In Archway’s Twitter Spaces which took place on August 19, 2024, Max.arch from Archway hosted GC from Euclid Protocol to discuss the challenges of liquidity fragmentation across blockchains and how Euclid Protocol’s unified liquidity pools and virtual settlement layer aim to solve these issues and more! Read our notes below to learn more.
Background
Max.arch (Host) – Core Contributor at Archway
GC (Guest) – Core Contributor at Euclid Protocol
Archway – an incentivized smart contract platform that rewards developers for building on the network with baked-in incentives and rewards
Euclid Protocol – an open-source decentralized unified liquidity layer designed to allow any application to integrate into a unified source of truth
Euclid Protocol: Unifying Liquidity Across Multiple Blockchains
- GC introduces Euclid protocol, explaining that it started around April 2024 to address the problem of fragmented liquidity across blockchains. He describes Euclid as an infrastructure that unifies liquidity across various networks, including EVM, Solana, and Cosmos.
- GC elaborates on Euclid’s concept of unified pools. Instead of having separate liquidity pools for the same assets on different chains, Euclid creates a single, large pool accessible from multiple networks. This approach aims to reduce slippage, lower transaction costs, and improve user experience by eliminating the need to bridge assets between ecosystems.
- Max acknowledges the issue of liquidity fragmentation, particularly in the Cosmos ecosystem, and asks GC to explain how Euclid’s shared liquidity pools work.
- GC expands on the fragmentation issue, noting that it’s becoming prevalent in Layer 2 solutions on Ethereum as well. He introduces the concept of “virtual pools” used by Euclid to address this problem.
- GC explains that Euclid uses a virtual settlement layer, built on Aptos, to keep track of liquidity across all integrated blockchains. This approach allows assets to remain on their native chains while still being accessible from any integrated network.
- GC describes how the virtual pool acts as a ledger, tracking the liquidity of assets across the entire ecosystem. When a user initiates a swap, Euclid’s message-passing protocol sends the request to the virtual settlement layer, which calculates the appropriate exchange and can distribute the resulting assets to any desired chain or even split them across multiple chains.
Euclid’s Cross-Chain Swap Process and Upcoming Testnet Launch: User Experience and Developer Opportunities
- Max asks for a more detailed example to illustrate how Euclid’s process works from a user and DEX perspective, expressing interest in getting more details.
- GC explains the user experience, emphasizing its simplicity. Users can perform a single transaction on their native chain, such as swapping $ETH for $ARCH tokens on Ethereum. They can choose to receive $ARCH on Archway or even on Ethereum itself. The process involves just one transaction signed with a MetaMask wallet, eliminating the need for users to deal with gas tokens, IBC, or bridging.
- From a technical or DEX perspective, GC describes the backend process. When a user sends a transaction, it triggers a cross-chain message to Euclid’s virtual settlement layer. This layer executes the swap on the pool, calculates the amount to be received, and sends another message to the chain where the user wants to receive the assets.
- GC mentions that they’ll soon have a demo interface showcasing the smooth user experience, where users don’t need to understand the complexities of bridging or cross-chain transactions. He highlights that this architecture was chosen to avoid asset bridging, which he considers a major attack vector and source of poor user experience in blockchain.
- Max acknowledges the benefits of abstracting backend complexities from users, noting that it will certainly benefit most users who want specific actions done without understanding all the technical details.
- Max asks about the current status of the protocol, mentioning that they’re starting up their testnet.
- GC confirms they’re close to launching their testnet, about a week away. He explains that they’re planning two testnets: the first focusing on Cosmos-related chains, and the second, coming in 2-3 months, will focus on EVM integrations. The initial testnet will involve partnerships with Archway and deployment on 8-9 other chains. GC mentions their aim to launch the mainnet by the end of the year.
- Max expresses excitement about getting their user base to test the protocol, emphasizing the value of solving the fragmentation problem. He then asks about the Aurora hackathon that Euclid is hosting.
- GC explains that the hackathon aims to encourage developers to integrate Euclid into various applications, including DeFi apps, NFT marketplaces, and DEXes. He highlights that developers can build using smart contracts or Euclid’s API, which allows even web2 developers to build DeFi apps without smart contract experience. The hackathon registration is opening soon, with different tracks including an Archway track, and winners will be eligible for grant applications from Euclid.
Archway and Euclid Collaboration: Incentivized Testnet, Hackathon, and Chain Wars
- Max expresses excitement about the upcoming collaboration and asks for more details about the Archway track in the hackathon. He mentions that they are still finalizing the focus of their track but are looking forward to seeing how developers can incorporate Euclid’s functionality into Archway’s DeFi ecosystem.
- Max then asks about the testnet, specifically whether it will be incentivized and what activities users can engage in.
- GC confirms that the testnet will be incentivized and divided into three phases:
- Developer phase: Focused on the hackathon and bug bounties for developers to examine smart contracts and applications.
- User phase: Involves completing quests to stress test the application and infrastructure. Users can earn points by adding liquidity, removing liquidity, and performing DeFi transactions.
- Chain Wars: A competition where users generate transactions on their preferred chains. The chains with the most volume will be awarded allocations of Euclid tokens to distribute to stakers or use as incentives.
- Onyeulo Ifeanyi asks about rewards for early supporters who may not have funds to participate in on-chain transactions. GC clarifies that there will be ways for supporters to earn points through various tasks, not just on-chain activities.
- Max mentions additional platforms like Interact and Galaxy that Euclid is using to boost user engagement. GC adds that they’re also developing their own quest system and focusing on integrating with other applications to tap into existing user bases.
- As the space wraps up, GC shares some “alpha,” mentioning upcoming interface teasers, encouraging participation in the hackathon, and highlighting the Chain Wars as an opportunity for Archway stakers to potentially earn Euclid tokens.
Check out these important links
- Listen to the Original Audio
- Follow max.arch on Twitter
- Follow GC on Twitter
- Follow Archway on Twitter
- Follow Euclid Protocol on Twitter
Show Information
- Medium: Twitter (Audio)
- Show: Archway Twitter Space
- Show Title: Archway with Special Guests: Euclid Protocol
- Show Date: August 19, 2024