Decentralized finance (DeFi) protocol Compound has announced its latest addition to the blockchain network called Gateway on testnet. The new blockchain is built on a Substrate blockchain, and it would enable users to access cross-chain interest rates and collateralized markets.
Gateway Built On Substrate Blockchain
Initially announced in a Dec. 18 whitepaper, Compound had revealed that its latest upgrade would come with a multi-asset platform that enables the transfer of value and liquidity between peer ledgers.
— Compound Labs (@compoundfinance) December 17, 2020
Decentralized protocols have varying asset value on their platform, making it difficult for DeFi to really grow.
Compound aims to address this issue with its Gateway launch. Gateway would allow users to borrow assets native to one network with collateral from another. That means borrow Ether, provide collateral in CELO.
Gateway is said to run on a more modern programming language called Rust. This will see the multi-paradigm programming language increase performance and safety of the blockchain.
The substrate blockchain will also eliminate the consensus algorithms which has plagued older generation blockchains like Bitcoin. Instead, the team settled on building its own application code, enabling it to bring to developers only features that matter the most.
Compound says Gateway is fully upgradeable, which will enable governance token holders to vote on code upgrades without worrying about forks or downtimes.
Gateway would be powered by a dollar-pegged stablecoin called CASH, which would be used to settle interest payments on collateralized deposits.
Network validators (nodes) have also been considered in the upgrade. Compound says validators will earn a portion of all interest in every market in addition to transaction fees.
Gateway is currently running a testnet on Ethereum’s Ropsten testnet and will go live in the coming months.
Compound Reaching For The Stars
Compound says its goal does not end with Gateway. The DeFi platform could evolve into the backbone of a global interest rate market with the capacity to support any asset, including future currencies, assets, and tokens.
In the coming months, it has set clear goalposts for the Gateway project. Stress tests will be conducted before the mainnet launch. Gateway would also be integrated into its Compound protocol currently running on Ethereum’s blockchain network. Compound Finance is a big player in the DeFi space with around $5 billion in locked funds, according to DeFi Pulse.
Compound’s token rallied 15% following the announcement. This surge has seen it climb one step higher to rank as the 40th most valuable crypto by market cap, according to coinmarketcap. It currently trades at $510 at press time; the asset has come a long way from its ATH of $535 on Feb.13. The crypto-asset now has over $2.3 billion market valuation and is projected to rise further before the year runs out.