The Gateway testnet – the next home for decentralized finance (DeFi) money market Compound – is now live.
The Substrate-based blockchain is fully embracing interoperability, where application developers build on every base layer and not just Ethereum, Compound Finance founder Robert Leshner said in a phone interview.
“Gateway is really designed for a multi-chain future where assets live on multiple blockchains and where decentralized finance applications and logic runs on multiple blockchains as well,” Leshner said.
The project was first laid out in a December 2020 white paper under the name Compound Chain with specific reference to catering to central bank digital currencies (CBDCs). It’s currently available via Ethereum’s Ropsten testnet.
“Ethereum might be the core of where most applications and assets live, but there are going to be popular DeFi applications on other chains and there are going to be popular assets issued on other chains. Gateway is designed to connect Ethereum between different blockchains so users can move value between them more easily,” he added.
Leshner said Gateway will be able to port assets from one blockchain to another using Gateway specific bridges called “starports.” An Ethereum starport is now active on testnet, he said, with the community responsible for adding further bridges. He expects the testnet to run for two months before fully launching.
As on off-shoot of Compound, Gateway will be governed by the same COMP token first released in June 2020. The same rights and responsibilities associated with the token accrue to owners on Gateway, such as the ability to add new assets. Yet, as Substrate-based blockchain, Gateway will have increased functionality given its highly modular design, Leshner said.
“When there’s a new version of the blockchain, there is not a hard fork,” Leshner said of Gateway’s flexibility. “You can update the chain in real time … whenever that code is ready.”
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Through Gateway, Compound Finance could become the keystone to an envisioned “multi-chain future” where Ethereum quite simply isn’t enough to handle a new financial system. Ethereum-compatible chains like NEAR, Polkdaot, Solana and now Gateway are bets on this hypothesis coming true.
Gateway, Leshner said, “is designed to be a cross-chain tool and not a scaling tool.” The new chain will someday provide a bridge for assets without demanding token wrapping or other piecemeal shortcuts for getting blockchains to talk to each other.
Layer 2 solutions like rollups are important, Leshner said, but miss the point on what a multi-chain future is trying to accomplish. Having different chains means different rule sets can talk with each other and exchange value. With rollups, you still operate under Ethereum’s governance structure.
“We love all these scaling solutions for Ethereum. All of those are going to make Ethereum cheaper and more usable and that’s a good thing,” he said. “We’ve looked at all those solutions but they don’t really achieve what we want to do