Composable Finance raises $ 7 million for cross-chain and cross-layer DeFi interoperability


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Composable Finance, a DeFi interoperability protocol, has announced a $ 7 million increase backed by 16 major blockchain investment firms.

According to a statement published on Tuesday, the financing round was led by Advanced Blockchain AG and Rarestone Capital. Other participants included Alameda Research, Spartan Group, Divergence Ventures and Blockchain Capital.

Composable Finance seeks to improve DeFi synchronicity through a two-pronged approach to interoperability on both Ethereum (ETH) and Polkadot (DOT), with the latter providing a foundation for further cross-chain interactions.

According to Cosmin Grigore, CEO of Composable Finance, blockchain interoperability will lead the emerging technology into “a new world of opportunity”.

Given the asynchronous nature of blockchain space, bridging is often required to port liquidity across layers and chains. In fact, as previously reported by Cointelegraph, cross-chain composability has been seen as a panacea for the problem of liquidity fragmentation in the DeFi space.

In a conversation with Cointelegraph, 0xbrainjar, a Composable Finance developer summed up the project’s end goals:

“We’re seeing Ethereum making a big shift with the popularity of multiple Layer 2s and sidechains – there will need to be an easily accessible glue code middleware infrastructure so that people can create cross-layer applications (e.g. ZkSync < .) > Optimism).”

Such composability could be essential for developing cross-tier strategies for activities like flash loans in the DeFi space, according to 0xbrainjar.

As part of the announcement, Composable announced that it is in the final stage of auditing for several Layer 2 infrastructure solutions. In the meantime, the project plans to launch its Polkadot solutions before the end of June.

With the Polkadot-based solutions essential to the project’s cross-chain interoperability plans, Composable reportedly uses a unique strategy for parachain auctions. The project will reportedly employ a vault strategy that will allow users to deposit Ether or other ERC20 tokens.

The tied ETH or ERC20 tokens are used for yield farming, with 50% of the profits returned to users and the other half used to buy DOT or Kusama (KSM) for the actual Parachain auction.

0xbrainjar explained how the project’s Polkadot solutions will be included in the project’s blockchain composition plans: “With the Polkadot ecosystem, we can enable developers from different ecosystems to deploy smart contracts from different Layer 1s in the same location. and let them interact with each other. “