Compound to Facilitate Cross-Chain Borrowing Through Gateway
Compound, which is a decentralized finance lending covenant, has introduced a unique blockchain that facilitates cross-chain collateral. It is the latest step to nullify costly functions on the Ethereum ecosystem and pave way for compatibility in the DeFi environment.
The latest Gateway chain, revealed on March 2, is explained as a a cross-chain interest rate platform that permits users to borrow assets that represent a particular chain, for example Ethereum, using collateral from a different chain, such as Polkadot or Celo. Compound Finance initially revealed the platform in December 2020 when it was referred to as ‘Compound Chain’.
Compound intends to remove prevailing divisions in the DeFi sector across various blockchains with Gateway and has selected the next-generation blockchain infrastructure, Substrate, for achieving the objective.
Substrate, which also strengthens the Polkadot ecosystem, is a modular infrastructure that facilitates to establish purpose-built high-output blockchains. Robert Leshner, Compound founder, detailed the reason for selecting blplatform in the blog post:
“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.”
To improve Gateway, Compound intends to create ‘Starports’ which would operate as on-and-off-ramps, to the unique blockchain for users to lend or deposit an asset in the form of collateral. Leshner detailed that Starports are the “glue” that links a blockchain to Gateway, and they can blended and mated in several amalgamations for various networks.
Gateway will have a native crypto named CASH for standardization of value throughout several diverse assets and be utilized to settle transaction charges. CASH is offered as reward for providing liquidity and acting as network validators. Gateway currently runs on Ethereum’s Ropsten platform as a testnet and audits will happen before the launch of mainnet, even though further date was not announced.