NEAR Protocol x SEDA - Building A Chain Abstracted Future

In this episode of Near Protocol which took place on April 8, 2024, Matt Peters hosted Jasper De Gooijer from SEDA Protocol and Illia Polosukhin from NEAR Protocol to discuss chain abstraction, cross-chain integration, decentralized applications, and more! Read our notes below to learn more.

Background

Matt Peters (Host) – Head of Marketing at SEDA

Jasper De Goojier (Guest) – Co-Founder & CTO at SEDA

Illia Polosukhin (Guest) – Co-Founder of NEAR Protocol

Advancing Blockchain Usability: Chain Abstraction and Account Aggregation for Enhanced Adoption

Illia explains his background in AI and machine learning, particularly his involvement with the development of Transformers. He describes his current focus with NEAR on implementing chain abstraction to facilitate widespread blockchain adoption.
Illia tests the phrase “the final chapter of blockchain,” suggesting that following the narrative phase, blockchain will be used in substantive, real-world applications.
Jasper shares his optimism about chain abstraction being a significant next chapter for crypto, anticipating continual innovation beyond just this development.
Illia explains chain abstraction, emphasizing user-friendly interactions where the technical details of blockchain operations are hidden from users. He discusses the concept of account abstraction as a means to simplify user experiences, particularly around security and transaction fees.
Illia shares challenges faced in earlier blockchain applications, such as the paradox of needing to buy crypto before being able to earn it. He highlights Near’s success in simplifying the onboarding process through account abstraction, which has led to a significant user base.
Illia discusses the limitations of account abstraction when confined to specific chains and the impact on developers’ decisions about where to launch applications. He advocates for a unified approach to chain abstraction that transcends individual blockchain platforms, enabling seamless user interaction across the Web3 ecosystem.
Jasper asks Illia about the apparent overlap among terms like “intents,” “chain abstraction,” and “account aggregation,” noting a debate he had over whether these concepts are synonymous.
Illia explains that these terms are part of a broader goal of achieving chain abstraction. He clarifies that “intents” refer to users specifying desired outcomes without dictating the steps, suitable for certain use cases. He mentions the development of various marketplaces and specific swap functions, illustrating that such approaches abstract away complex blockchain processes from users.
Illia says that “aggregation” and other concepts like “modularity” and “zk proving” aim to enhance system security across multiple chains, ensuring that users do not need to understand the underlying technical details.
Illia discusses the role of “chain signatures” in simplifying user interactions across different blockchains by linking a single Near account to multiple chain addresses, which facilitates easier transactions and management.

NEAR’s Cross-Chain Account Abstraction: Seamless Transactions and Emerging Web3 Standards

Jasper questions if the cross-chain account abstraction product developed by NEAR could be considered intent-based, emphasizing ease of transaction across chains without user concern for the operational specifics.
Illia says that their core technology allows a NEAR account to interact across chains without specifying transaction details. He explains that an intent-based relayer network can execute transactions based on user needs, further simplifying the process.
Matt asks about potential market fragmentation and the risk of incompatible standards in chain abstraction, prompted by Jasper’s discussion of different entities working towards similar goals.
Illia acknowledges the fragmentation concerns but expresses optimism about integrating various approaches. He believes that as more applications demonstrate the feasibility and advantages of chain abstraction, standards will evolve based on practical usage and user adoption.
Jasper says that the issue of who aggregates the aggregators frequently arises, acknowledging the intent to establish standards for gen abstraction, reminiscent of the early days of RPC standardization efforts.
Matt asks how the competitive landscape will shift with the adoption of chain abstraction and queries what will define the choice of entry points into Web3 when traditional competitive marketing strategies are prevalent.
Illia explains that the competitiveness will likely shift toward the quality of applications and growth marketing strategies, similar to Web2 dynamics. He details that their application, dapp, aggregates 14 layer twos and over 160 smart contracts, offering a unified user interface that simplifies transacting across various networks without needing to switch browsers or tabs.
Jasper elaborates on the chain abstraction stack, describing it as entry points into all of Web3 with multiple backend layers, focused particularly on the settlement layer within the so-called cake framework, which ensures users can perform intended actions and receive rewards.
Matt asks about the specific areas of the stack that NEAR is focusing on.
Illia says that his team is concentrating on the permission layer with chain signatures, along with the settlement, application, and solver layers, emphasizing a multi-chain native approach that allows users to transact seamlessly across networks. He mentions that their platform supports a variety of decentralized front ends, allowing users to select the best technology layers for their specific needs.

