Composable Finance: Exploring Interoperable Cross-chain Ecosystem

UTC by Godfrey Benjamin · 4 min read
Composable Finance: Exploring Interoperable Cross-chain Ecosystem
Photo: Composable

The end result of Composable’s technology is a robust cross-chain ecosystem facilitating blockchain-agnostic functionalities for applications between different ecosystems.

Amongst the major platforms within the Decentralized Finance (DeFi) ecosystem, Composable Finance comes off as one with an entirely different approach. As a cross-chain focussed platform, Composable is pushing for seamless interoperability amongst protocols. Based on what is currently obtainable, the alternative to enabling blockchain interoperability amongst different platforms has often been centered around building a multi-chain protocol whereby users can switch from one network to the other. But Composable thinks DeFi and its end-users can get better.

A quick look at the Composable tech stack, reveals how ambitious it is in delivering the cross-chain promise. To start with, the Composable cross-chain virtual machine (Composable XCVM) is a single, developer-friendly interface to orchestrate the interaction with different bridges, manage routing, initiate call-backs into smart contracts, and more. The XCVM can facilitate these while ensuring high throughput and transaction finality at scale.

By veering off the multi-chain route Composable Finance’s cross-chain capabilities addresses the limitations of a multi-chain framework. Composable Finance is designed such that the core functionalities of DeFi bordering on key areas such as liquidity and other operational aspects are not fragmented on a siloed blockchain as is obtainable in the splintered, multi-chain ecosystems. The cross-chain model as envisioned by Composable is a rather futuristic outlook as it aids an easy scaling and integration of many different DeFi protocols, rather than trying to infuse them all into one.

Composable Finance leverages established blockchain networks like Polkadot and Kusama to lease its parachains slots  (the Picasso Parachain (custom-built Layer 1 blockchain) on Kusama, and a parachain on Polkadot, the Composable Parachain) both of which form the foundational layer for cross-ecosystem communication and orchestration.

“Cross-chain interoperability in DeFi is not just a singular, finite concept, capable of being resolved instantaneously with the establishment of cross-chain bridges,” the Composable Finance team said in a note shared with Coinspeaker. “This is a common misconception perpetuated by so many projects working to resolve lack of interoperability in the space. Instead, at Composable Finance, we conceptualize cross-chain interoperability as occurring on a continuum, beginning with the most basic level of cross-chain transfers and expanding to chain-agnostic behaviours.”

Highlighting the Core Composable Finance Innovations: Mosaic and Mural

One of the significant essences of interoperability amongst protocols is the ability to source liquidity seamlessly to allow asset transfers across different blockchains. The Composable Finance ecosystem has various distinct innovations to help it achieve this primary goal. These include their underlying infrastructure: Picasso and the Composable Parachain, Mosaic and the XCVM.

Mosaic is Composable Finance’s transfer availability layer that connects and unifies an extensive array of major DeFi ecosystems. Composable Finance created an SDK whereby protocols that wish to implement cross-chain functionalities can integrate Mosaic into their product and provide enhanced capabilities for their users.

To understand the utility of Mosaic, here is a quote from 0xbrainjar, head of product at Composable Finance: “Composable’s vision for Mosaic has been to connect all protocols, chains, and layers for a chain-agnostic, money lego world, with Mosaic serving as the primary orchestrator of cross-chain movements. We don’t believe there should be ‘one bridge to rule them all’; instead, we aim to bring together all thoughtful interoperable developments across DeFi protocols and become the transfer availability layer with liquidity forecasting and rebalancing of LP funds. As more and more DeFi protocols build out their cross-chain infrastructure, Mosaic will utilise them for faster and cheaper liquidity rebalancing.”

Beyond the DeFiverse, Composable Finance’s Mural NFT transferral system is essentially targeted at fostering Non-Fungible Tokens (NFTs) transferability across multiple chains, thereby unlocking a new set of cross-chain use cases for these digital collectibles. Mural can support all types of NFTs such as PFPs, Musical NFTs, gaming and more. “The Metaverse is impossible without interoperability, necessitating infrastructure like Mural to be Realized. Only when complete interoperability is unlocked will the metaverse provide users with maximum utility and value”, 0xbrainjar shared in an article.

The end result of Composable’s technology is a robust cross-chain ecosystem facilitating blockchain-agnostic functionalities for applications between different ecosystems. Composable Finance has some exciting roll-outs coming up including Mosaic v2, Picasso and the Pablo Decentralized Exchange (DEX) in the near future.

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