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Asset interoperability is an industry problem that needs to be solved urgently. In this context, cross-chain has become the first choice for technological innovation.
Written by: Ad
The singularity of the DeFi outbreak finally appeared this year, and the total lock-up volume of DeFi under the raging fire was as high as over 15.1 billion. Under the development of Ethereum’s DeFi bulldozer type, problems such as high gas fees, low transaction efficiency, and barriers to different underlying assets have gradually surfaced. Some developers are beginning to realize that public chain expansion cannot solve all the problems of the DeFi ecosystem.
DeFi is the progress and deepening of the development of the blockchain. The foundation of its good development lies in the improvement of the underlying facilities, the interconnection of assets and the construction of the ecology. Asset interoperability is an industry problem that needs to be solved urgently. In this context, cross-chain has become the first choice for technological innovation.
The meaning of cross-chain
Cross-chain is an important technical means for the interconnection of various types of blockchain platforms. To put it simply, cross-chain means that assets originally stored on a specific blockchain can be converted into assets on another chain to realize the circulation of value.
On August 14, 2017, Ethereum transaction volume exceeded Bitcoin for the first time. The rise of Ethereum has allowed the market to see the hope of other blockchains. Public chains, private chains, and alliance chains are emerging in an endless stream. Due to the differences in the underlying technologies of different chains, their ecology is independent of each other, and it is difficult to interconnect to form economies of scale and network effects. The cross-chain concept became popular for the first time in 2017, and reached its peak with the popularity of the basic public chain track in 2018. However, the delayed launch of star projects Cosmos and Polkadot has pressed the pause button for the development of the cross-chain track.
With the outbreak of DeFi in 2020, there is an increasing demand for the integration of non-Ethereum assets (especially mainstream assets such as Bitcoin) into the DeFi field. In their view, Bitcoin’s sufficient liquidity, large-scale transaction volume and audience are a good rocker for the further development of DeFi. From the data point of view, the same is true. As of October 15th, Skew data shows that the circulation of pegged Bitcoin on Ethereum has exceeded 140,000. Cross-chain allows people to see more possibilities, and high hopes are also placed. How to launch a cross-chain public chain that perfectly meets the needs of DeFi is the first problem facing developers and enterprises.
Comparison of mainstream cross-chain technology solutions
The current mainstream cross-chain technologies can be divided into several categories: 1. Notary schemes; 2. Sidechains/relays; 3. Hash-locking; 4. Distribution Distributed private key control (Distributedprivate key control). Its characteristics and representative items are shown in the figure below:
Notary mechanism: By electing one or more organizations as notaries, the events of chain A will be monitored automatically or on request, and corresponding actions will be executed on chain B after the specified event occurs to realize the response to the event. The notary group uses a specific consensus algorithm to reach a consensus on whether the event occurs;
Side chain/relay: The side chain/relay is based on the light client verification technology, that is, execute a smart contract similar to the blockchain light client function on chain B, and verify the encrypted hash tree of chain A ( Cryptographic Hash Tree) and block header (Block Header) to verify whether a specific transaction, event or status information of chain A has occurred;
Hash lock: By running specific smart contracts on two chains, cross-chain transactions and information interaction are realized. User A generates a random number s, calculates the hash value of the random number h=hash(s) and sends it to user B; A and B lock their respective assets through the smart contract; if B receives the correct one within X time s, the smart contract will be automatically executed and the assets of B will be transferred to A, otherwise it will be returned to B; if A receives the random number s within 2X time, the assets of A will be automatically transferred to B, otherwise it will be returned to A.
Distributed private key control: Based on cryptographic multi-party calculation and threshold key sharing technology, the private key is divided into N shares and distributed to N participants at the same time. Only when the distribution of K private keys is collected can one be recovered Only the complete private key can unlock the assets in the private key. Through the private key generation and control technology, the encrypted currency assets are mapped to the chain based on the built-in asset template of the blockchain protocol, and new smart contracts are deployed based on the cross-chain transaction information to create new encrypted currency assets.
