We are pleased to announce that Router Protocol has received a grant from Terra to expand Router’s cross-chain liquidity infrastructure to Terra.
Terra is an application-specific blockchain built on the Cosmos SDK and Tendermint consensus. The Terra protocol deploys a suite of algorithmic, fiat-pegged stablecoins underpinning a thriving DeFi ecosystem like Anchor, CHAI, and Mirror Protocol. LUNA, the native staking and governance asset of Terra, absorbs the short-term volatility of Terra’s stablecoins, with Terra’s stablecoin (e.g., UST) demand a function of demand for Terra’s DeFi ecosystem — accruing value to LUNA via seigniorage.
At its core, the Terra protocol functions similar to an open-source, on-chain, decentralized central bank — calibrating supply and demand based on an elastic supply model of LUNA, the network’s native staking and governance asset, which absorbs the short-term volatility of the network’s stablecoin pegs in return for predictable, stable long-term mining (i.e., staking) rewards for validators.
The result is a scalable, censorship-resistant currency medium for cross-chain DeFi, stoking demand for apps in the Terra ecosystem, absorbing a TVL of roughly $7 billion — 4th among public smart contract chains.
Router Protocol’s flagship product — Cross-Chain Liquidity Protocol XCLP — will soon be able to support Terra. This means users will be able to seamlessly migrate liquidity from chains like Ethereum, Avalanche, BSC and Polygon to and from the fast-growing Terra chain.
In the current DeFi landscape, users are faced with huge friction when switching liquidity from one chain to another, part of which can be attributed to weak bridging infrastructure that lacks proper testing or has insufficient liquidity to support most trades. Router Protocol is building infrastructure to enable secure, seamless messaging and communication across blockchains. With dozens of new blockchain networks entering the market, liquidity has been fragmented and inefficient. There are a number of projects trying to address the cross-chain connectivity puzzle in various ways, and Router Protocol is at the vanguard of this trend.
The Dfyn Network, Router Protocol’s sister project, also entered into a partnership with Terra earlier this summer and has since been incentivizing liquidity for Terra’s stablecoin product UST on Polygon. According to the latest data from the Dfyn.exchange the stablecoin currency has over $10 million in liquidity on our platform alone.
One common problem with cross-chain bridges is the high number of attack surfaces given the inherent complexity of the implementations. To enhance the security of the solution, we have engaged with multiple security companies for pen-testing and auditing. We will also employ carefully drafted liquidity mining farms which will ensure that the bridge has sufficient liquidity to support most trades. Unlike many other existing bridges, Router Protocol’s bridge will not sacrifice speed for liquidity. Router will also not fragment liquidity across blockchains with multiple wrapped versions of a token.
Continuing on from Dfyn’s partnership with Terra, we are now excited to work with the Terra team to continue to build out world-class infrastructure for the Terra eco-system with Router.
About Terra Money
Terra is a public blockchain built on the Cosmos SDK and Tendermint consensus that deploys an algorithmic stablecoin suite baked into the on-chain layer of the blockchain. Terra’s vision is to wield stablecoins as the conduit for the mass adoption of crypto applications, with fiat-pegged stablecoins maintaining their peg parity via an algorithmic model underpinning a thriving ecosystem of DeFi and mainstream-oriented applications.
About Router Protocol
Router Protocol is building a suite of cross-chain liquidity infra primitives that aims to seamlessly provide bridging infrastructure between current and emerging Layer 1 and Layer 2 blockchain solutions.
Telegram announcements: https://t.me/router_ann