Thanks to an innovation by NewsCrypto, the Stellar and Polygon blockchains are now interconnected using Chainlink’s technology. Polygon, the protocol that enables the scalability of dApps on the Ethereum blockchain, is now accepting the Stellar native currency XLM for trading, lending, and decentralised finance usage as a result of the invention. The cryptocurrency is also now simple to port to dApps on Ethereum and other blockchains that are linked to it.
XLM, which could not be utilised on the Ethereum network due to the lack of a compatible protocol, is now available as a wrapped token on Polygon. Stellar Lumens users will be able to make near-zero-cost fast swaps on Ethereum thanks to the invention. It is also a significant evolution because both the Stellar and Ethereum blockchains allow tremendous scalability and transaction throughput.
The link between the Stellar and Polygon blockchains, as well as the Ethereum blockchain, will release more than $10 billion in value in the Polygon and Ethereum ecosystems, presumably by making it valuable in decentralised finance or DeFi projects.
The Stellar bridge represents an important pivot for us into infrastructure projects,”Vid Gradiar, CEO of NewsCrypto, stated. “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.”
According to Arjun Kalsy, vice president of Growth at Polygon, it would also allow DeFi projects to transfer money from and to their projects.
The interoperability bridge is made feasible by NewsCrypto’s use of ChainLink’s Proof of Reserve technology. It is secure because of the usage of decentralised multi-sig techniques, and Proxima has audited it. NewsCrypto was awarded a grant from the recently announced grant programme in order to build this new bridge. At the same time, NewsCrypto – which already has a crypto coin called NWC built on the Stellar blockchain – is moving away from 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.