The technologies of the two big star public chains Polkadot and Cosmos belong to the category of side chains/relays. Cosmos realizes the cross-chain between the Comos ecosystem through IBC technology, and more supports isomorphic chains. Polkadot implements cross-chain through the mechanism of relay and parachain, and defines the different blockchains that it contains as parachains. Before the parachain auction, Polkadot currently has relatively few mainstream public chains that can be accessed.
At the same time, because the side chain/relay mechanism mainly realizes the verification of events or payments by reading the block headers, it is impossible to obtain the full picture of all transactions on the network like the full nodes of the main chain, so it is difficult to achieve comprehensive verification of transactions, such as tracing all history. UTXO (unspent transaction output) data of the transaction, judge whether there is double payment, etc. The side chain/relay mechanism relies on the honesty of miners. In the case of chain failure or 51% attack, the cross-chain system will not work properly.
In this context, public chains based on other cross-chain technologies have begun to show up. Take HBTC Chain as an example. On October 20th, the HBTC Chain testnet was successfully launched. Through the two-year research and development of the underlying facilities, HBTC Chain has realized the decentralized cross-chain circulation and exchange of encrypted assets, thereby further linking users, communities, public chains and exchanges, and improving its inherent ecological capabilities. As for how to truly realize the intercommunication of underlying assets, as the most complete heterogeneous cross-chain in the market, HBTC Chain gives its optimal solution:
Cross-chain asset bridge: It can realize complete and safe asset decentralized cross-chain circulation and exchange, and supports free circulation and exchange of any public chain;
OpenDex protocol: able to support AMM+Orderbook dual-mode cross-chain DEX;
On-chain asset OTC solution: Supports targeted exchange and personalized exchange of on-chain orders, supplementing OpenDex.
The chain heard and pulled the cocoon, and summarized the characteristics of HBTC Chain into four key words: cross-chain asset bridge, security, Opendex and ecological construction.
Four keywords of HBTC Chain
HBTC Chain chose cryptographic technology-based cross-chain support, combined with cryptographic tools such as elliptic curve digital signatures, zero-knowledge proofs, and trusted multi-party computing, to achieve the distributed generation and distribution of cross-chain custody asset private keys at all core nodes. signature. In the whole process, the private key is completely invisible and never actually appeared, but is kept in the form of fragments on different core nodes; and supports the N*N cross-chain model, and supports the data between the complete chain and the chain Interoperability.
Cross-chain asset bridge
The advantage of HBTC Chain is that it is based on distributed key technology at the beginning of the project, can support the access of any heterogeneous chain or homogeneous chain, and can be fully compatible with various cross-chain technologies and standards. Different cross-chain standards cause cross-chain compatibility issues, so that all public chains are truly opened up. Therefore, to a certain extent, HBTC Chain is a public chain that can fully support the secure decentralized cross-linking of any public chain on the market, and meets investors’ needs for cross-chain in the DeFi field to the greatest extent.
A major supporting application of HBTC Chain is its cross-chain asset bridge, which can realize asset security and decentralized cross-chain circulation and exchange. Users can use HBTC Chain to introduce any public chain assets into any public chain that supports smart contracts to help the ecological construction of the corresponding public chain.
Let’s take the mapping of BTC to Ethereum as an example (cBTC), the process is as follows:
1. The user deploys a smart contract on Ethereum and issues any number of cBTC (take 1,000 as an example).
2. Deposit 1000 cBTC into HBTC Chain and initiate a BTC-cBTC asset mapping proposal (mainly to check the security of smart contracts). After the proposal is passed, a BTC-cBTC asset mapping pair will be created and all cBTC will be locked;
3. The user recharges 10 BTC to the escrow address of HBTC Chain, and exchanges 10 cBTC through the mapping pair;
4. Mention 10 cBTC to the Ethereum smart contract, and there are 10 cBTC in circulation (completely anchored with BTC 1:1);
5. The user can redeem to cBTC and then recharge to enter the HBTC Chain network, map and exchange BTC, and then withdraw to his BTC address.
