DeFi began on Ethereum, but has since spread to other blockchains like Avalanche and layer 2 solutions such as Optimism and Arbitrum. This marks the beginning of a multi-chain future. Aave, Sushiswap and others are leading this trend.
The abundance of top-notch Layer 1 blockchains and Layer 2 roll-ups enabled DeFi users to carry out trades, loans, borrowings, and gain yield on multiple distinct systems. The way to access all that value was connecting different assets.
Rather than just connecting assets and using them in the same dApp on a separate chain, what if we could build applications from scratch that spanned multiple chains? What if it were possible to make native cross-chain exchanges? For example, envision selling ETH on Ethereum and obtaining AVAX on Avalanche with one single transaction! While this opens up a plethora of opportunities, it also brings forth new problems we may have not considered prior. For instance, how do you handle slippage in an asynchronous cross-chain environment? Classic AMMs will have issues adapting on-chain pricing systems into a native cross-chain application due to the time gap associated.
If the cross-chain channel experiences a slight delay, it can cause an order to be unsuccessful due to slippage, which is difficult to reverse once beyond the confines of a single chain.
In addition, smart arbitrageurs in the multi-chain environment will increasingly pay attention to cross-domain MEV. MEV has been a major issue in DeFi trading on Ethereum, causing front-running, back-running, and sandwich attacks that result in poorer prices for users. On top of that complexity is the multi-chain relaying where MEV can be seen from far away. Cross-chain AMM swaps have the potential to become a catastrophe.
The methodology of Hashflow
Hashflow’s cross-chain swaps provide an excellent user experience, allowing traders to exchange any asset between any chain pairs. Slippage and MEV are eliminated through the use of signed price quotes that remain fixed during the transaction. This means there is no slippage when trading locally or across chains, guaranteeing users receive their assets at full value on their chosen destination without risk of front-running or sandwiching by MEV bots.
Hashflow provides users with the best DeFi trading experience available, without bonding curves or slippage. Quotes from top market makers can be requested and submitted securely on-chain using cryptographically signed RFQs, allowing traders more control over their pricing algorithms and better prices. Now it’s possible to trade popular spot assets across Ethereum, Avalanche, BNB Chain, Arbitrum, and Polygon (but please bear in mind that this is an experimental feature in alpha).
More in The Future
Once it is up and running, Hashflow’s priority will be to extend its reach to other networks such as Solana, Cosmos, Polkadot and more. Think of the potential: being able to go from ETH to SOL without having to manually bridge and then use a decentralized exchange!
In the future, Hashflow will expand to encompass more than just spot markets; it will include options, derivatives and other assets as well. By combining the advantages of CeFi and DeFi, Hashflow will continue to deliver the best of both worlds even in a multi-chain environment.
