Uniswap Labs and cross-chain interoperability supplier Throughout Protocol have proposed a brand new Ethereum token normal for cross-chain intents to handle liquidity fragmentation challenges.
The brand new normal is below Ethereum Request for Remark 7683 (ERC-7683) and goals to ascertain a unified framework for specifying cross-chain actions in intents-based methods. Intents are automated blockchain interactions based mostly on the person’s desired end result, excluding the necessity for particular information.
For instance, intents can automate a cross-chain token swap by way of an optimum route with out requiring further effort from the person, like figuring out essentially the most environment friendly bridges and exchanges.
ERC-7683
The ERC-7683 normal is designed round a standard cross-chain intents circulation whereas permitting for flexibility in implementation particulars. This circulation begins with the swapper signing an off-chain message, adopted by his order being disseminated to a filler on the origin chain. The order is then stuffed within the vacation spot chain.
Notably, Uniswap Labs highlighted that they may implement this normal on the cross-chain model of UniswapX, however the ERC-7683 normal is already obtainable for any decentralized utility to implement.
Furthermore, the usual permits customization of varied elements, equivalent to worth decision strategies, success constraints, and settlement procedures. The proposal has been submitted to the CAKE Working Group for dialogue and assessment.
Intent-based methods have emerged as a number one resolution for end-user cross-chain interplay, simplifying the complexity and time constraints related to conventional bridges.
Nevertheless, these methods face challenges in accessing enough liquidity and sustaining energetic filler networks throughout chains, points which will intensify because the variety of distinct chains grows.
Liquidity fragmentation difficulty
Ethereum’s layer 2 blockchains deal with the scalability points that the business has struggled with for years. But, they current a brand new problem: the fragmentation of funds flowing into completely different smaller ecosystems.
Moreover, this difficulty goes to the technical degree, as every layer 2 blockchain processes and orders transactions in blocks in a centralized method, in keeping with CoinShares analyst Max Shannon.
Shannon defined that every blockchain retains its personal ledger and set of good contracts, leading to a fragmented world state of transactions that negatively impacts liquidity effectivity. He added:
“Addressing fragmentation promises shared liquidity, gas efficiency, bridge-less bridging, seamless app upgrades, and easier L2 bootstrapping and development.”
