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Swingby Boosts Security Of Skybridge With Chainlink Proof Of Reserve

Unlike wrapped token infrastructure that requires trust in a centralized third party, Chainlink Proof of Reserve (PoR) uses Chainlink’s decentralized oracle architecture to perform automated on-chain audits of an asset’s collateralization on one chain and suspend minting of wrapped assets on another chain if they become under-collateralized. This allows users to more securely move digital assets between blockchains while protecting DeFi protocols against insolvency.

Swingby is one such DeFi protocol that allows users to move assets between chains without a central custodian. This week, Swingby announced that its first product, Skybridge, integrated Chainlink PoR to help secure its trustless bridges for swapping assets between blockchains like Bitcoin, Ethereum, and BNB Chain.

Skybridge’s protocol uses threshold signature cryptography and multi-party computing to effectively function as a “technical custodian” instead of an institutional custodian. PoR automatically checks that reserve assets on a native chain match the wrapped assets minted on another chain. If a wrapped asset becomes unpegged from the reserve asset, PoR triggers an automatic circuit-breaker that temporarily suspends the ability to mint wrapped assets.

Swingby’s founder and CEO, Yusaku Senga, told Chainlink Today that PoR enables Swingby’s users to more securely move digital assets like Bitcoin into the growing DeFi ecosystem.

“The greatest benefit of integrating PoR for us and our users is that our bridge can automatically track the reserves of wrapped Bitcoin (WBTC) through the Proof of Reserve contract,” he said. “With PoR, our nodes will automatically stop the ability to bridge when WBTC has a depegging incident. Thus, a huge increase in security was added to Skybridge with this new feature.”

He believes PoR provides essential infrastructure for the growth of the entire DeFi space.

“Proof of Reserve is a security feature that adds immense value to the DeFi and crypto ecosystem,” he said. “With the constant increase in the number of blockchains and Ethereum layer-2s, having a decentralized way to track the backed amount of tokens in each blockchain is of major importance. I see PoR being implemented massively by all sorts of DeFi applications.”

In order for the DeFi industry to continue expanding and evolving, Senga said maintaining the highest safety standards through reliable decentralized infrastructure is key. “It is a privilege to have the opportunity to work with one of the major and most respected projects in the entire crypto world like Chainlink,” he said.

To learn more about Swingby, visit their website, Twitter, Telegram, Discord, and Medium.

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