Celer Network introduces new DeFi layer-2 scaling project

www.cryptoninjas.net 2021-02-19 04:40
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Celer Network, a layer-2 scaling platform, today announced the launch of Layer2.finance, a new project that aims to bring a low-cost and trust-free gateway to explore and benefit from the DeFi ecosystem.

Layer2.finance enables quadratic scaling of the existing layer-1 DeFi ecosystem “in-place” with no protocol migration needed and therefore, does not cause liquidity fragmentation or break composability. This is achieved by using an optimized layer-2 rollup construct to aggregate N small-fish users’ fund allocation transactions on layer-2 into a single one on layer-1 in a trust-free fashion.

“Layer2.finance uses layer-2 rollup in a different way. Similar to any rollup, a user can deposit funds to the Layer2.finance rollup chain by making a deposit transaction to the rollup contract on layer-1. However, different from most popular approaches, Layer2.finance does not migrate DeFi protocols themselves to layer-2. Layer2.finance generalizes the interface between layer-1 and layer-2 beyond simple fund deposit and withdrawal transactions and enables computation instruction relaying. It accepts a large number of users’ “fund allocation instructions” as roll-up transactions, computes the aggregated effect of all these small liquidity movements, and then makes a small number of rebalancing transactions across supported protocols to match the aggregated effect. In effect, Layer2.finance reduces the O(N) fund allocation operation cost for N users to O(1) operation cost for supported protocols. ”
– The Celer Network Team

The launch of Layer2.finance is scheduled for the end of Q1 2021; the exact release date will depend on security audits, and how quickly the number of supported strategies can be integrated.