If you’re in the crypto space, you know DeFi is experiencing massive growth. Decentralized finance plays a big part in cryptocurrency and blockchain. Pendulum aims to establish the missing link between the fiat and DeFi ecosystems. Find out more about this project & our partnership in this article!
BCA investments x PendulumAs the DeFi space matures, the bridge between fiat and DeFi is a logical next step. Pendulum introduces the missing link between fiat and DeFi, and with this, provides important utilities.
By investing in the project and providing support where needed, we are happy to be helping them in their mission to connect fiat & DeFi. Read on to find out more about what the Pendulum blockchain exactly is, how it works, and what the strongest use cases are.
What is the Pendulum blockchain?Pendulum is a smart contract blockchain network, connecting fiat to the DeFi ecosystem. It is built on the open source blockchain framework Substrate (just like, for example, Polkadot). This framework makes it easier for third-party developers to use Pendulum to write their own apps & smart contracts.
The blockchain makes the advantages of cryptocurrency available to traditional banking. When someone makes a fiat transfer via a bank that has integrated Pendulum, the minting of stable coins is automatically triggered. Then, these stable coins are transferred via the sourche chain (like Stellar, Ethereum or Polkadot) to Pendulum and then to the destination chain. Finally, this transfer gets credited to the bank account in the fiat network as normal.
This means that Pendulum (using the Stellar ecosystem) provides a bridge service (that operates through a decentralized network of bridge relayer nodes). Any transfer can be processed at a fraction of the price of the current infrastructure.
Use casesUsing Pendulum to connect fiat to crypto has strong use cases:
1. Connecting the foreign exchange market to DeFi
Using Stellar’s 15+ fiat tokens & integrations into traditional banking and Pendulum’s smart contract capabilities & bridges to Ethereum and Polkadot, DeFi will be connected and have access to the foreign exchange market & forex liquidity.
2. AMMs: Automated market makers
Often, with the demand for the bridge between fiat and DeFi, there is also the need for automated market makers. This introduces scalable liquidity pools for fiat currencies. On Pendulum, AMM smart contracts are deployed with quick and efficient exchange of fiat tokens.
3. Opportunities for yield earning
By depositing funds into lending pools on Pendulum, or by providing liquidity to automated market makers, fiat token holders can earn rewards. Other fiat-based DeFi applications, such as savings and lending, are also supported.
Pendulum is an innovative blockchain layer, and their solution to connecting fiat to DeFi is definitely a nice addition to the cryptocurrency and blockchain space. Recently, Pendulum has launched their prototype, which is ready for testing on their website. We are excited about Pendulum’s future and are happy to be supporting this open-source blockchain!