DeFi lending protocol Compound printed a white paper on Thursday introducing Compound Chain, a brand new blockchain geared toward offering cross-chain worth switch functionality.

Reactions to the information have been overwhelmingly unfavourable with many respondents on social media taking problem with the perceived centralization considerations related to the venture. Maybe anticipating a unfavourable response from “Crypto Twitter,” Compound Labs even restricted replies on its tweet asserting the venture.

In line with the white paper, Compound Chain is a blockchain structure that may permit cheaper worth and liquidity switch throughout completely different distributed networks. The venture will make the most of Proof of Authority, or PoA, consensus amongst a gaggle of validators to manipulate the chain with CASH because the native stablecoin foreign money.

Whereas not heavy on particulars, the white paper did qualify CASH as being much like MakerDAO’s Dai. Nonetheless, not like Dai, CASH shall be used to settle transaction charges on the Compound Chain.

As a part of Thursday’s printed documentation, Compound Chain is a response to a few main issues — excessive fuel charges, aggregated dangers related to supported belongings, and the shortcoming to deal with non-Ethereum-based belongings. By utilizing PoA amongst a restricted variety of validators, Compound Chain can, in concept, provide sooner transactions.

Nonetheless, as is commonly the case, greater transaction throughput is achieved on the expense of decentralization. Certainly, critics like Set Protocol’s Anthony Sassano argued:

“Although the rationale [ETH gas fees are] costly is as a result of Ethereum’s throughput is proscribed resulting from its excessive decentralization – Compound Chain will solely have low charges as a result of it is going to be a lot, a lot much less decentralized because it’s a PoA chain (the place the validators are chosen by COMP governors).”

Relatively than creating a whole blockchain, Sassano opined that Compound might obtain the identical goal utilizing layer-two options on the Ethereum chain. Nonetheless, layer-two deployments additionally include added composability considerations, particularly for DeFi customers.

Defending the venture’s determination to create a brand new blockchain, Compound Finance founder Robert Leshner highlighted that Compound Chain would allow bridging crypto belongings issued on different blockchains to “the place DeFi occurs,” which means Ethereum. Leshner singled out belongings like central financial institution digital currencies (CBDCs) as seemingly use circumstances for the cross-chain function of the deliberate community.

As beforehand reported by Cointelegraph, the Compound Finance founder is assured of future synergistic relationships between each centralized finance (CeFi) and DeFi. Nonetheless, the preliminary white paper didn’t include a proof of how the venture will remedy compatibility points whereas transporting non-Ethereum-based belongings to the Ethereum chain.

The information of the deliberate Compound Chain blockchain is coming lower than every week after a deliberate compensation fund for customers affected within the large Dai liquidations that occurred on Nov. 26 did not garner sufficient votes.