Quickly Understand Persistence: How to Achieve Interoperability Between NFT and DeFi Ecosystems?

This article is an original piece by Chain Catcher, authored by Alyson.

IOSG mentioned in its 2020 annual review and outlook that for off-chain users wanting to participate in digital asset trading, the infrastructure of DeFi is still not mature enough, and traditional financial services cannot directly engage in the crypto world due to regulatory constraints. Therefore, it predicts that the hybrid collaboration model of CeFi + DeFi will be the development rhythm for the foreseeable future. Recently, the market has been quite hot for Persistence, which serves as a bridge between the two. This project is an interoperability protocol aimed at connecting traditional finance with DeFi and using DeFi functionalities to solve real-world financing issues.

On the team side, Persistence CEO Tushar Aggarwal previously established Southeast Asia's first regulated crypto venture capital fund, LuneX Ventures. Its CTO Deepanshu Tripati provided white-label services for Reliance (backed by Facebook and others) and ultimately sold it to an African fintech company for $9 million.

It is understood that Persistence has two main business focuses: one is to provide loan services for financial institutions, and the other is to build public chain infrastructure to support DeFi and NFT products, utilizing NFT technology to help tokenize traditional assets, thereby allowing more new money to flow into the crypto ecosystem. This article will provide a comprehensive analysis of Persistence from the perspectives of technical solutions, product roadmap, and the economic model of the XRPT platform.

1. Underlying Support for Interoperability Technology

Persistence's SDK is a standardized module set that can be used to simulate markets and facilitate value exchange. The SDK modules can be integrated into existing applications. These modules can also be used in various arrangements and combinations to form entirely new markets. The Persistence SDK supports asset trading and financing that covers the end-to-end trading process. For example, the Comdex DApp was built from scratch using the SDK, and other teams will use the SDK from the Cosmos/Tendermint ecosystem for their builds.

With underlying technical support, Persistence can connect DeFi with traditional finance in four steps:

1. Tokenize real-world assets, such as invoices, using NFTs;

2. Trade already tokenized real-world assets (presented in NFT form) with stablecoins;

3. Use these tokenized real-world assets (presented in NFT form) as collateral to borrow stablecoins (initiate loans);

4. Bundle or package loans into ERC721 debt pools to create fixed-income investable products (debt securitization).

2. Focusing on DeFi, NFT, and PoS

Persistence's partners include Comdex, Plend, Audit.one, Pstake, and Asset Mantle, focusing on the three areas of DeFi, NFT, and PoS.

Comdex is an institutional commodity trading and trade finance platform. Its market entry strategy is to collaborate with family offices and small to medium-sized enterprises, leveraging their business networks to drive adoption. So far, Comdex has processed over $41 million in transaction volume, with its on-chain assets exceeding the total of its competitors.

Plend is a stablecoin lending platform backed by real-world assets (such as invoices). It will enable stablecoin holders to provide liquidity to the pool to support businesses on Comdex, generating returns for stablecoin holders from real-world revenue-generating assets. Plend allows stablecoin holders to seamlessly participate in the $650 billion global trade finance industry. This is a significant leap in connecting traditional finance and DeFi, as stablecoin holders will no longer need to rely on unstable new DeFi protocols to generate asset returns; they will now be able to enter a reliable and profitable industry, as ancient as trade itself.

AUDIT.one is a subsidiary of Persistence.one, providing top-tier validation services for leading PoS networks through highly secure Tier 3 and Tier 4 data centers across multiple geographies and a multi-cloud architecture. AUDIT.one can assist not only Persistence's public chain but also the broader PoS network ecosystem. Currently, AUDIT.one manages over $75 million in assets across nine public chains (Cosmos, Terra, Matic Network, NEAR, IRIS, Kava, Skale, Marlin, and Celo) and also supports PoS services for Polkadot, Tezos, and Ethereum 2.0.

3. Liberating the Liquidity of PoS Tokens

pStake is essentially a liquidity staking product similar to Lido, but its uniqueness lies in its interoperability. While many new chains are preparing to play significant roles in the decentralized revolution, the vast majority of cryptocurrency liquidity and the most attractive DeFi opportunities are currently on the Ethereum network. Native PoS token holders rarely find ways to liberate liquidity from their held assets, and even when they can, there are few opportunities to generate additional yields on chains where many DeFi ecosystems have yet to flourish. pStake addresses both of these issues.

Persistence Stakedrop Staking Data

Taking ATOM as an example, traditionally, once ATOM holders stake their tokens, those ATOM lose liquidity. pStake will allow the issuance of staking tokens (pTokens) on Ethereum, which are 1:1 mapped from these staked assets. By doing this, non-liquid staked ATOM can be converted into liquid ERC20 tokens that can be utilized within Ethereum's vast DeFi ecosystem.

This will enable PoS token stakers to gain additional liquidity. For instance, staked ATOMs can be converted into pATOMs, which can then be used as collateral to borrow other crypto assets (such as stablecoins), which can subsequently be used to participate in their respective DeFi protocols.

Currently, pStake only supports Cosmos (ATOM), but it will gradually expand its support to other major PoS chains.

When ATOM (and other supported PoS tokens) are staked through pStake, a portion of those tokens will be staked through AUDIT.one validators. Therefore, as the staking volume of pStake increases, the staking volume of AUDIT.one will also grow.

4. NFTs Flowing Freely Across Different Chains

Asset Mantle is a framework for NFT markets that not only provides all the necessary conditions to create a single market but also facilitates the creation of interoperable NFTs that can flow between different blockchains. Asset Mantle can support all forms of NFTs, from digital art and collectibles to tokenized tickets.

Unlike other similar NFT trading platforms like OpenSea and SuperRare, Asset Mantle allows the creation of dedicated markets for selecting products from specific sellers or groups of sellers.

While Asset Mantle is also well-suited for creating comprehensive markets, its unique value proposition is that anyone can create their own market. Think of it as "Shopify for NFTs," where entrepreneurs and artists can create their own Shopify-style stores for their specific NFT assets.

Asset Mantle utilizes the interNFT module in the background, allowing NFTs created through Asset Mantle to be interoperable, enabling conversion between ERC-721 and other native NFT standards on different chains; essentially allowing free movement between different blockchains (e.g., from Cosmos to Ethereum).

5. XPRT Token

XPRT, as the platform token of Persistence, has multiple uses, including participating in staking to promote network security and community governance of the Persistence main chain. AscendEX has announced that it will list this token on April 1.

As the platform token of Persistence, the value of XPRT is directly related to the increase in financial activities within the Persistence ecosystem DApps. Essentially, as DApps on Persistence conduct business, fees will flow to the main chain, bringing additional returns to XPRT token holders—directly related to the value processed and exchanged.