Uniswap Labs and cross-chain interoperability supplier Throughout Protocol have proposed a brand new Ethereum token customary for cross-chain intent to deal with liquidity fragmentation points.
The brand new customary is beneath Ethereum Request for Remark 7683 (ERC-7683) and goals to create a unified framework for specifying cross-chain actions in intent-based programs. Intents are automated blockchain interactions based mostly on a person's desired final result, eliminating the necessity for particular data.
For instance, intents can automate cross-chain token swaps in an optimum approach with out requiring further effort from the person, corresponding to data of probably the most environment friendly bridges and exchanges.
ERC-7683
The ERC-7683 customary is designed round a standard circulation of intentions throughout chains whereas permitting flexibility in implementation particulars. This circulation begins with a swapper signing an off-chain message, after which his order is shipped to the backfill on the unique chain. The order is then crammed within the vacation spot chain.
Notably, Uniswap Labs emphasised that they are going to implement this customary on the cross-chain model of UniswapX, however the ERC-7683 customary is already obtainable for any decentralized utility to implement.
As well as, the usual permits customization of varied points corresponding to value decision strategies, efficiency restrictions and settlement procedures. The proposal was submitted for dialogue and evaluation to the CAKE working group.
Intent-based programs have emerged as a number one answer for cross-end person interplay, simplifying the complexity and time constraints related to conventional bridges.
Nonetheless, these programs face challenges in accessing ample liquidity and sustaining energetic replenishment networks throughout chains, issues that will intensify because the variety of totally different chains grows.
The issue of liquidity fragmentation
Ethereum's Layer 2 blockchains clear up scalability points that the trade has confronted for years. But they current a brand new problem: the fragmentation of funds flowing into varied smaller ecosystems.
Plus this the issue goes to a technical stage as a result of every layer 2 blockchain processes and orders transactions in blocks in a centralized approach, based on CoinShares analyst Max Shannon.
Shannon defined that every blockchain maintains its personal ledger and set of sensible contracts, leading to a fragmented international state of transactions that negatively impacts liquidity effectivity. added:
“The fragmentation answer guarantees shared liquidity, gasoline effectivity, bridgeless bridging, seamless utility upgrades, and simpler L2 deployment and growth.”
