Uniswap Labs and cross-chain interoperability supplier Throughout Protocol have proposed a brand new Ethereum token customary for cross-chain intents to deal with liquidity fragmentation challenges.
The brand new customary is beneath Ethereum Request for Remark 7683 (ERC-7683) and goals to determine a unified framework for specifying cross-chain actions in intents-based methods. Intents are automated blockchain interactions primarily based on the consumer’s desired final result, excluding the necessity for particular information.
For instance, intents can automate a cross-chain token swap by means of an optimum route with out requiring further effort from the consumer, like realizing essentially the most environment friendly bridges and exchanges.
ERC-7683
The ERC-7683 customary is designed round a typical cross-chain intents movement whereas permitting for flexibility in implementation particulars. This movement 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 crammed within the vacation spot chain.
Notably, Uniswap Labs highlighted that they’ll implement this customary on the cross-chain model of UniswapX, however the ERC-7683 customary is already out there for any decentralized software to implement.
Furthermore, the usual permits customization of varied elements, equivalent to worth decision strategies, achievement constraints, and settlement procedures. The proposal has been submitted to the CAKE Working Group for dialogue and evaluation.
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 situation
Ethereum’s layer 2 blockchains handle the scalability points that the trade has struggled with for years. But, they current a brand new problem: the fragmentation of funds flowing into completely different smaller ecosystems.
Moreover, this situation goes to the technical degree, as every layer 2 blockchain processes and orders transactions in blocks in a centralized method, based on CoinShares analyst Max Shannon.
Shannon defined that every blockchain retains its personal ledger and set of sensible 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.”
