LI.FI x DeCommas Cross-Chain Swap | Across Protocol Roadmap | Instadapp Avocado & More!
Last Week In The Multi-Chain Ecosystem (06 - 12 March '23)
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Bridge Updates
1) Across Protocol Roadmap Released 💪
Across Protocol has released its roadmap, “a guide to the next era of cross-chain interoperability”, outlining the vision for the project’s development in the near future.
TLDR: Across will continue to focus on building tech that enables value to be transferred across chains in a capital-efficient manner. Additionally, Across will add offerings like Universal Bridge Adaptor, Composable Bridging, Predictive Rebalancing, and Capital Recycling to their stack. Read more.
Note: you can find a detailed breakdown of Across’ Roadmap later in the newsletter’s What’s Popping section!
2) DeCommas x LI.FI Cross-Chain Swap 🦎
DeCommas launched a cross-chain Pathfinder powered by LI.FI’s SDK. Pathfinder is a tool that helps users navigate DeFi seamlessly by abstracting its complexity — users can execute complex actions across multiple chains, like bridging, swapping, lending, and borrowing, within one simple interface.
Learn more about Pathfinder and try it out here.
WooFi has extended its cross-chain offering (powered by Stargate) by adding support for Ethereum. Users can now swap major assets from 6 chains into ETH, WOO, and USDC on Ethereum (and vice versa).
WooFi has also added features like sending funds to a different recipient address on the destination chain and getting a small amount of the destination chain’s native token as gas.
4) [TEMP CHECK] - Whitelist Hashflow Wormhole For V3 Portals 🧐
There’s an ongoing temperature check in the Aave community to whitelist Wormhole and Hasfhlow for V3 Portals. If the proposal is successful, a custom protocol built using Womrhole’s message-passing capabilities and Hasfhlow’s cross-chain DEX will be integrated into Portals.
5) Proposal to Integrate LI.FI on Kromatika dApp Passed 👏
The Kromatika DAO has exercised its voting rights to push the proposal for integrating LI.FI in the Kromatika dApp. Learn more about the proposal here.
Multi-Chain Ecosystem Updates
1) Ethereum Attestation Service Live on Ethereum 🔥
Ethereum Attestation Service (EAS), an infrastructure protocol and public good for making attestations on or off-chain about anything, is now live on Mainnet. EAS provides a standardized and open way to make attestations on or off-chain, acting as a bridge between Ethereum and an external source of trust to verify transactions in a decentralized way.
Compound V3 is now live on Polygon. Users can now use WETH, WBTC, and MATIC as collateral to borrow USDC, with market-leading efficiency.
Trade Joe is now live on BNB Chain. Users can now access Trader Joe’s liquidity book supporting BUSD, USDT, USDC, BNB, BTC.b, ETH, JOE, and CAKE on BNB Chain.
4) Temperature Check: Deploy Uniswap V3 on Kava 🦄
The Uniswap community is running a temperature check to deploy V3 on Kava. If the proposal is approved, Kava Labs plans to allocate at least $3M to Uniswap pools over the next three years.
5) Instadapp Launches Avocado 🥑
Instadapp launches Avocado, a next-gen smart account wallet. Avocado is like a blockchain aggregator, which makes interacting with dApps seamless through its unified interface. It offers network, gas, and account abstraction features, enabling use cases like transaction batching, cross-chain swaps, unified gas payments, etc.
What’s Popping?
Breaking Down Across Protocol’s Roadmap & Understanding Its Vision from First Principles
Across Protocol, one of the most widely used token bridges connecting Ethereum L1 <> L2s, recently released its roadmap. In its roadmap article, Across emphasizes doing “more with less”. Along the same lines, here’s a simplified breakdown of their comprehensive roadmap, aiming to understand Across’s vision and future plans from first principles.
Let’s dive in!
What is Across? A look back.
Across is one of the most widely used token bridges connecting Ethereum <> L2s. It offers low-cost, fast, and optimistically validated bridging leveraging UMA’s Oracle.
Stats – Over $1.5B in volume across 5 supported chains in 1.5 years.
Focus – Maximizing capital-efficient token bridging by unifying liquidity and absorbing finality risk.
Across’ Vision – A look ahead.
Across wants to continue offering the best cross-chain tech to move tokens across chains efficiently. To do so, Across will be focusing on the following:
Expanding support to multiple EVM chains through the Universal Bridging Adapter (UBA).
Similar to Connext and Hop, Across believes in canonical bridge maximalism – they leverage canonical bridges (aka native bridges) to pass messages or send tokens across chains for rebalancing its liquidity pool. However, this restricts them from expanding to chains that don’t have a canonical bridge (Across supports Ethereum, Arbitrum, Optimism, and Polygon at the moment). Thus, to expand to multiple EVM chains without compromising security, Across is launching The Universal Bridging Adapter (UBA).
What’s UBA? Brace yourselves because it has all the right keywords ;)
The Universal Bridging Adapter (UBA) enables Across to connect to any EVM bridge using zk messaging by Succinct and optimistic verification by UMA.
