Chainflip is a decentralised, trustless protocol that enables cross chain swaps between different blockchains.
DeFi has recently been the center of attention in the crypto and DeFi realm, particularly since 2020 when DeFi summer exploded with the rise of Yield farming. Since then, we’ve seen numerous other DEXes spring up with a large swarm of users jumping in to take advantage of the benefits of trading in a permissionless way.
While these DEXes offer decentralized and permissionless trading,they only allow swaps between ERC-20 tokens, leaving aside an enormous amount of trading volume.This lack of interoperability creates more of a hassle for trading, failing to support the cross-chain swapping of assets.
Even with L2 technology starting to roll out, Ethereum gas fees are through the roof, reaching absurdly high levels of sometimes hundreds of dollars just to make or approve a transaction. They’re also often slow and unpractical in certain cases
In a nutshell, the world needs more out of DeFi than just Ethereum. With Solana, Polkadot Cosmos and other ecosystems getting real traction and volume, the future of crypto and especially DeFi will be multi-chain and the infrastructure is not ready for it.
Luckily, the missing piece to the puzzle is here! Introducing Chainflip – a unique project that will forever change the way cross-chain swapping is conducted.
What Is Chainflip?
Chainflip is a decentralized protocol leveraging an AMM based exchange that facilitates the cross-chain swapping of various cryptos, as seamlessly and intuitively as erc-20 DEXes. We’re bringing a similar user experience to Uniswap, but taking it up a notch to incorporate other much needed blockchains.
Users can swap between major cryptos like ETH, BTC, XTZ, and DOT in a frictionless and low-cost environment. Our protocol relies on its own standalone substrate-based proof of stake blockchain called the State Chain, which acts as the coordinator between all validators, allowing all nodes to come to consensus about the current state of the liquidity pools, swaps, and vault balances.
Users who execute swaps on our protocol pay one total transaction fee that will take into account both coins and the network fee – it’s as simple as that.
$FLIP is the governance token of the protocol, helping power the security and stability of the network. $FLIP tokens are also bought and burned each time a swap takes place to create value for every token holder no matter how many tokens they hold Initially FLIP will be an ERC-20 token to leverage the ethereum ecosystem and allow a fast early adoption, but eventually the possibility of expanding it to become a multi-chain token is something that would probably make sense.
In other Cross-chain DEXs there are many barriers for the user that we have carefully taken care of by streamlining the whole swapping process and make the experience intuitive and easy.
We’ve eliminated the need for wrapped tokens – native blockchain assets are the only assets used There’s also no special software or wallet client needed to interact with our protocol, and we don’t require collateral or synthetic counterparty assets.
But how is this all possible? Our protocol connects chains together by creating giant multisig vaults that sit on various chains, where users can deposit their assets – we use a decentralized network of nodes that coordinate all the inputs/outputs in and out of these wallets.
Our validators have the ability to create joint wallets (called Vaults) for each chain and help power the ecosystem. As previously mentioned, the State Chain is its own blockchain that houses all of the protocol rules, serving as a mechanism to help facilitate and coordinate the movement of assets.
Quoters place quotes into the State Chain for users, and these quotes contain swap details such as wallet addresses, slippage limits, timeout rules and more. They’re also essential for transmitting messages for when liquidity is added to pools.
Liquidity pools are also available for users to swap tokens. Liquidity providers can add liquidity to the pools to earn trading fees, similarly to other DEXes. Every blockchain needs to have 1 Vault, but the assets within each Vault can be divided across multiple pools.
All of these components function like a well-oiled machine, running the Chainflip protocol and maximizing efficiencies. We’ve added all of the best capabilities to ensure users receive the best possible experience.
Chainflip is a decentralized protocol allowing for the native cross-chain exchange of cryptos in a permissionless fashion without relying on pegged/wrapped assets. We’re bringing multi-chain compatibility to the forefront.
By allowing tokens on different chains to be seamlessly exchanged and swapped, in addition to creating a frictionless and low-fee trading environment, users can now swap across chains without special software, wallets, or accounts.
We are the solution that DeFi needs, and we’ll continue to branch out to support as many chains as possible. Our team is laying the foundation for what we believe is the future of DeFi trading.
Kseniia is the Chief Content Officer of Coinspeaker, holding this position since 2018. Now she is very passionate about cryptocurrencies and everything connected with it, so she tries to ensure that all the content presented on Coinspeaker reaches the reader in an understandable and attractive way. Kseniia is always open to suggestions and comments, so feel free to contact her for any questions regarding her duties.