IOV Labs, the company operating a technology stack based on Bitcoin that includes RSK, has announced the launch of a Light client for the RIF Lumino Payments Network. The Light client enables instant, off-chain payments for any ERC-20-compliant token on IOV’s stack. Lumino operates as the third layer on top of the RSK platform, as part of the RSK Infrastructure Framework (RIF) suite of tools.
The Lumino Light client enables anyone with a mobile device and an internet connection to integrate the distributed security of blockchain. It means that users can access the DeFi ecosystem of stablecoins and ERC-20-compliant tokens based on the RSK and RIF networks, on the go, from anywhere.
Lumino can be considered as a competitor to Lightning Network. In a similar way to Lightning, it opens off-chain payment channels to enable near-instant settlements. Processing capability can scale up to 20,000 transactions per second. According to a press release accompanying the announcement, users can expect compatibility between Lightning Network in the future. Ale Narancio, Head of RIF Payments, is quoted as saying:
"Our goal is to make Lumino compatible with the Lightning Network and other off-chain networks to enhance interoperability and user experience."
The announcement comes only a short time after Money on Chain announced it was launching a range of products based on the RIF token. The RIF Dollar stablecoin is pegged to the US dollar and collateralized by the RIF token in a similar way to how Maker collateralizes the DAI and SAI stablecoins. However, unlike Maker, users don’t have to open a collateralized debt position.
DeFi Pushes the Boundaries
The expansion of the Lumino network is yet a further indicator that 2020 is the year we can expect to see DeFi flourishing away from the Ethereum platform. IOV Labs has already been making strides in this regard since Money on Chain set up home on its stack.
Now, it seems that while the total ETH locked in DeFi is falling, the value of Bitcoin in DeFi is going up. This is according to DeFi tracking website DeFi Pulse, which shows that from 3.1 million ETH locked in DeFi in March, there’s now only around 2.5 million.
Meanwhile, BTC has more than doubled from 160,000 to 323,000 in the same time frame. The shift is likely to have arisen from the fact that Maker started allowing Wrapped BTC (WBTC) as collateral for loans on its platform.
Elsewhere, Ethereum-based decentralized trading platform dYdX has also launched a Bitcoin-backed perpetual contract. BTCUSD perpetuals are by far and away the most popular derivatives product on the market. This perhaps means that DeFi has an opportunity to overcome its most significant barrier to date, which is to achieve comparable liquidity to its centralized competitors.
Despite DeFi’s significant growth over 2019, the lack of interoperability with other blockchains, and particularly Bitcoin, has imposed a "glass ceiling" on further expansion. With blockchain interoperability one of the biggest focus areas for 2020, it seems that DeFi could stand to become one of the biggest beneficiaries.