One-click asset cross-chain experience: Detailed explanation of Conflux ShuttleFlow protocol

In 2019, DeFi open finance (hereinafter referred to as DeFi) has attracted the attention of a large number of investors due to its more open and transparent and more efficient capital liquidity and more attractive deposit and loan interest rates than traditional finance, and has become a digital currency application. The most watched track.

As investors cross-chain assets to the Ethereum network to participate in the DeFi ecosystem, various DeFi products have also been launched one after another. As of the end of 2019, the total value locked in the DeFi ecosystem on Ethereum had increased to $651.6 million. Thanks to the vigorous development of well-known DeFi platforms such as MakerDao and Compound, Ethereum is giving birth to a new prototype of a digital financial system.

At the same time, since most DeFi applications are currently built on Ethereum, the development of DeFi is also limited by the limited assets and low performance on Ethereum, making it impossible to apply on a large scale.

In March 2020, a series of black swan events caused mainstream digital currencies such as Bitcoin and Ethereum to plummet. The DeFi ecosystem on Ethereum triggered a series of paradoxical events due to the performance bottleneck of Ethereum, which greatly frustrated the already weak DeFi market. with questioning. This accident has accelerated the demand of community users for high-performance underlying facilities.

In addition, the lack of high-quality assets has also become a bottleneck for the development of DeFi.

As we all know, BTC is the digital currency asset with the largest market value. At present, Bitcoin has a market value of more than 100 billion US dollars, which is about 8 times the market value of Ethereum. In order to further introduce the flow of Bitcoin to expand the ecology, applications on Ethereum can only conduct cross-chain transactions through mainstream currencies such as Bitcoin, and introduce assets from other public chains into the ecology of Ethereum in the form of tokenization . However, most of the cross-chain assets on Ethereum are plagued by problems such as mixed issuers and extremely limited issuance scale under a single endorsement. This will not only limit the growth rate of DeFi, but also make DeFi face life-and-death flows in extreme cases. sexual crisis.

In order to promote the development of the DeFi ecosystem, the Conflux technical team has developed an asset cross-chain protocol called "ShuttleFlow", which will provide users with a safer, more efficient, and more convenient asset cross-chain bridge. Shuttle, which means shuttle, and Flow, which means flowing water, entrusts the beautiful vision of allowing cross-chain assets to flow freely between various public chains through Conflux's asset cross-chain bridge.

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Existing cross-chain solutions

Since public chains such as Bitcoin and Ethereum are independent of each other, the assets on the chain cannot be directly circulated for matching transactions. There are mainly two existing solutions, namely cross-chain atomic swap and cross-chain atomic mapping.

The cross-chain atomic swap is executed through a hash time-locked contract, and the transaction party must complete the transaction within the specified time and provide the transaction private key. Although this transaction method is safe, it requires both parties to be online at the same time, which takes a long time to confirm and is not friendly enough for ordinary small transactions.

Conflux ShuttleFlow will choose cross-chain atomic mapping to complete cross-chain asset mapping.

Conflux ShuttleFlow will join hands with important participants in the Conflux ecosystem, including well-known wallets, custodians, and decentralized trading platforms, to form a cross-chain asset custody alliance (hereinafter referred to as the "alliance"), with 2/3 multi-signature Complete the cross-chain asset mapping, which constitutes the first-level issuance and acceptance of cross-chain assets on Conflux.

Taking BTC as an example, the user transfers BTC to the designated BTC receiving wallet of the user. After the alliance automatically monitors the minting request, it issues 1:1 BTC-anchored cBTC on Conflux in the form of multi-signature, providing minting and Acceptance service, minting cBTC to the specified Conflux wallet address for the user at the same time.

The specific solution is as follows:

Create a multi-signature account on Bitcoin to lock the BTC required to mint cBTC. On Conflux, deploy a smart contract to manage and record the minting and acceptance of cBTC. Both the multi-signature BTC account and the cBTC smart contract are jointly managed by members of the aforementioned alliance. Each member runs a federation node. This node is responsible for monitoring and verifying the events on the Bitcoin and Conflux chains, and submitting the corresponding transaction operations after the event occurs.

- Alliance multi-signature minting acceptance process:

1. Bitcoin account A of a consortium member submits a transaction on Bitcoin to the consortium’s multi-signature BTC account, and submits a minting request of "minting x cBTC to Conflux account B". In this transaction, A needs to actually deposit x BTC Go to the multi-signature BTC account. Among them, the information of Conflux account B will be stored in the op_return of the Bitcoin transaction (the upper limit is 83 bytes).

2. The alliance node monitors the minting request in the multi-signature account on Bitcoin.

3. After the alliance node listens to the request, it verifies the request:

3.1. Wait for the corresponding transaction to be confirmed on Bitcoin to reach finality, and x BTC will be confirmed in the account.

3.2. Check that the target account address B stated in op_return is a legal address. If the address is illegal, you can apply for a refund. After the alliance signs, the original route will return x BTC to A; or apply for an update address. If the new address is legal, press The normal joint signing process continues.

4. If the minting request is verified to be correct, the alliance node signs the minting operation "minting x cBTC to Conflux account B" on Conflux and broadcasts it to other alliance nodes.

