The rise of DeFi is considered the most revolutionary event in the crypto industry since Satoshi’s whitepaper first came out in 2009. Designed to create an alternative financial system against all odds (central banks and regulations), DeFi recently crossed the mark of $11 billion in Total Locked Value (TVL).
However, despite the constant all-time highs and a massive increase in popularity, DeFi is still plagued by several issues that preclude its mass adoption. Such issues include lack of adoption due to technical barriers, regulatory barriers, legislative uncertainty, and conceptual hardship for newcomers.
In this sense, Centaur is a yet-to-launch platform that proposes a different approach to DeFi and digital fintech. They plan to build a unique set of solutions upon a hybrid model mixing both centralized and decentralized principles.
Decentralized vs Centralized
So far, it is pretty clear there is a great divide between centralized and decentralized models in the cryptocurrency industry.
Although both sides share a common goal, which is to uplift the usage of cryptocurrencies and their various services, there is a huge gap that divides them regarding how they will achieve this goal. A good analogy to describe the situation would be “on CeFi users have to trust people, while on DeFi they have to trust protocols”.
Centralized finance (a.k.a CeFi) is built around trust between users and the people behind a business. The customer needs to believe that the company will manage his/her funds ethically, executing, and delivering services as required.
Learn more: Decentralized vs Centralized finance in details
Decentralized finance (a.k.a DeFi) is on the opposite landscape, as users trust that tech-based solutions (e.g. smart contracts, computing power, etc.) will function as intended to execute services as required.
CeFi services tend to offer a higher degree of usability, velocity, and flexibility, as they hold the power to handle sensitive information and personal funds. On the other hand, DeFi services offer the great benefits of privacy, censorship-resistance, self-custody of funds, and security.
Nevertheless, none of the models are perfect. In this sense, Centaur wants to use what they call a “Semi-Decentralized” model to reunite the best of the two worlds.
What Is Centaur?
Centaur is an endeavor that proposes a balance between both CeFi and DeFi to create efficient financial services available worldwide. Their theory is that decentralization is based on three aspects, which are decision-making, risk-taking, and record-keeping.
The plan behind Centaur is to blend different approaches to address financial solutions. For instance, a solution could have decentralized decision-making, backed by centralized risk-taking, and so on. This way, the platform intends to leverage on the strengths of the varying degrees of decentralization, without losing the grip on feasible and achievable solutions.
Further Reading: Real Benefits of Decentralized Currency
As the project is built upon a bit of complexity, the implementation will be conducted in three phases. First, the plan is to focus on building the foundation of the ecosystem by creating liquidity pools, which are called “the lifeblood of Centaur ecosystem”. Plus, they intend to develop the testnet and provide an efficient interface.
The second phase will involve the development of the Centaur Chain. It includes the implementation of core functions, such as cross-chain interoperability, oracles, and ecosystem rewards. All these functions will provide the platform with a steady and solid structure for operations.
The last phase includes the development of DApps such as a crypto index fund, domestic and cross-border transfers, and a native ending platform. Centaur wants to bridge CeFi and DeFi by combining all these elements within a functional and sustainable cross-chain ecosystem.
Cross-Chain Interoperability
To achieve a solid path between multiple chains and ensure composability and efficiency, Centaur is building their platform focused on legacy protocols, that are stable and can support multiple contracts.
The Centaur Chain is powered by the Tendermint Core consensus, which is a consensus engine that ensures that the same transactions are recorded on every machine in the same order. The choice was made based on Tendermint’s high throughput, finality, and ease of customization.
Also, Centaur will utilize decentralized oracles to provide cross-chain data feeds using a simplified consensus procedure. These add-ons will contribute to building an inclusive platform, facilitating the onboarding of existing DeFi projects, and creating a more open ecosystem.
Native Token
Centaur’s CNTR will be the native token for the platform. Given that the Centaur Chain is meant to function across different protocols, the token will have equivalent representations in protocols in which Centaur is interoperable (e.g. ERC-20, BEP-2, etc.). Such representations of the token will be backed by CNTR locked directly on the Centaur Chain.
The CNTR token will have three main purposes on the platform:
- Medium of Transfer – Native tokens would be the value carrier within the platform, including gas payments, collateral for staking, rewards for block producing, and data feeds provided by oracles.
- Voting Rights – CNTR holders will have voting power for decision making and governance for all network decisions. It includes the Centaur Chain and underlying DApps, including backbone decisions such as changes in the codebase.
- Fees – CNTR holders will be allowed to use their tokens for Centaur solutions such as to function as collateral and loans or DApp fees.
The token is minted with a fixed supply cap of 6 billion units, with a portion released at the initial launch and the balance to be gradually released through block producing on the main net.
Conclusion
Centaur is a project that aims to establish itself as a full ecosystem bridging DeFi and CeFi. Their purpose is to build a cross-chain platform capable of providing efficient services such as lending markets, asset management, and digital payments.
Empowered by liquidity pools, PoS consensus, decentralized oracles, and centralized resources (e.g. licensing, judicial measures, etc.), the platform aims to establish an innovative model designated as Semi-Decentralized.
Currently, the project is still in the pre-launch phase. A private sale was concluded recently, while the launch of its main net will take place in the first quarter of 2021.