The Foundation, the lead development firm of Algorand, granted pNetwork an undisclosed amount to enhance the decentralized finance (DeFi) ecosystem via “pNetwork bridges” in order to boost asset liquidity and NFT transfers across blockchains.
Algorand Foundation team will mentor and work with the pNetwork development team in creating Algorand-focused bridges allowing users to connect and communicate with other blockchains and external assets, a statement to our desks reads.
Blockchains are innately built to receive and process data from internal systems in order to preserve and improve security. However, this makes platforms such as Algorand natively difficult to integrate and interoperate with other platforms and blockchains outside its blockchain.
Once the bridges launch on pNetwork, users and partners on the bridge will be able to expand their DeFi activities onto Algorand by adding “synthetic tokens” – or external assets to the latter’s blockchain. This will be similar to having wrapped tokens on Ethereum such as wrapped Bitcoin (wBTC).
This will support the explosive growth of DeFi applications on Algorand allowing them “access to the larger crypto market and opening up [Algorand] to the flourishing DeFi ecosystem,” said Thomas Bertani, Project Lead at pNetwork said in the statement.
Essentially, the bridges create synthetic tokens, cryptocurrencies backed 1:1 to their native versions, on Algorand, which can be redeemed at any time and transferred to Algorand. This will further boost the goal of Algorand – enabling the transition of the traditional finance world to DeFi ecosystems.
The decentralized cross-chain composability network bridges currently support a host of cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), and Binance Smart Chain (BSC) among others.
At the core of the partnership, pNetwork aims to boost asset liquidity on Algorand while boosting the whole DeFi market. Moreover, the pNetwork bridges are set to enable “assets and tokens from other chains to move freely on the Algorand network,” Sean Lee, founder and CEO of Algorand stated.
The cross-chain bridges to Algorand are expected to go live later in the summer as a new chapter for Algorand DeFi users comes to life via the pNetwork bridges. Blockchain interoperability features and asset transfers are also expected to commence at launch.