We recently put out a blog talking about the current landscape of bridging canonical tokens and the major issue of vendor lock-in if the DeFi community continued down the current path. We put out the call for the community to take a stance and start pushing for a more sustainable Open Canonical Token Standard. Today we are excited to announce that ParaSwap has joined us in combating vendor lock-in and adopted the Open Canonical Token Standard! They have also partnered with us here at Celer in order to further expand their multi-chain strategy. We will work together to ensure that they remain free from vendor-lock-in issues as they continue to expand. As one of the best DEX liquidity aggregators across Ethereum, Polygon, BSC and Avalanche, ParaSwap’s governance token, $PSP, is now able to be bridged from Ethereum to BSC, and with even more chains being scheduled for bridging integration in the near future. This makes using $PSP for liquidity mining, governance voting, and other applications across multiple chains now possible. Users can transfer their $PSP tokens across various chains by using cbridge.celer.network and by accessing ParaSwap at https://paraswap.io.
Say No to Vendor Lock-in, Together
ParaSwap aggregates decentralized exchanges and other DeFi services in one comprehensive interface to streamline and facilitate users’ interactions with decentralized finance on Ethereum and EVM-compatible chains. Since they have continued to receive overwhelmingly positive feedback from users across multiple blockchain ecosystems, it is time that they expanded their governance token to be usable beyond just the Ethereum blockchain.
ParaSwap is a team with a deep understanding of the multi-chain ecosystem and saw the huge security and ecosystem risks for adopting the third-party canonical bridge: namely vendor lock-in. Long before we approached the ParaSwap team about the Open Canonical Token Standard, these amazing minds realized that if they did choose to adopt an existing third-party canonical token bridge in order to move $PSP from Ethereum to other chains, the $PSP token would forever be bound to that particular bridge. This comes with some potentially catastrophic side effects, to name just a few: if the bridge they selected is down, their multi-chain ecosystem is down; if the bridge was hacked, there can be an infinite amount of $PSP minted; if the bridge decides to raise their fees later on, there is no way they can switch to a different solution since their $PSP token would be bound to that bridge.
As we have both reached the same conclusions about the risks associated with vendor lock-in, this was a mutually beneficial and natural partnership. By adopting the Open Canonical Token Standard, ParaSwap will be able to allow multiple bridges to concurrently use the same canonical token for their $PSP token. This is because every bridge will be minting the same type of canonical mapping tokens, instead of different hard-to-unify ones. Each bridge can also be dynamically allocated with a maximal mintable cap based on the DAO’s assessment of the security level, the user experience, as well as other factors associated with that specific bridge.
With this integration, ParaSwap now has third-party bridges work for the interests of the project, not the other way around.
We at Celer are very excited to join forces with the ParaSwap team to build an open interoperable blockchain future that places the benefits and interests of the users and project ecosystem as a whole first.
This is Just The First Step
With an aligned vision and goal of building a multi-chain-native ecosystem, enabling $PSP is the first step towards a potential collaboration that will enable ParaSwap to provide unified liquidity and a unified user experience across multiple chains. With cBridge’s generalized message passing SDK release on the horizon, ParaSwap and Celer will discuss the potential of allowing users access to multiple blockchain DeFi ecosystems and liquidity on a single chain without the tedious challenges of moving and managing assets across multiple chains manually.