- Polygon Labs and GSR debut new DeFi-focused blockchain Katana.
- Katana will privilege choose monetary purposes in a bid to restrict siloing of cryptoassets.
- It additionally revives a controversial function that was rejected by Polygon POS customers final 12 months.
Polygon Labs and crypto buying and selling agency GSR on Monday launched a brand new, Ethereum-based blockchain with a focus on DeFi.
Dubbed Katana, it’s designed to deal with two of essentially the most urgent points within the sector, in keeping with executives at Polygon Labs and GSR: unsustainable yield fueled by token inflation and the siloing of digital belongings throughout dozens of blockchains and a whole bunch of purposes.
Tokens have been unfold skinny throughout myriad platforms, creating comparatively inefficient markets regardless of crypto’s multi trillion-dollar world valuation.
“Each chain is constructed the other of what you’ll need for deep liquidity,” Marc Boiron, CEO of Polygon Labs, instructed DL News in a current interview.
“You actually have 30 decentralised exchanges on a series,” he added.
However his resolution comes with a catch: not like the extremely aggressive ecosystems of most normal goal blockchains, Katana will prioritise choose monetary purposes.
It is going to additionally supply a number of incentives for customers to deposit their crypto in these purposes.
In doing so, it revives an initiative that induced an uproar amongst customers of the Polygon POS blockchain final 12 months.
In December, three organisations proposed depositing within the Morpho lending protocol about $1.3 billion value of idle stablecoins languishing on the bridge that connects Polygon to Ethereum. Whereas that will have yielded an estimated $70 million in annual curiosity, it was lambasted as playing, nevertheless conservatively, with person funds and promptly withdrawn.
Boiron stated the proposal was misunderstood and that it could face little to no opposition in a brand-new blockchain.
Katana lured greater than $200 million in deposits previous to its Monday debut, in keeping with the information launch from the mission.
‘No person’s anxious’
Idle crypto ported to Katana from Ethereum can be robotically despatched again to Ethereum to be deposited in low-risk lending-and-borrowing swimming pools on Morpho, in keeping with Boiron. These swimming pools can be managed by threat administration companies Gauntlet and Stakehouse Monetary.
Yield from these swimming pools can be re-routed to Katana to spice up yield doled out by its most popular monetary purposes.
This function comes courtesy of a brand new protocol dubbed VaultBridge. At the very least 10 competing blockchains constructed atop Ethereum are contemplating integrating VaultBridge, Boiron stated, although he declined to call these blockchains.
Katana isn’t Polygon’s try to revive the failed proposal from December, in keeping with the chief, however the inverse: VaultBridge was developed for Katana, and keen third events acquainted with the expertise needed the function to make its debut on Polygon POS.
Boiron attributed the proposal’s failure final 12 months to the truth that it omitted key particulars, in addition to rivals’ effort to discredit the initiative.
“No person’s anxious about it on Katana, as a result of so long as customers know and choose into it, it’s their threat to take,” he stated. “The yield goes to be extra conservative than any possibility that’s out there on Katana.”
VaultBridge is one in every of simply several features that assist increase yield on choose monetary purposes on Katana.
Collectively, these options will give these purposes a bonus over rivals which may in any other case siphon away customers’ crypto.
Katana’s built-in decentralised change is a modified model of Sushi, a long-running decentralised change on Ethereum and dozens of different blockchains.
Its lending protocol is Morpho, a fast-growing upstart sporting person deposits totaling greater than $6.5 billion as of Monday.
Katana may also privilege a memecoin launchpad and a decentralised change for perpetual futures, in keeping with Boiron.
“There’s no level in Aave attempting to return and deploy [on Katana] as a result of they’re simply going to lose,” Boiron stated. “It’s an excessive amount of cash flowing by to Morpho, and it wouldn’t make sense for them to strive. Identical factor for Uniswap.”
Katana token
The blockchain itself can be managed by the nonprofit Katana Basis, slightly than tokenholders.
Katana is a so-called layer 2 blockchain, one which processes and batches transactions earlier than sending them to Ethereum for ultimate settlement. Layer 2 blockchains let customers benefit from Ethereum’s safety whereas avoiding its notoriously excessive transaction charges.
Most layer 2 blockchains, reminiscent of Arbitrum and Optimism, are ruled by ostensibly leaderless cooperatives which are made up of traders who maintain the blockchains’ native tokens.
The Katana token, KAT, is not going to come with governance rights, in keeping with Boiron.
“Governance tokens are disasters,” he stated. “At any time when it appears to be like easy, it’s as a result of any individual’s controlling what’s occurring in a totally centralised method.”
As an alternative, Katana will accrue worth by a complicated model that powers sure crypto protocols, reminiscent of Aerodrome.
“It’s an opinionated chain, and we’re not gonna faux that it’s decentralised,” Boiron stated of Katana.
The Katana Basis, Polygon, GSR, and crypto agency Conduit will make decisions for the blockchain through a nine-member committee.
A separate committee of 13 representatives from “aligned purposes” will function a safety council with energy to veto adjustments or make adjustments within the occasion of an emergency, reminiscent of a hack.
Boiron declined to call committee members attributable to safety issues over multi-signature wallets.
Polygon Labs has already constructed a blockchain: the favored Polygon POS. However, the Polygon Labs CEO doesn’t see Katana as a competitor.
That’s as a result of each blockchain must specialise so as to succeed within the hyper-competitive crypto ecosystem, he stated. As Polygon POS turns its focus to stablecoins and real-world belongings, Katana can serve in its place for merchants who wish to do enterprise on an Ethereum-based blockchain.
Furthermore, they profit from a shared architecture that simplifies shifting crypto from one to the opposite.
“All these fintechs, all these establishments, are going to maintain onboarding the POS they usually’re going to supply funds and remittances to their customers, they usually’re going to see a boatload of stablecoins sitting there,” Boiron stated.
“And so they’re going to say, why don’t I supply some financial savings product to my customers?” he added. “And that’s what Katana permits for.”
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You possibly can attain him at aleks@dlnews.com.