5. Each alliance node collects signatures independently:

5.1. When a coalition node receives more than 2/3 of the nodes' signatures for the operation, it submits the operation and the received signature to the cBTC smart contract on Conflux to perform the minting operation. Repeated submissions are ignored.

5.2. After the contract executes the minting operation, x cBTC will be automatically issued to Conflux account B.

1. The Conflux account B of a consortium member submits a transaction to the cBTC smart contract, and puts forward an acceptance request "accept x BTC to Bitcoin account A". In this transaction, B needs to actually transfer x cBTC to the smart contract. The x cBTC will be destroyed directly. Among them, the information of Bitcoin account A is specified in the request parameters.

2. The alliance node monitors the acceptance request in the cBTC contract on Conflux.

3. After the alliance node listens to the request, it waits for the corresponding transaction to be confirmed on Conflux to reach finality, and x cBTCs are confirmed to be destroyed.

4. If the acceptance request is verified to be correct, the alliance node will sign the acceptance operation "accept x BTC to Bitcoin account A" on Bitcoin and broadcast it to other alliance nodes.

5. Each alliance node collects signatures independently:

5.2. After the multi-signature account performs the acceptance operation, x BTC will be automatically accepted to Bitcoin account A.

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One-click asset cross-chain experience adapts to multiple application scenarios

Users' needs for cross-chain assets are generally linked to scenarios, such as DEX transaction scenarios and Lending lending scenarios, which require users to cross-chain assets first, and then recharge assets to the corresponding scenarios for use. This process requires users to understand the existence of intermediate assets, such as wBTC, etc., with a high cognitive threshold and a long operation path.

Take the application scenario of using the DEX decentralized exchange on the Conflux chain as an example. If users want to use the decentralized exchange on the Conflux chain, they do not need to go through multiple complicated steps such as transferring from the centralized exchange to the wallet on the Conflux chain, and then authorized by the wallet and transferring to the decentralized exchange. You only need to obtain a custom receiving address from the DEX application, and withdraw coins directly from the centralized exchange/wallet on other chains to this address, and you can immediately receive and multi-sign coins in the DEX account, realizing one-click asset transfer chain, and supports direct transactions. In the process of users' one-click recharge, the cross-chain alliance has completed the behavior of multi-sig coin minting to the user's DEX account, allowing users to enjoy high security while having an experience no less than that of a centralized exchange.

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Hot and cold wallet system - lock for asset security

In order to further ensure the security of assets, the alliance custody wallet will be divided into two management modes: cold wallet and hot wallet, and double lock for asset security. ShuttleFlow will set upper and lower bounds for the alliance's multi-sig minting and acceptance amounts: the upper bound is checked once a day, and if the assets in the hot wallet are higher than the upper bound, the excess will be automatically transferred to a safer cold wallet for safekeeping ; Check the lower bound in real time. If the assets in the hot wallet are lower than the lower bound, alliance members will be reminded to initiate multi-signature transfers to transfer part of the assets in the cold wallet to the hot wallet.

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ShuttleFlow Alliance Governance Model

Each alliance member in the ShuttleFlow alliance ecosystem will independently maintain a joint signature node and keep the multi-signature authorization private key by itself. Conflux strives to achieve efficient governance of the alliance ecology through the following methods:

Targeted invitation system: Alliance members will be determined in the form of a targeted invitation system, mainly high-reputation partners who are strongly bound to the Conflux DeFi ecosystem, with a maximum of 11 people. In order to allow the ecology to grow rapidly, the Conflux Foundation will provide option rewards to members who join the alliance early.

Governance in the stable stage: With the maturity of the ecological development, after the business of the cross-chain alliance is stable, the cross-chain alliance will build a legal Cross Chain Alliance DAO, and the DAO will govern the ShuttleFlow alliance ecology. After the members of the alliance are autonomous, they can coordinate and develop resources by themselves, and even make decisions on how to control risks, etc., and will benefit from ecological services.

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ShuttleFlow Development Plan

ShuttleFlow is an important part of the development of the DeFi ecosystem on the Conflux network, and it is also the asset inflow portal of the entire DeFi ecosystem. The Conflux network and ecology will start the first phase of the process in mid-to-late April. The first decentralized trading application developed based on the Conflux decentralized exchange protocol BoomFlow will start trial operation after the first phase of the Conflux network is launched. ShuttleFlow will be launched together with the DEX based on the Conflux BoomFlow protocol.

At present, ShuttleFlow V1.0 has been developed and is being audited, and it is planned to open source after the audit. After that, we will continue to develop ShuttleFlow V2.0 and support more public chains and asset protocols on them.

There is no doubt that the cross-chain assets supported on ShuttleFlow have a wide range of application scenarios. These cross-chain assets can not only directly enter the DEX and other DeFi products on the Conflux chain as high-quality liquid assets, but will also support more in the next plan. The public chain supports the cross-chain operation of assets on multiple public chains and becomes a general cross-chain asset. The ecological blueprint of DeFi on the Conflux network is not limited to relying on the development of the Conflux network, but hopes to expand to decentralized trading platforms on multiple public chains to enhance the flow of digital assets in the entire blockchain world while ensuring asset security sex.