Allbridge Hack Update | StakeDAO Integrates LI.FI's Widget | Magic Eden on Ethereum | EigenLayer Testnet & More!
Last Week In The Multi-Chain Ecosystem (03 - 09 April '23)
Welcome to LI.FI’s Cross Chain Insider newsletter. If you want to join this community of cross-chain aficionados learning about bridges, interoperability, and the multi-chain ecosystem, subscribe below.
StakeDAO, an all-in-one non-custodial DeFi dashboard, has integrated LI.FI’s SDK. Users can now bridge and swap their favorite assets across 15+ EVM-compatible chains and Layer-2 in a few clicks without having to leave the StakeDAO platform.
Multichain expanded support for Polygon zkEVM last week and has now announced partnerships with Gelato, KyberNetwork, LI.FI, and QuickSwap to support development on the platform.
3) Allbridge Hack Update — Hacker Returns 1500 BNB 🧐
Allbridge Core liquidity pools were exploited in a hack that lost ~$570K (282,889 BUSD + 290,868 USDT). Here’s an update on the hack:
The root cause of the attack was a logic flaw in the withdraw function.
~$450k out of the $570k stolen has been returned to the team (1500 BNB).
The remaining funds will be considered a white hat bounty to this person.
zkBridge, an interoperability protocol that uses zkSNARKs, is now live on BNB Chain. zkBridge now supports ten chains, including Ethereum, Polygon, Optimism, and Arbitrum.
Stably, a leading Stablecoin-as-a-Service (SCaaS) provider and non-custodial fiat-to-crypto onramp platform, has partnered with LI.FI to simplify cross-chain swaps and widen Stably’s product offerings to users on different chains. This partnership will help Stably offer it’s services – fiat-to-crypto #onramps, OTC desks & listing offerings – to 20+ new ecosystems.
LI.FI, a multi-chain liquidity and data gateway provider, announced that it has raised $17.5M in a Series A round co-led by CoinFund and Superscrypt. LI.FI’s vision is to help traditional finance build on DeFi and plans to use these funds to:
Accelerate product development
Bridge the gap between TradFi & DeFi
Bolster sales & business development
Boost marketing efforts
Multi-Chain Ecosystem Updates
Magic Eden continues its multi-chain expansion with support for Ethereum going live last week. The Ethereum platform is currently an MVP, and the team plans to add more features soon.
The zkSync Era network experienced downtime for 4h 10m on 1st April as the ‘database for the block queue failed, causing block production to halt.’ According to the team, the fix was implemented within 5 minutes, and the network is now back running with improved monitoring measures to prevent such issues in the future.
Avalanche has intro cued Evergreen Subnets, providing a controlled, out-of-the-box development environment for institutions that want to leverage blockchain technology.
Evergreen is ‘a suite of institutional blockchain deployments, customizations, and tooling designed to address company-specific and industry-wide requirements for financial services.’ Learn more about Subnets.
Instadapp Avocado now supports Polygon’s zkEVM chain, making the chain fully compatible with Avocado’s account abstraction features and a unified gas tank. As a result, users can now pay gas fees in $USDC on the chain.
EigenLayer announced the release of the testnet for the first stage of the protocol supporting liquid and native restaking. The current launch of the Stage 1 testnet is built on the Ethereum Goerli network and is aimed towards onboarding shakers into restocking on EigenLayer.
How to Take Your Token Multi-Chain
These days, we’ve become accustomed to seeing assets traded on multiple blockchains; after all, the future is multi-chain, innit? But have you ever wondered if you were a project owner, what would your options be to take your token multi-chain?
If, unlike us, you have a life outside crypto, the answer to that question is most likely ‘NO’. Our answer is a resounding yes, soooo…
Here we are again, trying to answer another burning question in crypto right now – how can a project take their token multi-chain?
To do so, let’s sneak into a Telegram chat between a Project Owner (let’s call him P, coz we like P and there’s a reason behind it that we won’t get into today) and your regular crypto BD guy (let's call this person Kram, coz he's the reason we’re writing this today).
Project Owner, P: Hey, I've been thinking about taking my token multi-chain to reach a wider audience and increase its utility. Can you give me an overview of the different options for making my token available on multiple blockchains?
BD guy, Kram: Absolutely! There are three primary options when taking your token multi-chain: native assets, wrapped assets, and omnichain token standards. I'll briefly explain each option and their pros and cons.
