The DeFi industry has exploded in popularity over the past couple of years, and has grown rapidly as a result. The entire sector is now estimated to be worth well over $100B.
Despite this, the sector remains disjointed and disparate, and it is becoming increasingly apparent that cross-layer and cross-chain interoperability will be essential for the future of the increasingly connected blockchain ecosystem.
As it stands, there are still very few interoperability solutions for cross-network communication and value transfer. This results in fragmentation and disparity, and results in siloed infrastructure that restricts developers’ building capabilities.
The First Cross-chain Cross-layer Interoperability Infrastructure for the Multi-chain Universe
Composable Finance - also known simply as “Composable” - is aiming to become the cross-chain cross-layer interoperability infrastructure for the multi-chain universe. Built on Polkadot, and powered by layer 2 Ethereum, it is building hyper-liquidity infrastructure layers for DeFi assets.
Essentially, Composable operates via a unique “ecosystem-as-a-service” model. It enables teams to build decentralized applications (DApps), irrespective of their underlying L2 scaling layer or L1 blockchain. As well as providing services to its own company and community as a Web 3.0 and DeFi technology developer, the company invites outside projects to leverage its knowledge and expertise.
While a number of companies in the industry are currently exploring solutions to this problem, there are very few that provide a unique, all-encompassing solution like Composable does. Composable’s primary focus has always been on the technology, which has led to it creating a new layer that is designed to sit on top of existing chains. Ultimately, this will bring a full-scale, entirely interoperable ecosystem to the Polkadot Network.
‘Composable’ isn’t just the name of the company - it also represents the kind of technology that it is trying to create. In fact, its community is often referred to as “composers.” The team has also created the Composable Grants Program, which gives teams and individuals the opportunity to apply for funding in order to develop cross-layer applications and customizable building blocks, known as “pallet,” for Picasso - the Kusama parachain. In addition to being granted access to Composable’s full tech stack, those chosen will be introduced to key investors, and will also be provided with development and marketing support.
A Brief History of Composable Finance, and a Glimpse into the Future
Composable Finance originally started in 2020 as an incubated project of the publicly traded German blockchain organization, Advanced Blockchain AG. Composable’s CEO, Cosmin Grigore, who formerly worked as the lead of software at one of the largest software companies in Romania, noticed that there was a distinct lack of interoperability between multiple blockchains and layers. This resulted in significant fragmentation and disparity across the DeFi ecosystem.
The project has come a long way since then. In February 2021 it was spun out into its own company, and in June 2021, Composable closed its $7M funding round. In addition, it has joined forces with Polygon in order to integrate Polygon’s scaling solution into its layer 2 bridge link, and more recently it has partnered with Arbitrum to utilise its protocol for seamless cross-layer transfers.
The Composable Finance development roadmap has two phases:
The first phase focuses on multi-layer (L2/L2) interoperability, designed to bridge the gap between different Ethereum layer sidechains and implementations.
The second phase focuses on the launch of the Picasso parachain, which is designed to enable a complete DeFi ecosystem on Polkadot. Picasso has been especially designed to allow DeFi developers to build on it, and it is optimized for the construction, innovation, and success of decentralized finance tools.
Composable Finance’s Plans for the Kusama Parachain Auctions
Last month, Composable Finance entered into the Kusama parachain auctions. Although the company was unsuccessful in the most recent round of auctions, it has recently announced that it woud be taking part in the next round of auctions, and will introduce additional rewards for its early supporters:
“Composable itself has strived to obtain a Kusama parachain at auction, and unfortunately was not able to accomplish this during this round of auctions. However, it was clear that our community supports our mission and that our efforts to further incentivize the parachain contribution process for users is effective. As a recap, we have increased our rewards to 30%, with an additional 10% of rewards being distributed in the following manner — 5% to contributors who previously staked in our prior crowdloan, and restake the same amount. Additionally, 5% will be distributed to stakers who contribute to our next crowdloan after it has reached 100,000 KSM. These bonus rewards would be distributed during the next round of parachain auctions.”
At the time of writing, it seems that Composable is likely to win the #12 auction slot on Kusama under the Picasso brand. According to data from Parachains.info, Picasso holds roughly 33,000 more KSM than the next project on the leaderboard.
Looking to the Future of Composable Finance
Composable currently enables the quickest and most seamless experience to transfer assets from the Ethereum mainnet to other L2’s, and is one of the few solutions that bridges blockchains across ETH and Polkadot with ease.
The team have made tremendous progress since starting up less than only a couple of years ago, and they have been the first to create solutions in both the ETH and Polkadot ecosystems that have the ability to enable cross-chain interoperability - a truly remarkable feat. We look forward to what the future holds.
To stay up to date with Composable, you can follow them on Twitter or become a part of their Discord community.