Celsius’ digital asset management platform stems from the world of centralized finance (CeFi). Since the recent explosion of decentralized finance (DeFi) made possible by oracle-powered hybrid smart contracts, Celsius has broadened its horizons, aiming to build infrastructure for a synergistic “CeDeFi” ecosystem that marries DeFi’s yield and transparency with CeFi’s institutional capital and familiarity.
Last week, Celsius announced the launch of CelsiusX, its DeFi engineering arm geared toward building the framework for a multi-chain future by wrapping digital assets in a trustless and transparent manner. Unlike other existing wrapped token infrastructure that requires trust in a centralized third party, CelsiusX will integrate Chainlink Proof of Reserve (PoR) to mint wrapped tokens, which are collateralized on their native blockchain, on a target blockchain in a trustless, auditable fashion.
“CelsiusX is very happy to be one of the first to integrate Chainlink Proof of Reserve,” Carl Hua, Chief Architect at Celsius and the head of CelsiusX, told Chainlink Today.
“Chainlink PoR is state-of-the-art technology which allows verifiability and transparency in the wrapping process, showing that wrapped tokens minted will match the amount of tokens available. It will also enable real-time 1:1 redemption of wrapped tokens in a trustless manner. This is a use case that was not previously possible for wrapping operators.”
By enabling the creation of highly secure and auditable wrapped tokens, PoR unlocks cross-chain liquidity and facilitates interoperability within the wider blockchain ecosystem.
CelsiusX’s initial integration of PoR will bridge wrapped versions of ADA, DOGE, and ETH to the Polygon mainnet, with near-term plans to expand wrapped cross-chain token offerings through Chainlink PoR’s flexible multi-chain architecture.
Hua explained that while the initial CelsiusX bridge and wrapping infrastructure will include elements of centralization with Chainlink PoR providing transparency into the wrapping process, CelsiusX will progressively adopt decentralized wrapping, minting, and bridging in order to scale infrastructure through Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
“Chainlink’s CCIP will be a core infrastructure element of the decentralized wrapping and bridging process, paving the way for multi-chain and multi-asset expansion,” he said. “With CCIP enabling decentralized wrapping and bridging, CelsiusX will help facilitate fair, open access to the DeFi ecosystem across blockchains for the broader community.”
Hua said decentralized services such as PoR and CCIP make Chainlink a key infrastructure provider that will ultimately enable Celsius to accelerate DeFi’s mainstream adoption.
“The combination of a transparent bridge from CeFi to DeFi, coupled with real-time, auditable wrapping systems, could open the door for more users, institutions, companies, and non-crypto native players to utilize the opportunities of DeFi.”