Enabling the Next Generation of Decentralized Finance with Multichain Collateralized Assets

Matthew Campbell
Jul 10, 2019 · 4 min read
Image for post
Image for post

For those of you who knew me before I was into blockchain, you know that I wrote software on Wall Street. So it’s only natural that I’d be excited to learn about the latest decentralized finance products out there. It’s been interesting to watch all of these concepts be brought into the modern area.

Right now, products like MakerDAO, Uniswap, Dharma, Compound, and dYdX are making such amazing advances in user experience for trading and leveraging assets or stable coins.

However, there’s one area we haven’t heard much about: multichain collateralized assets. Imagine you wanted to offer financial loans out of a combination of cryptocurrencies — utilizing an effective stable coin from collateralized assets such as ETH, BTC, BNB, EOS, and TRX.

This isn’t possible yet, since all of your assets have to exist on the Ethereum blockchain.

But we want to change that.

As we’ve written before about Loom Network becoming interoperable with major blockchains such as EOS and Tron, we now have interchain asset transfers between Tron and Ethereum enabled — and we will soon be adding Binance, Cosmos, and Bitcoin.

We’ve also enabled universal transaction signing for seamless dapp scaling. That means Loom Network now has the ability to verify and accept transactions signed by native Ethereum wallets.

It’s the perfect storm of features that will enable the next generation of DeFi developers to build dapps around multichain collateralized assets.

Image for post
Image for post

What Are Some Cool Multichain Asset Use Cases?

MakerDAO

MakerDAO has one of the most popular stable coins out there — DAI. And many don’t realize it’s actually a complex stabilization system based on loans and collateralized ETH. In the future, they’ll be coming out with a system of multi-token collateralized debt, so you could see other tokens like BNB, LOOM, or others with ETH. It would be really interesting if someone built a multichain collateralized stable coin, so you could collateralize with Bitcoin, EOS, TRON, ETH, etc.

Uniswap

Uniswap is one of the most popular DEXs on Ethereum. Its simple-to-use interface is winning the hearts and minds of everyone. What would be cool is if people could also use BNB, TRX, or ATOM tokens on Uniswap — to swap with ETH and other ERC20 assets.

Compound Finance and Dharma

Compound Finance and Dharma are leading the pack in offering loans and interest on the blockchain. They do this by letting users lock up their tokens for interest so that other people can use the tokens in leveraged trades. Let’s say I’m a BNB user and I want to go long (or short) on DAI or ETH. I can now use my assets on Binance Chain to do this.

dYdX

dYdX is probably one of the coolest new projects for doing cross-chain asset-pool-based lending, leveraged trading, and algorithmic interest rates. Once again, just like above, we now have hundreds of new BEP2 Binance tokens, TRX tokens, and potentially a lot more from other chains. And this just keeps improving the liquidity between assets.

How Do Assets Stay Safe?

Loom Network is a Delegated Proof of Stake (DPoS) blockchain where there is a large distributed set of validators, similar to Cosmos and EOS. The validators must stake their assets to secure the chain, and someone would have to gain over ⅔ of the assets to actually be able to manipulate the chain. Because of this, your assets stay secure while being transferred between blockchains.

Loom Network allows pegged assets to different chains via our Transfer Gateway. It maintains smart contract wallets on Ethereum and Tron, and threshold-based multisig wallets on Binance, Cosmos, and soon Bitcoin.

This means we have a diverse validator set that secures the chain and signs for assets on different blockchains. And in order to unlock a transaction, ¾ + 1 of the validator power must sign it. Thus, there are millions of dollars in secured assets protecting every transaction.

To learn more about our Transfer Gateway, try out our demo here.

What Will YOU Be Building on Loom?

With the tools available to create multi-token collateralized assets, we can’t wait to see what kinds of dapps you build around this.

What’s more, in the coming weeks, you’ll learn about what DeFi stuff we’ll be building into the Loom Wallet. So let us know what you want.

Image for post
Image for post
Deploy your dapp on Loom Network — quickly and at scale.

Loom Network is the multichain interop platform for scaling high-performance dapps — already live in production, audited, and battle-tested.

Deploy your dapp to Loom’s Basechain once and reach the widest possible user base across all major blockchains today.

New to Loom? Start here.

Want to stake your LOOM tokens and help secure Basechain? Find out how.

Like what we’re doing here? Stay in the loop by signing up for our private mailing list.

Loom Network

Distributed Enterprise Platform for Healthcare Providers

Matthew Campbell

Written by

Cofounder https://loomx.io build scalable blockchain games and social apps on the Loom SDK.

Loom Network

Building a distributed enterprise platform for managing data — focused on healthcare providers and government departments.

Matthew Campbell

Written by

Cofounder https://loomx.io build scalable blockchain games and social apps on the Loom SDK.

Loom Network

Building a distributed enterprise platform for managing data — focused on healthcare providers and government departments.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch

Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore

Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store