row after row to detect potential risks like external calls and service attacks, Front Running Attacks (Transaction Ordering attacks), and so on.
Initial report. We suggest the report containing all the vulnerabilities.
Fixing bugs/errors. Our team of experts fixes each bug/error detected while examining the report.
Final audit report. Specialists publish the final report on Github, which is accessible for everyone to read.

Smart contract code auditing is a rather specific area. Despite its small size, a smart contract is a full-fledged program capable of organizing complex branches. Even for automation of seemingly simple transactions, it requires thinking through all possible branches at every step.

The IdeaSoft experience

Smart contract audit services are popular for a reason. Identifying vulnerabilities and bugs in the contract is a crucial step that every DeFi product creator must take. Anyone can benefit from smart-contract audits: developers, owners of ICO startups, DeFi development companies, as well as owners of decentralized applications. In this way, you protect yourself and your users from the risk of losing their funds.

IdeaSoft is a software development company, one of the main specializations of which is blockchain development. Our team has experience in creating DeFi products, lending/borrowing platforms, NFT marketplaces, crypto exchanges, digital wallets, DeFi aggregators, and much more. A deep understanding of blockchain and experience of over 250 projects allow us to write smart contracts and provide quality smart contract audit services.

So, if you need help with smart contracts, feel free to contact us to discuss your project.

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What is an Algorithmic Stablecoin?

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Why to Develop a Crypto Wallet Application?

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Crypto Wallet Apps Features to Develop

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Developing a DeFi Exchange Platform. What to Consider

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