Short About: Pendulum Network
What is Pendulum?
Pendulum is an open-source Substrate-based blockchain that intends to bridge the gap between the fiat and DeFi ecosystems by using a sophisticated smart contract network. It will allow DeFi to be connected to the foreign exchange market, as well as establish automated market makers (AMMs) to provide scalable liquidity pools for fiat currencies and generate yield earning opportunities for fiat token holders.
Pendulum is developed by SatoshiPay, has completed an oversubscribed $5m presale in 2021, received a grant from Web3 Foundation and an R&D funding from Stellar Development Foundation. Pendulum’s sister network Amplitude will participate in the next Kusama auction on 29th June, 2022 — the waitlist with bonuses for early supporters is already available.
Few words about Stellar
Stellar is an open-source network for currencies and payments. It allows you to produce, transfer, and exchange digital representations of any currency and is intended to connect all of the world’s financial systems on a single network.
Considering Pendulum’s importance in the Stellar community, the Stellar ecosystem is an excellent breeding environment for bridging the current financial system with DeFi: there are already 15+ global currencies (and counting) accessible as fiat tokens on Stellar via on/off-ramps compatible with traditional finance. By integrating Stellar to DeFi through Pendulum, the fiat banking system will be able to access DeFi goods and services.
Substrate-based open source blockchain
Pendulum is based on Parity’s Substrate framework. It is a tried-and-true framework (Polkadot is also built on it), which makes it simple for third-party developers to create their own apps and smart contracts for Pendulum. Building on a community-based architecture also allows linking with other chains and protocols.
Spacewalk: the bridge between Stellar and Polkadot
Spacewalk is the first bridge between the Stellar network and the Polkadot/Kusama ecosystems that permit stable tokens from the Stellar network to migrate. It will allow the Pendulum chain to use the Stellar blockchain’s multitude of fiat stable currencies, assisting in the development of the fiat DeFi future. Based on XCLAIM and InterBTC, Spacewalk is built as a Substrate pallet. It means that any Substrate-based blockchain can construct a direct Stellar bridge. Spacewalk development is supported by a grant from the Web3 Foundation.
Spacewalk’s Vaults Solution
Spacewalk evolved from InterBTC by substituting Bitcoin components for Stellar-based components. InterBTC is a Polkadot parachain Bitcoin bridge that leverages over-collateralized vaults to achieve decentralization via decentralizing the locking account itself, rather than the owners of the locking account. There are some significant differences between Bitcoin and Stellar:
- Stellar supports a wide range of assets, and any Stellar user has the freedom to build their own unique assets
- Stellar does not use Nakamoto consensus, but a custom consensus algorithm known as Stellar Consensus Protocol (as a result, it is impossible to determine whether a sequence is genuine basing just on sequences of block headers)
Vaults With Multiple Assets
Each vault on Spacewalk will be able to hold multiple assets. It employs a Stellar feature known as trustlines for this purpose. The feature can regulate which assets it supports for bridging by creating trustlines for certain assets on the vault account in Stellar. When bridging, users also specify the asset they want to issue or redeem. With several assets, calculating the collateral value of each vault gets more complicated, demanding the protocol to use a price feed oracle. In order to overcome the oracle issue, Stellar Oracle comes into play.
The Stellar oracle is decentralized and, by design, as secure as the Stellar network. It makes advantage of particular aspects of the Stellar Consensus Protocol, a Stellar-specific consensus method.
Spacewalk’s Development Plan
- Milestone 1 : Define the project’s basic structure (current)
- Milestone 2: Put in place a system for managing collateral for multiple Stellar assets
- Milestone 3: Put the Stellar Oracle and all of its components into action
The Spacewalk bridge will combine Stellar and InterBTC breakthroughs to rise to a new era of trust-minimized bridges in blockchain. This high level of decentralization, security, and trustlessness can enable Pendulum to become the missing connection between fintech fiat services and DeFi.