Crypto synthetics are virtual representations of assets that retain the underlying value. The process of pegging a new digital asset to an underlying asset is referred to as “tokenization”, a trend that has been picking up across various verticals spanning anything from finance to real estate.
Examples include stocks, property, cryptocurrencies, or even fiat which is tokenized as stable coins. Once an asset is tokenized, it gains properties such as global availability, fractional ownership, and ease of transfer.
This gives their owners the ability to interact with their value using all the advantages of blockchain technology, with the catch that the interactions are confined to the respective blockchain the asset was issued on.
We are excited to announce that we are working with KNIT.Finance to enable tokenization of Elrond assets on other blockchains, and vice versa, bring in new assets in Crypto, Capital and Bullion asset classes.
“The tokenization of everything is an emerging mega-trend that will soon engulf all business verticals. The collaboration with KNIT Finance is part of our efforts to make the global value landscape interoperable and available at internet-scale.” said Beniamin Mincu, Elrond CEO.
KNIT Finance is a DeFi platform that focuses on cross-chain synthetics and making them available for use cases including trading, lending, and margin services. By enabling assets from one chain to be tokenized on another chain, KNIT is effectively enabling a liquidity pool spanning multiple blockchains.
The collaboration will enable eGold and Elrond assets to be tokenized and issued on other blockchains, and vice versa. As a result, DeFi products on the Elrond mainnet will be able to include tokenized assets originating on other chains or outside of the blockchain space completely, while DeFi products on other chains will be able to use tokenized eGold.
“The Elrond blockchain has some desirable technical properties such as high throughput, low costs, and highly configurable tokens, which we believe our users will find appealing. We’re excited to become a part of the fast-growing Elrond DeFi ecosystem!” said Sainath Gupta, KNIT Finance CEO.
The collaboration is important for the Elrond ecosystem because it allows value issued on other chains to be used in DeFi cases on our mainnet. Furthermore, eGold owners can leverage their holdings in DeFi opportunities on other blockchains, enabling them to access a more diverse product landscape.
Elrond is the internet-scale blockchain, designed from scratch to bring a 1000-fold cumulative improvement in throughput and execution speed. To achieve this, Elrond introduces two key innovations: a novel Adaptive State Sharding mechanism, and a Secure Proof of Stake (PoS) algorithm, enabling linear scalability with a fast, efficient, and secure consensus mechanism. Thus, Elrond can process upwards of 15,000 transactions per second (TPS), with 6-second latency, and negligible cost, attempting to become the backbone of a permissionless, borderless, globally accessible internet economy.
About KNIT Finance
KNIT Finance is a unique decentralized protocol that combines synthetics across multiple chains, bridges, and real world markets with yield, lend, trade and margin services through smart contracts. This also gives cross chain liquidity aggregation in a completely transparent and 100% verifiable. KNIT Finance is a community led initiative.