Composable Finance is a project backed by he publicly traded German-based blockchain organization Advanced Blockchain AG. In late 2020 it began development as a cross-chain and cross-layer interoperability platform.
It also offers a hyper-liquidity infrastructure layer powered by Layer 2 of Ethereum and Polkadot protocols for DeFi assets.
Composable Finance is working on a suite of different products to launch cross-chain and cross-layer interoperability that is going to not only reduce the barriers for DeFi developers but also remove the unnecessary complexity for the users.
The Evolution of Blockchain Created Composable Finance
Bitcoin was the first one built for a decentralized and peer-to-peer digital asset due to its unique economic security model that is borderless and censorship-resistant. Then, Ethereum appeared to bring much flexibility and extensibility to the space by a programmable blockchain that can run decentralized applications.
When the platforms like Bitcoin and Ethereum have been more and more raising their interest and attention, the limitation started appearing then sparking a debate around scalability issues.
Blockchain technology has developed with the key value proposition of decentralization, which is the ability for networks to be owned and run by millions of stakeholders rather than the conventional corporate models of governance.
However, when the number of blockchain networks continues to grow, most of them remain cut off from each other. Like islands with their own communities and economies, they cannot exchange information or value with the outside world.
The lack of interaction between blockchain networks not only limits decentralization but also prevents the advancement and relevance of the technology. When applications are designed for one network, they only can work within that network, therefore, that limits their potential for broader adoption.
Several projects have been developed to address these issues by building bridges between networks since it will allow applications to build on each other’s services and strengths.
As a result, Decentralized Finance (DeFi) can get benefits from increased liquidity and the ability to build a network of services that connects across communities leading to their user increase and the expansion of the available resources.
One of the problems to be addressed is the lack of cross-layer (L2/L2) Interoperability. At the present, no protocol facilitates moving between different L2 applications.
Moving between L2 applications requires users to move back to the L1 chain first, which is highly insufficient due to long lockup periods, taking a few weeks, and a lot of fragmentation.
This lack of cross-layer (L2/L2) interoperability makes applications on one L2 network can’t communicate with the applications on another L2 network, therefore, infrastructures are siloed and complexity increased.
Composable Finance Takes the Lead
Composable’s CEO Cosmin Grigore has a bold vision for the future…
Read More: blockonomi.com