Celsius and DeFi engineering arm CelsiusX will integrate with Chainlink Proof of Reserve to create wrapped versions of tokens such as Cardano, Dogecoin and Ethereum in a bid to unlock cross-chain liquidity.
The initial integration will see lending and rewards platform Celsius bridge wrapped versions of ADA, DOGE, and ETH to the Polygon mainnet, providing holders with access to more cross-chain token utility and DeFi ecosystems on different blockchains.
Following the initial integration, Celsius will then work rapidly to expand its wrapped cross-chain token offerings and supported blockchains in the near term given the flexibility and adeptness of Chainlink’s proof-of-reserve (PoR) architecture in onboarding new assets and chains.
The integration will be one of the first instances of Chainlink PoR being used to help secure the on-chain minting, redemption and burning of wrapped cross-chain tokens – which are tokens pegged to the value of the original asset and created for use on non-native blockchains.
Through the integration, smart contract developers can now build more advanced applications with non-native blockchain tokens by unlocking latent liquidity and bringing greater interoperability to the multi-chain ecosystem.
First, it ensures that the correct amount of tokens are minted by Celsius by verifying whether enough are available in reserves. Secondly, the reserves are fully audible and verifiable in real-time via CelsiusX’s reserves dashboard.
In addition, developers can also integrate Chainlink PoR feeds into their smart contracts to act as an ‘early-warning system’ if reserves become too low.
“Unlike other wrapping infrastructure providers, CelsiusX embraces transparency to eliminate the need for third-party trust,” he said.
“Chainlink is a key infrastructure partner to facilitate that transparency, with Proof of Reserve providing a real-time view into the liquidity and collateralisation of wrapped tokens.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.