Celsius Integrates Chainlink Proof-of-Reserve (PoR) to Help Secure Cross-Chain Wrapped Tokens

*Wrapped ADA, DOGE, and ETH are now available on Polygon.

Celsius is excited to announce that — in collaboration with our DeFi engineering arm CelsiusX — we have integrated Chainlink Proof of Reserve (PoR) to unlock cross-chain liquidity through wrapped tokens. This integration represents a pioneering approach to creating a hybrid CeDeFi application and marks one of the first instances of PoR being used in-production to help audit and secure the on-chain minting, redeeming, and burning of wrapped cross-chain tokens.

The integration involves bridging wrapped versions of ADA, DOGE, and ETH to Polygon mainnet, enabling smart contract developers to create advanced decentralized applications while utilizing non-native blockchain tokens. The Cardano, Dogecoin, and Ethereum communities can now securely lock up their tokens to access a wide range of DeFi applications on Polygon, including decentralized exchanges, lending and borrowing, yield farms, and more. The result of this integration is a seamless union between CeFi and DeFi enabled by hybrid infrastructure involving a trustless layer that creates interoperability and unlocks cross-chain liquidity in the blockchain space.

Wrapped tokens are on-chain assets that are pegged 1:1 to the value of another asset. The mechanism ensuring that the peg is held between the wrapped token and the underlying asset can vary between different designs, but it traditionally involves opaque manual processes, with users unable to verify asset reserves on-chain, or a single party or a small number of parties controlling the issuance or supply, subjecting the wrapped tokens to centralization and a single point of failure.

Chainlink Proof of Reserve eliminates inefficient manual auditing processes by replacing them with on-chain real-time audits. This enables developers to use PoR as a circuit breaker that halts minting/burning if fractional reserve activity is detected, helping mitigate against the minting of unbacked wrapped tokens. Not only does Chainlink PoR enable the real-time auditing of Celsius’ wrapped tokens, but it also checks the collateralization of its Enzyme vault reserves to help trigger the minting, redeeming, and burning smart contract functions.

If you’d like to read a more in-depth explanation of how Celsius is using Chainlink PoR to help secure wrapped tokens, read our previous announcement or watch this short explainer video.

[Click on image above for clearer view of the diagram schematic]

In summary, by integrating Chainlink PoR to help create fully auditable wrapped cross-chain tokens, Celsius has created a powerful CeDeFi application that unlocks liquidity in the multi-chain ecosystem. Celsius will also implement CCIP to help wrap and unwrap tokens in a fully decentralized manner that does not rely on the Celsius application.

The are several features that make Chainlink PoR the best fit for our use case:

Automated On-Chain Audits — By keeping an up-to-date reference contract, smart contracts can get automated, on-chain verification of an asset’s collateralization, removing the need to conduct manual audits.
Reliable Nodes — Chainlink PoR Data Feeds are secured by a large collection of independent, security-reviewed, and Sybil-resistant oracle nodes run by leading enterprises, data providers, and DevOps teams who have a strong on-chain history of performance even during periods of extreme network congestion.
Decentralized — Chainlink PoR Feeds are decentralized at the data source and oracle node level, eliminating central points of failure in the sourcing and delivery of external data to Celsius.
Transparent — Chainlink PoR Feeds can be monitored by anyone in real time, allowing users to verify the current collateralization of assets.

“We’re excited to deepen our integration with Chainlink and bring together the decentralization and transparency guarantees of DeFi with the broad functionality and high performance of CeFi,” stated Celsius Network Founder and CEO Alex Mashinsky. “Ultimately, all stakeholders benefit from this type of hybrid CeDeFi infrastructure — users are able to add cross-chain utility to their tokens while developers can provide stronger assurances that the wrapped tokens used in their applications are secured by battle-tested decentralized infrastructure.”

-Via this site: Celsius Integrates Chainlink Proof of Reserve (PoR) to Help

About Chainlink

Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.

Learn more about Chainlink by visiting chain.link or reading the developer documentation at docs.chain.link. To discuss an integration, reach out to an expert.

About Celsius

Celsius is a democratized reward-earning and crypto lending platform accessible via web and mobile app. Built on the belief that financial services should only do what is in the best interests of the community, Celsius is a modern platform where membership provides access to curated financial services that are not available through traditional financial institutions. Crypto holders can earn rewards by transferring their coins to their Celsius account and can borrow USD or stablecoins against their crypto collateral at interest rates starting at 1% APR. Download the Celsius App and start your journey to financial freedom today!.

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