Why can the UMA protocol, which can synthesize financial derivatives, be used for cross-chain by Across?

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The cross-chain protocol Across promoted by the team behind UMA has been launched on the Ethereum mainnet. It uses UMA’s “optimistic oracle” mechanism to optimize cross-chain efficiency and cost. Currently, Arbitrum One can cross-chain the Ethereum mainnet.

Written by: Donnager

The cross-chain protocol Across, promoted by the team behind the synthetic asset protocol UMA, is officially launched on the Ethereum mainnet. Compared with other cross-chain bridges, Across uses UMA’s “optimistic oracle” mechanism to optimize the assets between L1 and L2. Cross-chain efficiency and cost.

The core of Across is UMA’s Optimistic Oracle (Optimistic Oracle) mechanism. Through the design of economic mechanism and game theory, it realizes an oracle solution that can support a large number of data types. In addition to cross-chain, UMA’s optimistic oracle has previously been used to create new types of synthetic financial assets or derivatives. You can refer to Chain Wen’s previous compilation of ” In addition to stocks and currencies, DeFi protocol UMA can also be used in synthetic assets. How much imagination can be created? “.

The first mainnet version of Across did not launch many functions, but only included a few types of assets from the Ethereum expansion network Arbitrum One back to the Ethereum mainnet. At the same time, users can only establish liquidity on Ethereum L1. Perhaps they are just verifying the feasibility of the product on the main network, so they did not support more networks and assets.

Fundamental

For the current Optimistic Rollup Layer 2 network (Arbitrum and Optimism), there is a 7-day challenge period for returning from L2 to L1, so Across currently chooses this very specific application scenario. This mechanism includes multiple parties, but it can be simply divided into users, agreements, and insurers.

When users need to withdraw assets from L2 to L1, they submit this demand through the Across protocol, and then this part of the funds will be returned to L1 from the official bridge of L2 (7 days). At the same time, there is an insurer on L1, and he can immediately release the funds to users on L1 and charge a portion of the fee.

After submitting this part of the funds, he can apply for the funds just issued to the user from the Across agreement and the fund pool in the agreement. There will be a 2-hour challenge window. This is also the stage where UMA’s optimistic oracle comes into play. . When the window period has passed (that is, when there is no dispute), the insurer will receive the funds from Across. What follows is the settlement business between the agreement fund pool and the L2 official bridge.

In addition to the above flowchart, Across also explained how the agreement can be handled in various disputes. However, as a whole, it is still using UMA’s optimistic oracle, that is, to resolve disputes after problems occur. For details, please refer to this Documentation .

Relationship with UMA

At present, Across is mainly constructed by Risk Labs, the development team behind UMA, so Across can even be understood as an experiment by the UMA team in applying the UMA optimistic oracle machine to the cross-chain mechanism, or just the development of an MVP (Minimum viable product) only.

Known members of the Across Protocol team include Clayton Roche, UMA community development leader, Henrystats, UMA community liaison, and Jesper Gisslen, UMA product designer.

But UMA does not want this to be a project promoted by them, so it is also recruiting partners and even the co-founders of Across, hoping to make the project the same way as UMA before, letting ecological partners take over the research and development.

Is the UMA oracle safe?

Security is a very important topic. Whether UMA’s optimistic oracle is safe enough, it can only be said that no serious security incidents have been seen yet, perhaps because the current transaction volume and scale are still small. But this kind of game-through mechanism is definitely not as secure as a scheme completely realized by cryptography.

Previously, cross-chain bridges have actually become the hardest hit areas for security accidents. For example, Poly Network and Synapse have been attacked, so the security of Across still needs more time to verify. It is not recommended for ordinary users to use it at such an early stage. . For the details of the optimistic oracle, please refer to this article .

Native tokens have not yet been issued, but there should be

Across does not contain any tokens, although there are native tokens in the UMA used at the bottom.

UMA is recruiting a team and even a co-founder for Across, and one of the responsibilities of the team includes the potential token design, distribution ratio and distribution method. Those who are interested can join their Discord to participate in the discussion. In addition to the founders, they also need more roles such as engineers, content creators, customer support and more.

Therefore, UMA also expects that the Acorss agreement can evolve into an AcrossDAO in the future, but it must first find a suitable development team to accept the subsequent development iterations of the project.

Functions that have been opened

Across already supports the Arbitrum One network and Ethereum, so users can perform two operations:

  • For liquidity providers, assets can be deposited on Ethereum L1 to support cross-chain. Currently, four assets of ETH/USDC/UMA/WETH are supported;
  • For users with cross-chain needs, the four assets of ETH/USDC/UMA/WETH on Arbitrum can be crossed back to the Ethereum main network.

Why can the UMA protocol, which can synthesize financial derivatives, be used for cross-chain by Across?

Assets are returned from L2 to L1. The cross-chain time estimated by the Across protocol is 1 to 3 minutes, which should be similar to other third-party cross-chain bridges. In terms of cost, at the current gas fee level, you need to pay close to 0.03 ETH, that is, at least US$100, the cost will be lower if the cross-chain amount is larger.

Disclaimer: As a blockchain information platform, the articles published on this site only represent the author’s personal views, and have nothing to do with the position of ChainNews. The information, opinions, etc. in the article are for reference only, and are not intended as or regarded as actual investment advice.

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