Converge is a new Ethereum rollup developed by Ethena Labs and Securitize to revolutionize real-world asset tokenization with ultra-fast transactions and stable fees, and seeks to drive institutional adoption in DeFi.
This innovative Layer 2 solution, built on Arbitrum technology and Celestia's data layer, is designed to facilitate the efficient tokenization and management of real-world assets (RWAs), such as real estate, bonds, and stablecoins, within the DeFi universe.
Converge stands out for its exceptional speed, with initial block times of 100 milliseconds, and for his fee system based on two stablecoins, USDe, and USDtb, ensuring predictable and low costs and providing a significant advantage in accelerating institutional adoption. Additionally, more than $7.000 billion in tokenized assets will be migrated to this network, boosting liquidity and interoperability between traditional and decentralized finance.
TRADE ETHEREUM ON BIT2MEAccording to Ethena, Converge also includes a robust ecosystem with support for multiple programming languages and a network of validators that will ensure security and governance. For all these reasons, the new rollup is emerging as a fundamental bridge for institutions to issue and manage tokenized financial products, marking a turning point in the convergence between TradFi and DeFi.
What is Converge and how does it work?
Converge is a high-throughput Ethereum rollup launched this week with the mission of transforming the blockchain infrastructure for real-world tokenized assets. Unlike conventional rollups, Converge focuses on supporting real-world tokenized assets, integrating both permissionless DeFi applications and institutional-only environments. This versatility allows it to adapt to both open decentralized ecosystems and those requiring restrictions and compliance, marking a significant technological advancement.
Converge's operation is based on the implementation of a modern and powerful technology stack. It utilizes the modular data availability layer provided by Celestia, which ensures fast and reliable data processing. Additionally, Converge is compatible with the Ethereum Virtual Machine (EVM), facilitating the execution of smart contracts written in multiple languages such as Solidity, Rust, C, and C++ thanks to the Stylus update, expanding the range of scalable and efficient application development. The developers also stated that Converge will feature interoperability across networks such as LayerZero and Wormhole, as well as support for blockchain oracles such as RedStone and Pyth.
BUY CELESTIA ON BIT2METransactions on Converge execute at impressive speeds, with blocks initially generated every 100 milliseconds and plans to reduce this time to just 50 milliseconds. This ultra-fast capacity allows the network to handle a high volume of transactions, crucial for real-world assets where speed and security are paramount. Furthermore, to maintain the integrity and security of the system, validators operate with a mechanism called SENA, which hardens the network against potential attacks and failures.
Finally, a key feature of Converge is its stablecoin gas payment model, specifically USDe and USDtb. This approach not only provides fee stability, avoiding the volatility typical of gas paid in ETH, but also facilitates institutional adoption by offering a familiar and reliable means of managing transaction costs.
Overall, Converge's innovative design enables traditional assets, totaling billions of dollars under management by Ethena Labs and Securitize, to be settled and traded more fluidly and efficiently on the blockchain, empowering tokenization and participation in global financial markets.
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A solution to integrate TradFi and DeFi
Since its inception, one of the major challenges to the mass adoption of blockchain has been the separation between traditional finance (TradFi) and decentralized finance (DeFi). Converge emerges as a disruptive solution that breaks down these barriers, offering a hybrid environment where the two can coexist and complement each other.
Ethena Labs and Securitize they stressed that Converge supports permissionless DeFi applications, which means any user can freely interact with its protocols and smart contracts without permission. This feature drives innovation and accessibility, essential pillars of decentralization. On the other hand, also offers permissioned environments, designed for institutional entities that require certain regulatory and access controls. It is therefore a solution that enables banks, investment funds, and other traditional players to actively participate in blockchain asset tokenization and management without sacrificing regulatory compliance.
TRADE WITH STABLECOINSCarlos Domingo, co-founder and CEO of Securitize, commented that Institutions have been watching with interest the evolution of the DeFi ecosystem, but the lack of regulatory clarity and institutional-grade infrastructure has been hindering its participation in the sector. Therefore, through Converge, it hopes to consolidate TradFi and DeFi on the same infrastructure to facilitate the creation of more sophisticated and accessible financial products for both retailers and institutions.
In short, Converge presents itself as an inclusive and robust infrastructure, capable of accelerating the adoption of tokenized assets in global markets, democratizing access and fostering a more efficient and secure economy.
Arbitrum and Celestia technologies are integrated into Converge
Converge's construction would not be possible without the integration of two key technologies into the blockchain ecosystem: Arbitrum and Celestia. Arbitrum, recognized as one of Ethereum's leading Layer 2 protocols, provides the scalability and security necessary for Converge to operate with high standards of performance and reliability.
Specifically, Converge is a rollup based on Arbitrum's architecture to run smart contracts with full compatibility with the Ethereum Virtual Machine (EVM). This ensures that developers can migrate or create new applications without altering their logic or losing familiarity with existing tools. Additionally, Converge development takes advantage of Arbitrum updates that allow for the use of a variety of programming languages, expanding the ecosystem and expanding the complexity that DApps can achieve.
BUY ETHEREUM (ETH) ON BIT2MEOn the other hand, efficient data availability and management are essential for a rollup focused on real assets. This is where Celestia comes in with its modular data availability layer. Celestia enables Converge to manage data availability off the main chain in a decentralized, secure, and fast manner. This modular separation improves processing speed, reduces costs, and avoids bottlenecks on the main network.
The combination of Arbitrum as the execution layer and Celestia as the data layer creates a robust technological ecosystem that boosts scalability and efficiency, and is especially useful for the tokenization of real-world assets, where the amount of data and the need for rapid settlement require advanced and flexible solutions.
Together, these technologies enable Converge to set a new standard for rollups on Ethereum, paving the way for deep institutional adoption and driving the development of a more innovative, transparent, and accessible global financial market.
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