The latest tool by Provable, bringing liquidity and interoperability to DeFi.
The world of open finance grows larger and more sophisticated by the day. Yet this decentralized economy still suffers from two major drawbacks; a lack of liquidity for cryptocurrencies, and cross-chain interoperability.
Liquidity means that an asset can be easily bought, sold or traded. There is still a lot of friction here when it comes to cryptocurrencies, especially when swapping ‘cross-chain’, such as from Bitcoin (BTC) to Ether (ETH).
In an ideal DeFi system, cryptocurrencies will move freely and seamlessly between exchanges, DApps and wallets. By increasing the liquidity of cryptocurrencies and tokens, we enhance their utility and their transformative power. This fluid economy will catalyse open finance and afford everyone greater financial freedom, privacy and autonomy.
Interoperability allows blockchains to become compatible with one another in some way. There are a multitude of blockchains which all offer something different, each with their own unique capabilities, technological frameworks and loyal communities. However, what still remains is the ability to make these different blockchains ‘speak’ to or understand one another on a technological level.
For example, Ethereum is the largest, most developed ecosystem in the blockchain sphere. It has facilitated the most varied amount of blockchain use cases, allowing anyone to create smart contracts and build their own decentralized applications. However, this ecosystem is powered by ETH or ERC-20 tokens, of which there are hundreds! To participate in the network and interact with DApps, you must own its native coin or tokens.
That’s where Provable comes in!
We want to open up the doors to the Ethereum network — linking all blockchain assets to it eventually — creating a universal tool for all DeFi users and developers.
Power of the P — What are pTokens?
pTokens aim to solve the liquidity and interoperability riddle. They are the ERC-20 token version of other, non-Ethereum blockchain currencies.
In this way, pTokens will maximise liquidity for every non-Ethereum based cryptocurrency and pioneer multi-chain interoperability. Your cryptocurrencies will no longer be limited to their native blockchain, becoming useable on the Ethereum blockchain!
The first pTokens to be issued will be pEOS, allowing EOS token holders to easily exchange them into ERC-20 tokens to explore and take full advantage of the Ethereum network. Now, by just owning pEOS, every Ethereum DApp becomes accessible — and vice-versa. Exchange your EOS for pEOS coin, and explore an entirely new ecosystem altogether!
This makes it so much easier — and safer — for EOS holders to turn their coins into ETH.
Typically you’d have to use an exchange service, which are often centralized and may have custodial access to your funds or keys. By turning your EOS into pEOS, you can trade with every ERC-20 token and move fluidly between DApps. pTokens are pegged one-to-one (meaning, one pEOS = one EOS).
In the future we will introduce pTokens to other blockchains. As this system is flexible and can support any blockchain asset, new coins such as pBTC, pXRP and pLTC will soon be available. pEOS is our first release, so keep an eye out for more pTokens to hit your favourite blockchain very soon!
From a developer’s perspective, pTokens also help solve their interoperability issues. Most financial instruments and applications are being built on Ethereum. There are teams trying to emulate and implement similar tools across all other blockchains. pTokens will remove this barrier so that developers don’t have to build the same applications from scratch, instead having full access to Ethereum DApps!
How does it work?
Check out our technical paper here.
Each blockchain has its own individual coding language, protocols and consensus algorithms.
Our new mechanism works like a Google Translate for code, connecting the Ethereum blockchain to the EOS one so they can ‘understand’ each other. It translates the different blockchain’s languages so they can find technological common ground, speak and synchronize with each other, while still preserving decentralization at their core.
This translation tool is known as a Trusted Execution Enclave — a physical piece of hardware where the two blockchains meet to “hash” things out (:P). No one can access the inner workings of this hardware because it’s so heavily encrypted!
We house the two blockchains simultaneously inside this Enclave, including the private keys for each of those blockchains. Only this Enclave has access to both sets of keys so it can interoperate and execute transactions on both blockchains.
Provable’s existing blockchain oracle technology is the foundation for these new pTokens. It’s essentially the same technology repurposed for this incredibly exciting use case. All the pieces were already there — our developer team just rearranged them in a different way!
Are you ready to pOWER up?
This cross-chain movement of cryptocurrencies will enable liquidity to flow throughout the DeFi economy and for the first time, ensure that once non-interoperable blockchains can now be linked!
pTokens bring the world of DApps together. For now they are the bridge between Ethereum and EOS, so you’re free to explore, experiment and get to know the best of what these blockchains offer.
Start your pToken journey here.