Talking about the evolution of cross-chain bridge: from asset cross-chain to application cross-chain
Original title: "New Generation Cross-Chain Bridge: Not Just Asset Cross-Chain, Focus on DApp Cross-Chain Interaction"
Written by: Tangyuan
After the public chain war, the market has formed a pattern of multi-chain coexistence led by Ethereum. Asset transfer between chains and cross-chain interaction of smart contracts have become daily activities on the chain. As a way to realize information exchange between blockchains The underlying infrastructure and cross-chain tools have also become popular products, which are not only needed by users, but also favored by capital.
At the beginning of March, the cross-chain application Swim Protocol announced the completion of a $4 million seed round of financing; at the end of March, the cross-chain infrastructure LayerZero completed a $135 million A+ round of financing, led by well-known venture capital institutions FTX Ventures, Sequoia Capital and a16z jointly led the investment, and Coinbase Ventures, PayPal Ventures and others participated in the investment.
At present, the common cross-chain tools on the market mainly focus on solving asset cross-chain, but in fact, the transmission between blockchains not only includes assets, but also includes contract calls, data and state interactions of smart contracts, etc.
There are three main ways to cross-chain assets, including centralized exchanges (CEX), decentralized cross-chain bridges and multi-chain aggregators.
It is easier to understand the cross-chain transfer of assets through a centralized exchange (CEX). Users can first recharge the assets of the A chain into the CEX, convert (transact) them into the assets required by the B chain, and then recharge to the B chain. This is a good choice for novice users, but this method needs to pay special attention to the address format when recharging to avoid charging the wrong chain format. In addition, CEX also needs to support a certain chain. In terms of cost, in addition to the gas fee on the chain , and there is an additional transaction fee in CEX.
For users who are accustomed to operations on the chain, cross-chain bridges and multi-chain aggregators are the first choice for cross-chain assets.
"Cross-chain bridge" is currently the most popular tool. It is a chain-to-chain bridge that allows users to transfer encrypted assets from one chain to another. When crossing chains, assets are usually realized in the form of "mapped assets", which need to go through a series of processes such as "locking + casting + redemption + destruction".
For example, if the user wants to cross-chain the asset AToken on the A chain to the B chain, the process is generally by locking the corresponding AToken on the smart contract of the A chain, and the smart contract on the B chain is notified by the oracle machine, waiting for miners to verify Afterwards, after the number of ATokens locked on the B chain, they will be minted into BTokens at 1:1; when the assets return from the B chain to the A chain, the BTokens on the B chain will be destroyed to release the originally locked ATokens for the user.
It should be noted that when asset A in this "1-to-1 cross-chain bridge" mode crosses from the source chain to the target chain, the resulting asset is not the original A asset, but the mapped packaging asset. The wrapped assets held by users may become worthless when there is a problem with the cross-chain bridge.
In addition to the cross-chain bridge, another asset cross-chain tool is the "multi-chain aggregator", which gathers the liquidity of assets on different chains and builds a transaction pool for cross-chain assets. Users can complete the A chain in the pool The process of exchanging the X asset on the B chain into the X asset on the B chain.
Although there are already good products in the cross-chain field, developers are still exploring new products, hoping to improve the existing problems of the current cross-chain bridge and simplify the cross-chain operation process. Such as the LayerZero tool, which supports native assets directly cross-chain and supports data transmission, which can realize the combination of DeFi applications between different chains. The new anyCall tool launched by the cross-chain leader Multichain supports smart contract calls between different chains. This issue of DeFi Honeycomb will take stock of such further innovative cross-chain products.
Introduction
Introduction
Multichain (MULT), formerly known as AnySwap (ANY), is an infrastructure developed for cross-chain interaction of any information on the chain. It supports users to transfer Token assets, NFT assets and data interactions between any two chains, trying to become a Web3. The "multi-chain router" of the 0 era allows users to freely transfer various Tokens between multiple chains.
On July 20, 2020, Multichain was first constructed in the form of AnySwap to meet the needs of intercommunication between different blockchains.
mechanism
mechanism
Before the name change, Multichain was mainly available in two versions, AnySwap V2 and AnySwapV3.
In the AnySwapV2 version, the main product for cross-chain implementation is "1-to-1 cross-chain bridge", which adopts the "minting + destruction" model.
Specifically, on the asset source chain, the user deposits the assets to be cross-chained into the source chain smart contract and locks them, and then uses the smart contract on the target chain to cast the source chain assets 1:1. Encapsulate the asset "AnyToken", such as AnyUSDC, and send it to the user's cross-chain target chain wallet. This is similar to the ERC-20 format packaging asset WBTC after cross-chaining BTC to Ethereum. When the user redeems the encapsulated asset from the target chain, the smart contract will destroy the encapsulated asset AnyToken on the target chain 1:1, and release the original asset locked on the source chain to the user.
