Compound Finance, the decentralized finance (DeFi) lending protocol, has revealed a new blockchain to enable cross-chain collateral.
It has been reported that it is the latest move to mitigate expensive operations on the Ethereum network and enable more interoperability in the DeFi ecosystem.
However, the new Gateway chain has been described as a cross-chain interest rate market that allows users to borrow assets that are native to one chain, such as Ethereum, with collateral from another chain, such as Polkadot or Celo.
The report said that Compound Finance originally announced the platform in December 2020 when it was called ‘Compound Chain.’ Compound aims to alleviate current fragmentation in the DeFi industry across different blockchains with Gateway and has chosen the next-generation blockchain architecture, Substrate, to do so.
Compound’s latest offering, Gateway, will enable cross-chain lending and borrowing https://t.co/eP1tq9r0WF — Cointelegraph (@Cointelegraph) March 4, 2021
Substrate, which also powers the Polkadot network, is a modular framework that enables developers to create purpose-built high-throughput blockchains.
Robert Leshner, the founder of Compound, said:
“We chose Substrate so that we could focus on building application code, instead of inventing consensus algorithms; it’s a modern framework built on a modern language, Rust.”
Likewise, to complement Gateway, Compound is planning to build ‘Starports’ which would function as on, and off-ramps, to the new blockchain for users to borrow or deposit an asset as collateral.
Leshner elaborated that Starports are the “glue” that connects a blockchain to Gateway, and they can be mixed and matched in various combinations for different networks.
As per the sources, Gateway will also have a native unit of value called CASH which will standardized value across various disparate assets and is used to pay transaction fees. CASH will also be earned by liquidity provision and network validators.
Thus, Gateway is currently running on Ethereum’s Ropsten network as a testnet, and audits will be carried out before the mainnet launch, though no date was specified for this.
Source: Cointelegraph