CelsiusX by Celsius Network
CelsiusX is the DeFi arm of Celsius Network. CelsiusX will form the bridge between centralized and decentralized financial systems so that they can coexist.
Launched on November 4th, 2021, Celsius Network introduces CelsiusX, the DeFi arm of the highly successful CeFi Platform. The mission of CelsiusX is to build the infrastructure to seamlessly bridge CeFi (centralized finance) and DeFi (decentralized finance). It will be the first of its kind in the cryptocurrency industry. You can visit this link for details.
ANNOUNCEMENT (January 2, 2022): CelsiusX will launch on Polygon (MATIC) first by end of the month!
So what is CelsiusX – Cross-Chain Liquidity Bridge & Wrapped Token Platform?
Here is the full transcript from the CelsiusX Video: So who is CelsiusX? CelsiusX is the DeFi engineering arm of Celsius. At CelsiusX we believe in a future where CeFi and Defi financial systems will coexist.
And our mission is to build infrastructure to bridge the two together. So, why do CeFi and Defi need to be bridged?
DeFi replaces centralized institutions with blockchains and smart contracts to facilitate transactions between parties. It enables anyone in the world with an internet connection to have access to services like lending borrowing trading and payments. DeFi is a major technological leap in financial infrastructure but today it still has challenges when it comes to adoption. For instance, many innovative platforms struggle to launch because they cannot bootstrap liquidity.
This is where DeFi-CeFi hybrid institutions like Celsius are well positioned to help users with the benefits of DeFi while still having the familiarity of CeFi.
As a first initiative to bridge the two, CelsiusX has committed to use its multi-billion dollar asset pool to help bootstrap DeFi liquidity. To do this, we are building a token wrapping bridge that will give users the ability to move assets between blockchains and provide cross chain liquidity.
So how does the cross-chain bridge work? The bridge starts by locking assets on one blockchain and minting an equivalent amount of wrap tokens on another blockchain. Using the bridge wrap tokens can be redeemed one for one for the underlying asset at any time. Here is a diagram of the bridge architecture. Let’s go through each component one by one.
It starts by Celsius transferring assets into a trustless and transparent vault on the native blockchain. In this example, ERC20 tokens are deposited into an Enzyme Vault on the Ethereum blockchain. The Enzyme Vault was chosen because it has built-in accounting tools, has fully transparent on-chain vault management and has integrations with whitelisted decentralized applications. Initially, the Enzyme Vault will be managed by Celsius, but in the future a community DAO could govern and manage the vault to further decentralize the system.
A decentralized Chainlink oracle network is then used to ensure end-to-end transparency and auditability of the bridge the oracles will constantly monitor the vault balance and broadcast the data onto a smart contract on the target blockchain. The proof of reserve smart contract provides the on-chain data needed to audit the true collateralization of any wrapped token. The reserve reference fees are updated with the new balance data whenever assets are added or removed from the vault.
Once assets are locked on the native chain and the proof of reserve is broadcasted onto the target chain, new wrapped tokens can now be minted on the target chain using a minting contract. When the minting contract is executed, it first checks the Chainlink proof of reserve contract to ensure enough assets are in the reserve pool. Only if there are enough reserve assets will the minting contract create new wrapped tokens. Conversely, burning wrapped tokens unlocks the native assets from the reserve vault.
Initially, Celsius will manage the minting and burning of tokens. But in the future the bridge will allow for decentralized minting and burning. Once minted, wrapped tokens can be used for DeFi deployment or transfer between user accounts like any other asset on the target chain.
CelsiusX has already partnered with several DeFi platforms and is committed to providing deep liquidity to incubate the wrapped token ecosystem. Celsius users will be able to use the bridge to mint burn and transfer tokens directly within the Celsius app.
We will start with bridging tokens between Polygon and Ethereum but will quickly expand to other blockchains. Unlike other bridges, the CelsiusX bridge will never charge users any fees because the upkeep cost of operating the bridge can be offset by deployment strategies whitelisted in Enzyme Vault Manager. Thanks for watching and we hope to see you in the next video.
So What is Enzyme Finance and the Enzyme Vault?
Enzyme Finance is an On-Chain Asset Manager that allows users to either deposit funds into an existing Enzyme Vault while keeping full custody of your assets or to build a new Enzyme Vault. Enzyme Finance allows you or your company to build and scale Enzyme Vaults based on the investment strategies of your choice – from discretionary and robo to ETFs and market making. Security is our priority. The Enzyme Finance 2nd generation smart contract-enforced platform is thoroughly tested and audited before any mainnet deployments are made. There are close to 100 Enzyme Vaults in existence already. You can find them here.
CelsiusX will use Enzyme Finance’s platform to build Enzyme Vaults for it’s DeFi arm. Enzyme Finance was rebranded from Melon Protocol and it’s native token is MLN. Enzyme Finance (MLN) is tradeable on most large exchanges including Binance and Kucoin. MLN is used to pay for various functions throughout the Enzyme Vault creation process and investment lifecycle.
Enzyme Finance currently has integrations for over 10 DeFi tokens and protocols. The supported integrations include:
- Uniswap and Liquidity Pools
- Compound Lending
- Aave Lending
- Idle Finance
- Curve Liquidity Pools
- Alpha Finance
- Yearn Vaults
In addition, Enzyme Finance now supports over 200 tokens with liquidity from the ecosystem’s best DeFi platforms.
The CelsiusX Projects
Wrapped Token Platform on CelsiusX
Using wrapped tokens to bridge blockchain ecosystems. Wrapped tokens on CelsiusX will provide access to DeFi (decentralized finance) opportunities across blockchains, with no fees to users.
Cross-Chain Liquidity Bridge for CelsiusX Users
Connecting CeFi (centralized) and DeFi (decentralized) by providing blockchain agnostic liquidity and interoperability.
Actively Managed CelsiusX Stablecoin
Bringing together the vision of algorithmic stablecoins with the auditability of fully backed stablecoins in a new hybrid model.
CelsiusX Proof of Community
Providing transparency and real-time auditability by leveraging cryptography just like Celsius Network currently does. The CelsiusX proof of community is in partnership with industry leaders.