What problems does the “Multi-chain pipe” built by UXUY address?
Decentralized multi-chain trading platform UXUY connects numerous public chains, Layer 2 solutions, DeFi protocols, cross-chain bridges, and crypto assets. To enhance transaction efficiency, reduce transaction costs, and mitigate risks associated with cross-chain transactions. Recently, UXUY proposed the concept of building a Multi-chain Pipeline, also known as the Multi-chain Pipe.
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This concept aligns with the views of Ethereum founder Vitalik, as mentioned by Vitalik in his Reddit post ‘I’m pessimistic about cross-chain applications’:
The problem gets worse when you go beyond two chains. If there are 100 chains, then there will end up being dapps with many interdependencies between those chains, and 51% attacking even one chain would create a systemic contagion that threatens the economy of that entire ecosystem. (January 2022) — Vitalik Buterin
Cross-chain Risks as Seen Through Vitalik’s Eyes
To prove that Vitalik’s concerns are not unfounded, In traditional cross-chain models, Cross-chain Bridges wrap native assets to generate rule-compliant wrapped assets on the target chain for achieving cross-chain asset transfers. For example, using a Cross-chain Bridge to send one ETH token to a Solana wallet would result in the wallet receiving a “wrapped” version of the token, meaning it has been converted into a token on the target chain. In this case, the Solana wallet would receive a “Bridged” version of the ETH token, which has been converted into the SPL token, the generic token standard on the Solana blockchain.
However, Cross-chain Bridges have experienced frequent attacks. According to data from Defilima, at the time of writing, a total of $2.66 billion in funds has been stolen through Cross-chain Bridges, accounting for 39% of the total stolen assets in the crypto ecosystem, and this share continues to rise.
In March 2022, Ronin Bridge was hacked, resulting in a loss of $624 million
In February 2022, Wormhole was hacked, resulting in a loss of $320 million
In October 2022, Coinbase Bridge was hacked, resulting in a loss of $586 million
In July 2023, Multichain was hacked, resulting in a loss of $130 million
Therefore, Vitalik proposes:
It’s always safer to hold Ethereum-native assets on Ethereum or Solana-native assets on Solana than it is to hold Ethereum-native assets on Solana or Solana-native assets on Ethereum. (January 2022) — Vitalik Buterin
The cross-chain risks also manifest in transactions moving away from decentralized forms of validation, increasing reliance on cross-chain bridge operators instead of the decentralized security of the underlying blockchain networks. This can have implications for the security of DeFi protocols as wrapped assets entering DeFi significantly lower security. Toxic wrapped assets undoubtedly contribute to the instability of the crypto ecosystem, as any issue with one chain can affect the entire crypto ecosystem.
UXUY Multi-chain Pipe
More and more new public chains are being created, and more people are entering the crypto ecosystem. However, due to the lack of interoperability between public chains and their inability to directly interact, the demand for cross-chain solutions in the market is growing stronger.
UXUY has proposed the concept of the UXUY Multi-chain Pipe, which is distinct from traditional cross-chain solutions. It is smaller, lower in cost, and offers higher security and efficiency, enabling cross-chain transactions to be completed in an instant.
The UXUY Multi-chain Pipe does not create any wrapped assets; all transactions originate from native tokens. It involves pre-built instant liquidity pools on two chains, and when users want to perform cross-chain transactions, they simply need to transfer digital assets to a specific address on the target chain. The protocol will then execute an algorithm to deposit the corresponding amount of assets into the user’s designated address on the target chain, making multi-chain transactions readily available.
Due to its low cost, the UXUY Multi-chain Pipe is suitable for large-scale deployment. It can connect any emerging asset with established assets, ensuring ample liquidity in the crypto ecosystem. At that point, the crypto ecosystem will no longer be a collection of isolated “islands,” but a collaborative and interconnected era where numerous chains coexist in harmony.
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UXUY shares a similar vision with Vitalik — the future belongs to multi-chain. And trading is the only weapon that can break down barriers, allowing assets to flow freely between each public chain, driving the realization of a fair crypto ecosystem.
Core Advantages of the Multi-chain Pipe:
Trading and Holding Native Assets
Limiting the Scale of Wrapped Asset
Reducing Wrapped Assets’ Entry into DeFi Protocols, Prevent TVL Leverage Bubble
Improving the Real-time Nature of Multi-chain Transactions
UXUY’s original intention is to prioritize users and encourage them to hold native assets, providing a self-custodial environment for users’ transactions on DEX. Leveraging the security of native protocols encourages the industry to move away from evaluating projects based solely on the scale of wrapped assets and instead emphasizes practicality and the pursuit of native assets as a new industry paradigm. While leverage is promoting asset prosperity, the entry of toxic cross-chain assets into the DeFi ecosystem poses irreversible risks and is the most vulnerable link in the entire crypto ecosystem. The UXUY Multi-chain Pipe will mitigate the TVL leverage bubble to a certain extent. The real-time nature of transactions is designed to offer convenience to traders and is the most critical tool for DEX to challenge CEX, enhancing the user experience on decentralized trading platforms and attracting mainstream users to enter the DEX ecosystem, providing the infrastructure for the future development of Social Trading based on the DEX ecosystem.
UXUY proposes the UXUY Multi-chain Pipe to raise awareness about the risks of wrapped assets in the market and to encourage users to trade and store native assets, thus ensuring the utmost security of users’ funds. UXUY is ready to become the best multi-chain trading platform in the market and looks forward to collaborating with outstanding traders on this journey.