Who is Celsius X? Celsius X is the DeFi Engineering on the Celsius Network. Celsius X believes in a future where the CeFi and the DeFi financial systems co-exist.  And, their mission is to build the infrastructure to bridge the two together.

Why do CeFi and DeFi need to be bridged? DeFi replaces centralized institutions with blockchains and smart contracts to facilitate transactions between parties. It allows anyone in the world with an internet connection to have access to sources like lending, borrowing, trading, and payments.

DeFi is a major technological leap in financial infrastructure. But today, it still has challenges when it comes to adoption.

For instance, when an innovative platform started to launch because it cannot bootstrap liquidity, this is where CeFi, DeFi and high throughout institutions like Celsius are well-positioned to help you to use the benefits of Defi or still have the familiarity of Cefi.

As a first initiative to bridge the two Celsius X has committed to use its multibillion dollar asset to help boot strap DeFi liquidity. To do this, they are booting a token wrapping bridge that would give users the ability to move assets between blockchains and provide cross chain liquidity.

So, how does the cross chain bridge work? The bridge starts by blocking assets on one blockchain and minting an equivalent amount of wrapped tokens on another blockchain.  Using the bridge, wrapped tokens can be redeemed one for one for the underlying asset at any time.

The bridge architecture has several components. It starts by Celsius transferring assets in to a trustless and transparent vault on the native blockchain. For instance, ERC20 tokens are deposited in to an Enzyme vault on the Ethereum blockchain. The enzyme vault was chosen, because it has built in accounting tools with fully transparent on-chain vault management. And, has integrations with white listed decentralized applications. Initially, enzyme vaults will be managed by Celsius, and in the future a community DAO could govern and manage the vault.

A decentralized chain link oracle network is then used to ensure end-to-end transparency and auditability of the bridge. The oracles will constantly monitor the vault balance, and broadcast the data onto a proof-of-reserve smart contract on the target blockchain.  The proof of reserve smart contract provides the on-chain data needed to order the true collateralization of any wrapped token.

The reserve references fees are updated with the new balance data, whenever assets are added or moved in the vault.  Once, assets are locked in the native chain, and the proof of reserve is broadcasted on to the target chain, new wrapped tokens can now be minted on the target chain, using a minting contract.

When the minting contract is executed, it first checks the Chainlink proof-of-reserve contract to ensure enough assets are in the reserve vault.  Only if there are enough reserve assets will the minting contracts create new wrapped tokens. Conversely, burning wrapped tokens are lost in native assets from the reserve vote.  Initially, Celsius will manage the minting and burning of tokens, but in the future, the bridge will allow for decentralized minting and burning. Once minted, wrapped tokens can be used for DeFi deployment or transfer like any other asset on the target chain. Celsius X is already a part of several Defi platforms and it is committed to providing deep liquidity to incubate the wrapped token ecosystem.

CelsiusX is used to mint burn and transfer tokens directly within the Celsius app bridging tokens between polygon an Ethereum or will quickly expand to other blockchains. Unlike other bridges the CelsiusX Network will never charge any fees, because the upkeep cost of operating the bridge can be offset by deployment strategies whitelisted in Enzyme Vault Manager.