A decentralized financing project based on EOS, Equilibrium has announced that it will develop a new interoperable protocol for the Polkadot (DOT) blockchain.
The project aims to develop an independent parachute linked to Polkadot, with a separate utility token called EQ. It serves both as a token for paying transaction fees and for controlling the protocol.
Equilibrium started as an analog of MakerDAO in EOS, but its CEO, Alex Melikhov, told Cointelegraph so The transition from Polkadot will also include an expanded suite of products.
In addition to a lending protocol that supports a new interoperable stable coin, it will also enable widespread asset lending, similar to platforms like Compound and Aave.. A decentralized exchange and a platform for synthetic assets are also planned.
The key to this transition is interoperability with DeFis Ethereum and other blockchains.. Melikhov said that a planned user experience enhancement does not need to create separate Polkadot accounts when they are not needed. Assets from one chain could be collateralized to obtain credit on another blockchain without the need for additional steps.
Although the EOS-based balance remains in place, Melikhov said that “We cannot build the same technology on every blockchain. “, This suggests that the core of the protocol will be developed in Polkadot and then linked to other chains.
In addition to interoperability The new protocol will also formalize bad debt risk through a special class of “guarantees”. Unlike MakerDAO gatekeepers, who are only rewarded on billing, Guarantors make money by simply providing liquidity for the log. When the system repays the under-secured debt, the guarantors also receive part of the borrower’s collateral.
Melikhov explained that Borrower interest rates will take this into account as well. “The interest rates are not set arbitrarily, but are calculated dynamically based on the global risk of the system and each position“said.
Explain Polkadot’s choice Melikhov said that performance is an important aspect of this as “the team is very committed to delivering”.. This has led the developers to significantly optimize blockchain operations thanks to the use of a simple language like Rust.
Also, praised the higher degree of decentralization of the network compared to some alternatives, as the number of nodes is not limited to a fixed set.
Like other projects in Polkadot, The equilibrium is currently being developed on the substrate and is expected to enter the test network phase later as a stand-alone blockchainin the third trimester. Substrate is a blockchain development framework that can also be used to start independent chains. Once Polkadot finishes deploying the fragments and parachutes, Equilibrium will be integrated into the larger ecosystem.
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