MiT Labs

What does Composability mean in the crypto world?


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"Composability is to software what compound interest is to finance”, this is how programmers find a way to define what composability is.

Compound interest is one of the most used automatic tasks by an investor. It is about using the earnings generated in interest, selling them immediately and redepositing them to generate more interest.

The word "automatic" is key, since compound interest exists to eliminate tasks that should fall into the hands of people, to make our lives easier. The definition of "Composability" can also be included under this principle..

And it is that again it is about the ability to perform tasks automatically to save costs, time and other resources.



What is?


Composability is a characteristic of “intelligent” blockchains, that is, those that began to be created years ago to improve the Ethereum. These are characterized by having dApps or smart contracts that execute preprogrammed tasks.

When it is said that a blockchain it has Composability means that the different smart contracts running on it can run in conjunction with one another. Therefore, every program running on the Ethereum network must be able to function and collaborate with programs created by other developers.

An example makes it clearer: Imagine programming a smart contract to deposit earned interest to users who lock 100 tokens on another platform before June 20. However, you don't have the ability to detect if they did it before the imposed date.




So, ideally, your smart contract will connect with another to determine it. This second smart contract is the one that will check if people made the block of 100 tokens before June 20, it will communicate it to the first and permitthe transactions will be executed.

In this way, the communication capacity between two contracts is what we call “Composability”


The Composability Advantage


As you can see, it is a very useful capability for current blockchains. There is so much information involved, so many possibilities, and so many activities that require all the resources that Composability has become indispensable.

A crypto world without this capability is no longer imaginable as no relevant smart contract should function on its own. In this way, Composability is the principle of "teamwork" in blockchain

Current smart contracts are no longer programmed in isolation, they must be secure and able to communicate with the other applications with which they coexist. In this way, creating a smart contract is a step forward, but also a commitment to network security..

There are many security measures to prevent mass hacking, but that doesn't mean that smart contracts shouldn't think about leaving security exploits that a hacker can take advantage of to steal the assets controlled by different applications.




Therefore, the programs on the blockchain they function as a kind of hive minda. This is great for current proposals that need several transactions in seconds, sometimes we will use 3 or 4 smart contracts thinking we only used one platform. 

All this happens behind the scenes without our knowledge and they offer us a comfort that we will have a hard time giving up. Composability is key to the future of blockchain and to mark the efficiency and difference with respect to the traditional financial world.





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