Chain Abstraction: Enhancing Blockchain User Experience and System Integrity

Matt uses an example involving a user named Alice to illustrate how chain abstraction functions from a user perspective, detailing the process of staking Ethereum through multiple abstracted layers, from the user interface to the solver and settlement layers, emphasizing the simplicity and user-friendliness of the system.
Illia explains that they initially built the system with chain abstraction in mind, focusing solely on the Near blockchain to simplify the interaction for users and developers, hiding the complexity of its infrastructure, including its sharded nature and roll-ups.
He mentions that in March, they expanded the network by adding two more shards, increasing the network’s capacity by 50% without making the underlying complexities visible to users or developers.
Illia explains the account model’s flexibility, which includes meta transactions and a programmable account model that allows accounts to be transformed into NFTs for sale. This design aims to shield developers and users from the complexities of blockchain technology while enabling them to progressively become more adept users within the ecosystem.
Illia recounts the evolution from focusing on the Near blockchain to adopting a multi-chain approach as Web3 expanded. This shift led to the development of chain signatures and decentralized front-ends, emphasizing a minimal-chain approach across Web3, not just limited to Near.
Jasper discusses the risks associated with relying on solvers in intent networks, noting the potential for increased censorship due to the competitive nature of the market and the dominance of large entities, which might specialize or form partnerships to achieve better margins.
He highlights the importance of allowing third-party solvers to operate, even at higher fees, to maintain system integrity against potential censorship by powerful entities.
Illia says that a high-stakes system for solvers in blockchain has significant issues, emphasizing the need for a permissionless platform that facilitates intent propagation across a peer-to-peer network.
Illia says that privacy in the blockchain is currently inadequate, with all transactions being public and traceable. He proposes creating a privacy shield for chain signatures to enhance transaction anonymity without compromising transparency.
Jasper says that exposing one’s intent on blockchain platforms can lead to MEV attacks, where others use this information against the intent owner by always taking the maximum possible value.
Matt discusses the possibility of cross-chain intents that might allow bots to exploit the flow of transactions across multiple blockchains.
Illia explains that setting more sophisticated intents, such as specifying a price only above a certain percentage of the last trade, could mitigate issues like unfulfilled limit orders and front-running.
Jasper suggests that mitigating MEV will increasingly become the responsibility of applications rather than platforms, emphasizing the shift of value and responsibilities towards applications with the advent of chain abstraction.
Illia highlights that chain abstraction could lead to more efficient transaction processing, contrasting decentralized multi-chain experiences with centralized exchanges, which currently dominate due to their efficiency.
Illia notes that while certain technologies might introduce latency, they ultimately improve transaction speeds and execution by decentralizing the trading experience, especially in multi-chain environments.

NEAR Protocol’s Role in Enhancing Web3 Accessibility and Multi-Chain Operations

Matt mentions that the current standard in transaction speeds isn’t too high, and he shares his personal struggles with needing gas tokens to complete transactions. He highlights that while DeFi seems to be the primary use case, there are various other applications evolving in Web3, such as gaming and social finance.
Matt asks what specific use cases are being built for on the NEAR protocol and whether it primarily supports DeFi or also aids other industries.
Illia explains that the NEAR protocol is used broadly across various applications, including DeFi, finance, and payments. He describes how integrating services like credit card payments and Apple Pay requires manual chain integration, which NEAR simplifies. Illia mentions emerging assets and the ease of interacting with applications across different blockchains, enhancing user accessibility to a multi-chain environment.
He notes the challenge of multi-chain fragmentation and the general shift away from reliance on a single blockchain due to rapidly changing technologies.
Jasper comments on the historical network effects in crypto and discusses how fragmentation has impacted user experience negatively. He asks if NEAR’s approach to chain abstraction and cross-chain interactions might eliminate the need for synchronous transactions across blockchains.
Illia says that NEAR has always prioritized asynchronous blockchain operations to better handle scalability. He discusses the limitations and advantages of this approach, particularly in avoiding complex operations like flash loans that span multiple contracts. Illia emphasizes that NEAR’s design facilitates simpler user interactions and supports the needs of more sophisticated users like market makers and arbitrageurs.
Jasper acknowledges the benefits of asynchronous operations, noting how they simplify complex multi-chain transactions for users.

The shift from Blockchain Maximalism to Application-Centric Approaches

Matt questions if the growing diversity in blockchain applications and the shift away from a single-chain focus might signal the end of crypto maximalism.
Illia predicts the persistence of tokens available across all chains, likening them to meme tokens that are ubiquitous regardless of the blockchain. He foresees a reduction in blockchain maximalism, suggesting that it will become less common for people to argue that their preferred blockchain will dominate.
Jasper anticipates that maximalism might shift towards specific applications rather than entire blockchains. He compares this future scenario to current attitudes towards internet providers, where users are not particularly partisan.
Jasper speculates that while developers might still show a preference for certain cloud services like AWS versus Google Cloud, end users will focus more on the applications themselves. He finds this shift towards application-centric views exciting.
Illia affirms the importance of user experience in promoting growth for applications, explaining that showcasing the end-user experience is a crucial strategy for winning user support.
Illia encourages checking out documentation on chain signatures for those developing or planning to launch applications. He promotes the use of blockchain technology to maximize the reach and effectiveness of various applications.

Check out these important links

Show Information

Medium: YouTube (Video)

Show: NEAR Protocol

Show Title: Building A Chain Abstracted Future | Illia Polosukhin (NEAR Protocol) & Jasper De Gooijer (SEDA)

Show Date: April 8, 2024