When it comes to enhancing the capacity for DeFi, it’s no surprise that assets like Bitcoin offer a huge opportunity for the ecosystem to scale.
This week, we saw the launch of pTokens – a tool which enables DeFi composability for any and every token – effectively creating a google translate for blockchain interoperability.
In short, pTokens offer a decentralized approach to wrapping – making assets like BTC, EOS and LTC representable on Ethereum in the form of pBTC, pEOS and pLTC.
For those familiar with projects like Ren, it’s interesting to note that pTokens differ as follows:
“pTokens follow a simple approach to enable cross-chain movement of assets. As Vitalik said, “interoperability can be accomplished with light clients and merkle proofs”. While REN proposes a more complex approach based on multiple layers such as their RenVM, the pTokens bridges are purposely simple in their design.”
In order to get to know the project better, we took some time to chat with Alice Corsini – the head of operations at Provable Things.
Let’s dive in!
Tell us a bit about Provable’s background!
Provable Things was born back in 2015. We ran the longest trending oracle service on multiple blockchains called Oraclize. Shortly thereafter we rebranded into Provable which is still running today.
With Oraclize, we established a skillset working with multiple blockchains (5-6 of the most popular networks) while establishing security and a strong system for trusted computing. When we saw there was a need for cross-chain interoperability in something like DeFi, it was the perfect fit for us.
pTokens was conceptualized in 2017, but it wasn’t until recently that we started to see a very clear demand for it.
Why is there a need for interoperability?
DeFi may be a new term, but it’s not a new concept in the wider ecosystem. Now that the industry has matured in the past 2 years, it’s ready for more concrete use-cases such as DeFi.
We’ve seen DEXs like Kyber and Uniswap reaching similar trading volume to centralized exchanges and while we’re seeing growing interest, there remains a ceiling so long as we’re limited to the assets on Ethereum, mainly ERC20 tokens and Ether itself, when it comes to liquidity.
How do you plan to offer cross-chain liquidity?
We were very intentional about our choice to launch pBTC as our first pToken on mainnet. We plan on using Bitcoin as the first asset and then expand from there. In particular, we hope that DEXs will benefit from Bitcoin’s liquidity while projects like Set Protocol can begin integrating pBTC in their Sets.
As it stands today, wBTC is not very beneficial for market making seeing as the supply is quite limited. With pTokens, we hope to help those same market makers by increasing the capacity for Bitcoin liquidity pools.
What’re your competitive advantages to something like wBTC?
We recognize that wBTC is currently the market leader but we hope that will change once people see that pTokens are more frictionless. With wBTC pegging, users go through a manual process which can take up to 48 hours. With pBTC, everything is automated, making it much faster to wrap your Bitcoin in minutes.
What has the response been from DeFi projects regarding pToken integration so far?
While integration with other projects is very important, we’ve been largely focused on making our infrastructure useful to other blockchains. Seeing as liquidity is the most important thing, our first DeFi integrations are with DEXs like Kyber and Bancor. We’ll be seeding those liquidity pools at first to make it easier for market makers to participate in the near future.
What are some of the bigger use-cases here?
We aim to tap into lending markets in the long-term. To give some more concrete example, Synthetix may choose to use pTokens as collateral for Synths or Maker may integrate pBTC so that users can mint Dai using Bitcoin.
How are you viewing pTokens from a company perspective? What does the revenue model look like?
To start, we launched with 0% fees to incentive usage. Over time, we plan to integrate a service fee in tandem with rewards for validators.
Why pLTC and pEOS as the next choices?
The goal is to eventually bridge any asset from any blockchain. We chose these two as they are among the top 20 crypto assets with large liquidity and communities. It seems that EOS has the second biggest DeFi ecosystem after Ethereum, so it seemed logical to allow those assets to flow over to Ethereum as well.
And what does this process look like? Do you need to get support from the foundations of each of these blockchains?
Well there’s actually pros and cons to this approach. On one hand, working with a foundation to build our liquidity pools could create a negative impact in the sense that we’ve taken a strong stance on decentralization and neutrality.
If we were to engage with a foundation, this kind of involvement could have too much influence on the pToken protocol itself. Seeing as wBTC is actually larger than the lightning network, we’re hoping that pTokens can bring even more liquidity in a truly permissionless manner.
Let’s talk about the mainnet launch. What can users expect?
We wanted to start by offering a front end dApp to easily wrap your assets. The wider vision is to integrate directly with wider protocols. Over time, we want to grow and expand on creating a lean system for blockchains to be connected in a robust and simple manner.
We placed a strong focus on simplicity as to not overcomplicate things. In doing so, we were able to use systems – such as Open Zeppelin’s ERC777 standard – that have battle-tested for quite some time.
If anyone is looking to get started with pTokens, send us an email at [email protected]
Over the coming months, it’ll be quite interesting to watch pToken liquidity ramp up.
Thomas Bertani – the project’s CEO – stated:
“If you have Bitcoin, it’s never been easier to participate in DeFi “
Cooper is the Editor of DeFi Rate and a contributor to leading DeFi outlets like the Defiant and Bankless. He is active in the DAO ecosystem through projects like MetaCartel and Raid Guild where he seeks to incubate governance models and grassroots community development. He is an ambassador of Set Protocol and the Director of Fitzner Blockchain Consulting where he authors a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.