In the upgraded AnySwapV3 version, asset cross-chain is completed through the "many-to-many model". This product deploys a "liquidity fund pool" on multiple chains to help users complete direct asset cross-chain.
Take USDC as an example. This USD stablecoin is issued on multiple blockchains such as Ethereum, Binance Smart Chain, and Avalanche Protocol. It is enough to directly use the liquidity pool, that is, add USDC tokens to the liquidity pool on each chain deployed by AnySwap. When users need assets across chains, USDC in these liquidity pools can directly complete cross-chain transfers.
For example, Asset A is issued on Binance Smart Chain and Ethereum Chain, but the formats are BEP-20 and ERC-20 respectively. Then in the AnySwap V3 version, when the user who holds the BEP-20 version of asset A wants to cross-chain it from the Binance Smart Chain to the Ethereum chain, as long as there is sufficient funds in the fund pool deployed on the Ethereum The A asset reserve, the user can directly exchange for the A asset of the ERC-20 version. What users get across the chain is the original A asset, not the encapsulated asset.
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Multichain product page map
When users use Multichain to cross-chain assets, ideally, each chain has a sufficient fund pool of cross-chain assets. No matter how many assets the user transfers, the fund pool has enough assets for use. However, when a huge amount of assets cross-chain, the liquidity pool will also be insufficient. At this time, the user will receive a part of the encapsulated asset "AnyToken", indicating that there is not enough assets in the target chain fund pool to withdraw.
For example, Xiao Ming has 1 million X assets and wants to cross-chain from A chain to B chain, but at this time, Multichain only has 900,000 X in the X fund pool of B chain. At this time, Xiao Ming will be in the wallet of B chain After receiving 900,000 X assets, 100,000 packaged AnyX tokens will also be received, representing the amount of X assets that have not been received. Once there are enough X assets on the B chain, AnyX can be directly exchanged for X.
In addition to active construction in the cross-chain field, Multichain also lays out information transmission tools between blockchains. In April of this year, Multichain launched the cross-chain messaging application anyCall for smart contract application developers. This application can implement the contract on the A chain to call the B chain, which means that it can transfer data across chains, including smart contract information. , NFT, Token, data, etc., as long as the anyCall tool is deployed in the chain application, the multi-chain deployment of the protocol and the distribution management of assets can be realized.
According to Multichain’s official website, as of April 28, its locked-up encrypted asset value (TVL) was 5.9 billion US dollars. TVL is far ahead in the field of cross-chain applications. There are 43 block networks that support cross-chains, and chains that support cross-chains There are more than 2,000 kinds of assets on it. It is currently the cross-chain tool with the widest network coverage, the most supported assets, and the largest business volume among cross-chain applications.
Introduction
Introduction
Stargate (STG) is a cross-chain application built on the LayerZero protocol of the cross-chain infrastructure, mainly focusing on the cross-chain of native assets.
LayerZero is a cross-chain communication protocol that supports users to send or transfer information between different blockchains or smart contracts. It is essentially an information transmission channel, which can be simply understood as a communication tool between blockchains. With LayerZero, developers and users can not only realize information transfer between different block networks, but also realize information transfer between DApps in different block networks.
mechanism
mechanism
As the first product on LayerZero, Stargate believes that the current cross-chain bridge also has an "impossible triangle", that is, "instantaneous transfer of assets across chains", "unity of cross-chain liquidity pools", "cross-chain The originality of transferred assets” can only satisfy one or two of the three elements in the current cross-chain facilities.
For example, although the cross-chain bridges under the current mode of "locking assets + casting and packaging" have realized the immediacy of arrival, the assets after cross-chain transfer are not original assets, but packaging assets, which often need to be transferred on the target chain. Packaging assets can be converted to native assets for better use. For another example, "liquidity pool"-style aggregation cross-chain tools often cannot unify liquidity because the capital pool is deployed in different blockchain networks, resulting in the amount of assets in the liquidity pool on each chain Limited, unable to meet users' demand for large cross-chain transfers. There are also some cross-chain bridges in the Layer 2 expansion network, which simply cannot guarantee the immediacy of arrival.
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Stargate supports direct conversion of USDC on Ethereum to BUSD on BSC
In terms of transaction immediacy, LayerZero adopts ultra-light client technology, that is, a client application is implanted on both the A chain and the B chain, and the A The authenticity of the information transmitted between the B chain and the B chain can guarantee the timeliness and correctness of the transaction without any middleware.