Let’s look at each component here:
Zk messaging — To send messages from Ethereum to any EVM Chain, Across has partnered with Succinct, a project seeking to bring trust-minimized interoperability to Ethereum with proof of consensus (using zero-knowledge proofs). Together, the teams are building zk-powered tech that allows unidirectional message passing from Ethereum to any EVM chain.
Optimistic verification — Across is powered by UMA’s Optimistic Oracle. The Optimistic Oracle is used to resolve disputes on Across — meaning that it is in charge of deciding whether or not the details posted by a Relayer about the transaction coming from an L2 to L1 is correct.
The Optimistic Oracle allows any Relayer to dispute invalid transaction details reported by another Relayer. Once disputed, the Optimistic Oracle funnels the data through a data verification system that relies upon UMA token holders to settle disputes. Any Relayer that successfully disputes transaction details of another Relayer may then claim the original Relayer’s bond.
Dynamic pricing — Currently, Across uses canonical bridges to rebalance its pools. To overcome this hurdle for chains without canonical bridges, Across is developing a novel pricing mechanism that rewards or penalizes bridging flows to particular chains based on the current state of the pools at a specific time. For instance, if Across’ pool on Polygon is running low on liquidity, users bridging to Polygon will be rewarded for essentially re-filling liquidity on that pool. Similarly, users who bridge away from Polygon at that time will be penalized for draining the pool further.
Enabling messaging + token bridging in the same transaction via Composable Bridging.
Bridging tokens from one chain to another is great, but it’s only the beginning of what’s possible with bridges. The ability to send a message along with tokens across chains in the same transaction makes it possible to execute more complex cross-chain flows and opens up new possibilities, and that’s exactly what Across aims to unlock: allowing users to bundle instructions for what to do with the tokens once they are bridged.
This is essentially the functionality offered by arbitrary messaging bridges (AMBs), but Across argues unlike AMBs, messages sent via this approach don’t have the economic security issues associated with an unbounded value of messages since the message is only as valuable as the funds being bridged in that specific transaction and not all the funds moving through the system at any given time.
Adding the cherry on top with capital recycling.
TLDR: The capital efficiency maxis have an innovative solution to increase the protocol's efficiency further while maintaining trust-minimization.
Across’ current approach for bridging tokens essentially involves Relayers providing upfront capital for user transfers which the LP reimburses after UMA’s optimistic oracle verifies the transaction's validity. As the optimistic verification process is permissionless, i.e., anyone can propose and dispute proofs, the current repayment cycle takes 3 hours (2 hours challenge period + ~1 hour for repayments to settle). This repayment cycle is relatively long and creates an inefficiency in the system where Relayer capital is not to be utilized for approx. 3 hours, also to a cap on the maximum fast transfer throughput of the bridge.
Thus, to overcome this inefficiency, Across is introducing a concept called Capital Recycling, which will allow the DAO to elect Proposers responsible for submitting valid relay proofs. This will significantly reduce the challenge period, allowing Relayers to recycle their capital almost continuously and increasing the capital efficiency of the protocol.
Current Vs. New Approach
With the current approach, the relayers had to provide upfront capital for user transfers and wait for reimbursement from the LP. This resulted in inefficient use of capital and limited the maximum fast transfer throughput of the bridge. However, with the new Capital Recycling approach, the relayers can recycle their capital almost continuously, allowing for much more efficient use and higher transfer throughput.
This improved capital efficiency does have its trade-offs (and kudos to the Across team for pointing this out themselves) – The change to a permissioned proposer opens up the risk of censorship, but Across believes that this risk can be mitigated by the DAO replacing the Proposer if it suspects censoring behaviour. However, it’s important to point out that this is an assumption made on Across’ part that the DAO can effectively and timely replace a Proposer in such a manner.
More capital efficiency through predictive rebalancing.
As a protocol with a hub and spoke model, Across can rebalance its pools itself via canonical bridges. However, canonical bridges lock capital for 7 days making the capital unavailable for that period. To overcome this locking issue, Across is introducing the concept of predictive rebalancing.
Predictive rebalancing of pools uses historical data to predict how much money will need to be moved between pools and sets a target threshold. This allows Across to selectively not rebalance certain pools (based on historical user flows), given the high probability of the pool rebalancing on its own in the future. As a result, it makes the protocol more capital efficient since the capital doesn’t need to be locked in for 7 days and instead can be used for fulfilling existing transactions.
In addition to platform-level improvements, Across is also making overall improvements to the protocol by offering:
Optimistic governance and community – integrating decentralized governance via oSnap which empowers the DAO to execute the results of Snapshot votes on-chain independently.
Community and growth initiatives – using community NFTs to incentivize deeper ACX liquidity and improving the bridging user experience by working on brand and UI enhancements.
Closing Thoughts
This guy said it best :)
Across Protocol deserves praise for its innovative approach to developing its platform. Rather than simply building another messaging bridge, the team has taken a unique approach to address the challenges of the cross-chain ecosystem. We’re excited to support Across in their journey.
Interesting Reads
1) Revisiting Aggregation Theory: Moats in the Age of Token Warfare
2) The Messaging Bridge Stack
3) Modular Interoperability Protocols
4) Bridging and Finality: Ethereum
5) Breaking Down Router Chain's Whitepaper
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