Compound Labs disclosed a white paper on Thursday presenting its plans to generate a Compound chain on banks. An application-specific blockchain capable of providing money market services across multiple networks.
Robert Leshner, the compound’s founder, told CoinDesk over the phone that they wanted to announce the designs for a blockchain. That could ascend Compound over the next century.
Leschner, Jeffrey Hayes, Jared Flatow, and Max Wolf, in a draft whitepaper supplied to CoinDesk, outline the three limitations of Ethereum’s present Compound. Platforms that are unable to issue gas prices and other assets. The fact that the chain and all supported assets accumulate the risk of each supported asset.
Additionally, newly backed assets are not trustworthy and do not link to unauthorized blockchains. The new project says to support central banks’ and investment banks’ upcoming and alleged digital assets.
Banks’ Concatenated Protocol
The white paper represents a reimagining of the Concatenated Protocol. As the only distributed ledger with the potential to address these limitations. And to prepare the Concatenated Chain for the fast adoption and growth of digital assets on a variety of new blockchains. This movement includes Eth2 and central bank currency ledgers.
It also adds that the Compound Chain joins the ensemble of blockchain interoperability efforts. However, it is, to some degree, distinctive because it attempts to do so in an application-specific way. Though there might be similar attempts, they were not able to pave the way for it. On the other hand, Leshner acknowledged the stablecoin and payments chain, Terra, as one of them.
While this is a completely new and isolated blockchain, it will govern by the same Ethereum-based system that runs Compound v1 (COMP token). Once the compound chain launches, this will consider a new set of powers accumulated by COMP owners.
After an hour of the announcement, COMP surged as high as 10% in price, as stated by the data from Messari.
Cash
Aside from this, COMP will also introduce a new cryptocurrency called Cash.
This token will be used to pay for transactions on the network. Cash will stamped in much the same way as Debt Against Locked Collateral held on the compound chain.
Like DAI, CASH will attach promptly to the U.S. dollar. However, its peg may change due to governance decisions. Unlike DAI, Cash will earn from a percentage of the interest paid on blockchain-based loans. The specific amount is one of many boundaries distinguished by COMP holders who participate in governance votes.
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