In terms of ensuring the unity of native assets and liquidity, Stargate solves the problem by establishing a native fund pool on each blockchain, and allows the same asset to share the liquidity of different chains to ensure assets cross-chain Depth of liquidity. But this will also encounter risks, such as whether there will be a redemption crisis when multiple chains withdraw assets from the liquidity pool at the same time, or a large withdrawal of a certain chain will cause liquidity to dry up. To this end, Stargate adopts the Delta resource allocation balance algorithm to ensure the balance of the original asset pool, that is, to supplement liquidity through borrowing or arbitrage, or to increase the extractor's fee to limit large withdrawals.
At present, Stargate currently mainly supports users to deposit USDC, USDT, BUSD, DAI and other USD stablecoins in various block networks, provides liquidity for cross-chain liquidity pools, and rewards liquidity providers with STG tokens, which are Stargate Issued platform pass. According to Stargate’s official website, as of April 28, the value of stablecoin assets locked in the app was $1.6 billion.
It should be noted that Stargate has not been online for a long time, and the risk of contract loopholes cannot be ruled out. Although the official has corrected some loopholes in time, users still need to pay attention to safety.
Introduction
Introduction
Router Protocol is a cross-chain communication infrastructure dedicated to providing bridging facilities between numerous Layer1 and Layer2 blockchain networks, enabling users to instantly trade and exchange assets in different blockchain networks. Currently supports asset transfer between BSC, Avalanche, polygon, Fantom, Arbitrum and other block networks.
Router is not only a cross-chain tool, but also a "wireless expandable bridge", which provides a cross-chain communication network platform, that is, all blockchains can be linked to each other by connecting to Router network nodes, and any new chain can It can be inserted into the Router network through configuration to realize intercommunication with other block networks.
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mechanism
mechanism
The Router deploys a bridge contract on supported blockchains. On the source chain, the bridge contract can lock the user's assets; on the target chain, the bridge contract unlocks or mints the assets on the target chain to cross-chain users.
The assets that Router can bridge can be roughly divided into two categories, one is "stable currency assets" and the other is "non-stable currency assets".
When "stable currency assets" cross-chain, the user's stable currency will be locked on the source chain and unlocked on the target chain. If there is not enough asset liquidity on the target chain, the user will receive a packaged version of the stable currency, such as USDC packaged into RUSDC.
There are two ways for "non-stable currency assets" to cross-chain. One is to lock the cross-chain assets on the source chain, and unlock the same amount of assets on the target chain. The second is to convert non-stable currency assets into stable currency assets and lock them on the source chain, unlock the same amount of stable currency on the target chain, and use the stable currency to purchase non-stable currency assets on the target chain and send them to the user's wallet.
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Router converts AAVE on Ethereum to MATIC on Polygon
In addition, the Router can connect to the liquidity pool of any DEX on the chain it supports. When exchanging non-stable currency assets across chains, the Router first uses the DEX fund pool on the source chain to convert the non-stable currency assets submitted by the user into stable currency assets, and then converts the stable currency assets into the user's desired currency on the target chain. cross-chain assets. To this end, Router also developed the "Pathfinder Algorithm" to find the best exchange path for moving assets from the source chain to the target chain, and complete the exchange of non-stable currency assets for cross-chain users at the best price and minimum slippage.
Introduction
Introduction
Swim Protocol is a native asset cross-chain trading tool within the Solana ecosystem. It adopts a multi-chain automatic market maker (AMM) model, supports cross-chain transfer of native assets, and eliminates the method of "encapsulating assets".
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Swim Protocol supports direct conversion of USDC on Solana to BUSD on BSC
The bridging technology used by Swim Protocol is Wormhole.
Wormhole is a cross-chain bridge launched by Solana ecology, and it is also the first two-way cross-chain bridge between Solana and Ethereum. It realizes asset cross-chain by encapsulating assets. When the assets on Ethereum want to cross-chain to Solana, Wormhole will first lock the assets in ERC-20 format in the Ethereum smart contract, and mint the corresponding assets in SPL format on Solana, and the Wormhole will be generated after the cross-chain Packaged assets brought in, not native assets.
Swim Protocol combines the multi-chain AMM exchange mechanism with Wormhole bridging technology, does not use the process of encapsulating assets, but builds a capital flow pool to support users to directly exchange native assets on one chain for native assets on other chains.
Currently, users can obtain transaction fee share by providing liquidity for the Swim Protocol stablecoin exchange pool. It should be noted that currently Swim Protocol has not issued any platform tokens.