1. Native assets: This is the initial stage, where your token exists solely on its native blockchain. The limitation here is that your token can't be used or traded on other blockchains, resulting in limited liquidity, interoperability, and functionality.
Let me explain with the help of an example:
Imagine you're an art collector with a valuable painting. Your painting (the native token) can only be displayed in a specific gallery (the blockchain).
This limitation of the painting being confined to one gallery is similar to how native tokens like ETH, MATIC, and SOL can only exist on their respective native blockchains.
You want to be able to display your painting in multiple galleries to reach a larger audience and enhance its value.
To overcome this limitation, let’s look at our next option: wrapped assets.
2. Wrapped assets: Wrapped tokens are a more advanced solution where your token is pegged 1:1 to its native counterpart, allowing it to exist on other blockchains. This is achieved by locking the native token in a smart contract on the original blockchain and issuing a wrapped version on the target blockchain.
However, wrapped tokens have drawbacks:
Each wrapped version is specific to the target blockchain, requiring multiple wrapped tokens for each blockchain you want to support.
Swapping between wrapped versions of a token can be cumbersome and may involve extra fees.
Users must trust the custodians or smart contracts that hold the native tokens.
Going back to our art collector and painting analogy, think of it like creating replicas of your painting to display in other galleries, but each replica is confined to the gallery it was created for because of licensing deals you’ve signed with each gallery (pain).
So, yet again, while we’ve solved the problem of taking a token to different chains, we’ve created several problems like double wrapping, low liquidity of wrapped assets, non-fungibility between different wrapped versions of the same asset, to list a few.
So, wut do?
We need a more advanced solution, and that’s where omnichain token standards come into the picture.
3. Omnichain tokens: This is the most relevant when it comes to the multi-chain reality of crypto and the most advanced option. It allows your token to become chain-agnostic and move freely between various blockchains, retaining its value and functionality regardless of where it's used.
Some benefits include:
Increased interoperability between different blockchains.
Simplified and more efficient token swaps or migrations.
Avoiding the need to trust centralized custodians or multiple smart contracts.
Going back to the painting analogy, omnichain tokens can be considered high-quality, universally adaptable replicas that can be displayed in any gallery without losing their value or uniqueness, as they are all interchangeable.
Native tokens → mint on one chain
Wrapped tokens → lock and mint on many chains
Omnichain tokens → burn and mint on any chain
P: That sounds perfect! Thanks for the detailed explanation. I think omnichain tokens are the way to go for my project, as it offers the most seamless and advanced solution for taking your token multi-chain. Let's explore the next steps to get started with the implementation.
Kram: I would definitely recommend the omnichain tokens approach as well and there are multiple options that you can choose from.
The way it currently works is that you can create a multi-chain token for your project by leveraging one of the many messaging protocols (AMBs) out there, all of which have their own omnichain token standards, including:
LayerZero’s Omnichain Fungible Tokens (OFTs)
Hyperlane’s Warp Routes
Axelar’s Interchain Token Standard
We must understand here that while using one of these AMBs will allow you to mint the token on any chain they support, it will also tie your token down to the security characteristics of the AMB itself.
You can read in detail about the security features and trust assumptions made by these AMBs here.
But this might be a little too overwhelming, so before our next conversation, I will share an article that briefly summarizes each AMB’s token standards and the trust assumptions baked into it, making it easier for you to choose one for your project.
P: That would be fantastic! You’re the real MVP Kram
Alright, folks, it's a wrap on that super cool chat between our project owner, P, and the crypto whiz Kram! So, what's the takeaway from their convo?
As we've seen, omnichain token standards offer numerous benefits, but with multiple messaging protocols (AMBs) and their respective omnichain token standards available, projects have a range of choices.
However, it's essential to consider each AMB's security characteristics and trust assumptions before making a decision. As Kram mentioned, there is a plethora of information available on the topic, which can be overwhelming for those new to the space. That's why we're here to help!
Stay tuned as we continue to research this topic and come back with a summary that will help you answer the burning question in crypto right now – "How do I take my token multi-chain?" In the meantime, feel free to explore the resources mentioned in the conversation and deepen your understanding of the multi-chain ecosystem.
See you next week!
1) On Bridge Security
2) The Middleware Thesis
3) Why EVM is the Kingmaker of Chains in Crypto
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