Polygon and Stellar Now Interconnected Using Chainlink’s ‘Proof of Reserve’ — Unlocking Over $10 Billion In Value
Stellar and Polygon blockchains are now interconnected through Chainlink’s technology, thanks to an innovation by NewsCrypto. Following the innovation, Polygon, which is the protocol that facilitates the scalability of dApps on the Ethereum blockchain, is now availing the Stellar native token XLM for trading, lending, and decentralized finance usage. The crypto is also now easy to port to dApps on Ethereum and other blockchains linked with it.
XLM, which could not be used on the Ethereum network because it’s not developed with a compatible protocol, is now available on Polygon as a wrapped token. With the innovation, Stellar Lumens users will be able to perform instant swaps on Ethereum at near-zero cost. It is also a massive evolution because both Stellar and Ethereum blockchains support massive scalability or transaction throughput.
The connectivity between Stellar and Polygon, and Ethereum blockchains will unlock more than $10 billion in value in the Polygon and Ethereum ecosystem, obviously by making it valuable in decentralized finance or DeFi projects.
“The Stellar bridge represents an important pivot for us into infrastructure projects,” said Vid Gradišar, CEO of NewsCrypto. “The Stellar ecosystem is criminally underserved by popular interoperability solutions, far less than its capacity would imply. We knew that without us, it would’ve stayed the same, so we went ahead and connected the $10 billion XLM ecosystem to DeFi on Polygon.”
It will also allow DeFi projects to transfer liquidity from and to their projects according to Arjun Kalsy, vice president of Growth at Polygon.
The interoperability bridge is possible through a bridge created by NewsCrypto using ChainLink’s Proof of Reserve technology. It is made secure through the use of decentralized multi-sig schemes and has been audited by Proxima. NewsCrypto received a grant from the recently announced grant program, to create this new bridge. At the same time, NewsCrypto – which already has a crypto token known as NWC built on Stellar blockchain, is departing from providing crypto education.
The Proof of Reserve protocol helps to protect user’s funds on blockchain from unforeseen fractional reserve practices while providing smart contracts with data needed to calculate the true collateralization of on-chain assets backed by off-chain reserves. Normally, it isn’t clear for a smart contract based on the blockchain to determine and verify the true underlying value of a collateral that is backing a token used in the smart contract hence Proof of Reserve seals that gap. For that reason, it enables transparency of the DeFi ecosystems and blockchains themselves.
Text source: ZyCrypto
