Compound
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Compound

Introducing Gateway

Three months ago, our team published a whitepaper for “Compound Chain”, a distributed ledger capable of transferring value & liquidity between peer ledgers. While many bridge solutions rely on wrapping (porting) assets, a cross-chain interest rate market would allow you to borrow assets native to one chain (e.g. ETH), with collateral from another chain (e.g. DOT).

Today, we’re proud to announce a prototype based on that paper, named Gateway.

Gateway is a Substrate blockchain, governed by COMP token-holders on Ethereum. From the get-go, Gateway is fully upgradeable; governance is able to directly upgrade the blockchain by voting on code upgrades, without forks or downtime.

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.

Functionality

If you’re familiar with how the Compound protocol works, Gateway should feel intuitive, with a few improvements:

  1. Interest is earned and paid in dollars, using CASH, Gateway’s native unit of account. If you borrow one Ether, you’ll only ever owe one Ether.
  2. The Gateway risk engine is more robust; risk is based on the volatility of assets you use as collateral, as well as the assets you borrow — leading to capital efficiency improvements for less volatile assets.
  3. You can quickly and inexpensively transfer any asset in Gateway to other users — even wallets from other blockchains.

There’s a lot to discover: get started by visiting compound.cash.

Validators

Validators (nodes) earn a portion of all interest, in every market, in addition to modest transaction fees. This creates an incentive to properly validate transactions that scales with the growth of Gateway.

On the Gateway testnet, anyone can become a validator; in production, validators (or the process for choosing validators) will ultimately be chosen by governance.

Next Steps

Gateway will evolve into the backbone of a global interest rate market, capable of supporting any asset — including the wave of currencies, assets, and tokens yet to be created. But it starts with humble beginnings.

Starting today, Gateway is running as a testnet, connected to Ethereum’s Ropsten testnet.

Over the coming months, we’ll work with the community & validators to:

  • Audit the codebase, improve all aspects of the blockchain, conduct stress-tests, and finally launch to production.
  • Connect Gateway to the Compound protocol running on Ethereum.
  • Add Starports on other blockchains.

There’s a lot of work to do — and we’d love your help. Join the community forum at comp.xyz and the Discord #development channel.

From all of us at Compound Labs, 📈.

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Compound is an algorithmic, autonomous interest rate protocol built for developers, to unlock a universe of open financial applications.

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Robert Leshner

Robert Leshner

Full-stack founder of Compound. Chartered Financial Analyst, previously a finance guy.

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