The founder of Compound Finance (COMP) foresees a CeFi devoured by DeFi, a challenge which however requires the support of blockchains with strong backs. Compound publishes a white paper on a new blockchain that is supposed to tackle 3 major problems. The cryptosphere does not share the enthusiasm of the team.
Compound Chain is CASH with its white paper
Compound published on December 17, 2020 the white paper of Compound Chain, a new blockchain whose objective would be to allow the transfer of value between blockchains.
The document describes Compound Chain as an infrastructure capable of transferring liquidity and value across multiple distributed networks at negligible cost.
The project is based on Proof of Authority which uses a group of limited validators for governance, with the token CASH as native stablecoin. According to the white paper, CASH would be similar to MakerDAO.
Compound Chain plans to provide a solution to 3 major problems: high fees, systemic risks associated with guaranteed assets, and the inability to manage cryptos not based on Ethereum.
Red Thumb for Compound Chain
Most of the cryptosphere reacted negatively to the announcement of the project. The main criticisms relate to the possibility of increased centralization around the project.
Anthony Sassano argued that these lower transaction fees would be achieved by strengthening centralization.
Decentralization on Ethereum is the source of a lower processing capacity on the network and higher gas.
Sassano believes that the advantages advanced by Compound could be achieved using layer 2 solutions from ’Ethereum.
However, lower transaction costs do not necessarily require centralization. The use of Proof of Authority could theoretically solve this problem.
To justify the creation of a new blockchain, the founder of Compound Finance, Robert leshner, had indicated that Compound Chain enable interoperability of cryptos from other DeFi-supporting blockchains.
The white paper does not provide information on how to troubleshoot compatibility issues.
Is the cryptosphere starting to get fed up with the proliferation of blockchain projects without real added value, or is the COMP community largely made up of “tough tough guys”, explaining the vote against compensation for victims of dishonest liquidations? Compound Chain starts off on the wrong footing in terms of legitimacy. She uses Proof of Authority, but she will have to prove herself to assert her authority and silence the critics.
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