HBTC Chain exchange process
The pain point of cross-chain is that in the mixed custody of multiple tokens, it is difficult to protect the absolute security of users’ digital assets even through a third party. Based on this pain point, HBTC Chain adopts the global patented Bluehelix private key sharding technology, and manages the private key through the joint collaboration and consensus of the verification nodes, ensuring that the private key generation is completely decentralized, thereby achieving safe and reliable custody And cross-chain asset management technology. In order to be compatible with safety and efficiency, HBTC Chain also proposes a three-layer node model: ordinary nodes, consensus nodes and core nodes. The architecture diagram is shown in the following figure:
Three-tier node model
In terms of cross-chain interaction, HBTC Chain uses an atomic way to interact to ensure that there will be no issues of fake charges and various asset security attacks.
In order to solve the liquidity problems faced by the Ethereum DeFi ecosystem, HBTC Chain supports the OpenDex protocol and the on-chain digital asset OTC respectively, and provides comprehensive transaction support for different user needs.
(1) Support OpenDex protocol, support AMM+Orderbook mode cross-chain swap
In addition to building cross-chain channels for encrypted assets, HBTC Chain also provides trading channels for these cross-chain assets and launched its own decentralized cross-chain exchange OpenDex to facilitate users’ transactions on the chain.
HBTC Chain provides a complete OpenDex protocol. By accessing the OpenDex protocol, users can fully share the liquidity and depth of any transaction pair on the chain. Its main innovative functions can be roughly divided into the following points:
Compared with DEX leader Uniswap, OpenDex can provide complete privacy protection and access without threshold, while supporting any cross-linked currency transactions, achieving the same currency support and transaction experience as DEX and CEX, thus solving the problem of Uniswap support The problem of insufficient assets.
Although the AMM (Automated Market Maker) model is popular in DEX such as Uniswap, some centralized users who are accustomed to the Orderbook model must be considered. Therefore, OpenDex supports the AMM+Orderbook dual mode and uses the same liquidity pool to meet the needs of all users.
Thanks to the construction of infrastructure, HBTC Chain’s TPS is as high as 2000. While the transaction efficiency is greatly improved, its transaction fee is less than 1% of Ethereum, which logically solves the questioned performance problem of the Ethereum network.
OpenDex supports the Saas model on the chain. The access to communities, users, and exchanges is simple and efficient. At the same time, OpenDex also provides a complete liquidity incentive plan and a zero-sharing model for project parties to maximize the protection of communities and users.
(2) On-chain digital assets OTC
The OpenDex protocol is mainly aimed at rapid asset exchange, but for large transactions, it will inevitably face slippage problems and decentralized directional safe exchange problems. In this regard, HBTC Chain refers to the OTC model and launches an on-chain digital asset OTC solution to make up for OpenDex’s shortcomings. The main process is as follows:
Support users to create two types of OTC exchange orders (free exchange and directional exchange), free exchange can specify the target asset and price of the exchange, the single exchange limit and the exchange timeout time, and the directional exchange can specify the target address and target asset of the exchange And quantity.
The user of the exchange order can withdraw the order at any time, and the order will be automatically destroyed after the exchange is completed.
Directional redemption must be performed by the designated address to ensure the safety of both parties.
Free exchange users must exchange at a limited price, which can support a larger exchange volume.
Of course, the differentiation and innovation of cross-chain products is only the first step. To achieve the goal of HBTC Chain, the ecological construction task is even more difficult. At the smart contract level, in the future, HBTC Chain will support wasm and evm dual virtual machines, enabling rapid migration of existing projects and more application development on HBTC Chain. As the public chain of DeFi’s underlying ecological facilities, HBTC Chain will actively cooperate with communities, exchanges, and public chains to build links and strive to promote the development of DeFi ecology.
HBTC Chain defines itself as a “heterogeneous cross-chain DeFi public chain” . In the team’s view, heterogeneous cross-chain DeFi public chains refer to public chains with different characteristics and structures that can be used for asset security and decentralization through HBTC Chain, and can also seamlessly connect with various decentralized financial applications. Public chain infrastructure. From the current point of view, HBTC Chain is moving towards its goal step by step. But Ethereum, as the oligarch of the DeFi public chain, wants to accept the project and capital flow that the Ethereum overflows, HBTC Chain needs to do a lot more.
References: Li Fang, Li Zhuoran, Zhao He. Research on the progress of blockchain cross-chain technology. Journal of Software, 2019, 30(6): 1649-1660. http://www.jos.org.cn/1000-9825/ 5741.htm