Thread by @DougieDeLuca

1 - An emerging player in interoperability is @ComposableFin who unites the #IBC, #EVM, & #XCM ecosystems. Connecting the fragments that today make up DeFi, Composable aims to achieve composability through a system wherein the whole of DeFi is greater than the sum of its parts 🧵

2 - At the core of Composable's innovation is its Cross-Chain Virtual Machine (XCVM). Through natively cross-chain smart contracts, true composability across multiple ecosystems is achievable.

This is a big, what they're setting out to do even exceeds @LayerZero_Labs's offering

3 - As solutions like LZ's achieve interoperability via trusted relayers & oracles, it's through a reactive approach that smart contracts on different apps/chains can interact. Since devs still need to choose a "home", it forces them to have to make a difficult decision

4 - Being that your native chain determines the available interoperability features for your deployment, XCVM acts as the orchestration layer which devs can leverage & build their app on rather than having to choose a single chain. This is a huge advantage + step forward

5 - To dive into how this works, we’ll start with the Composable SDK which links various chains together (what LZ does). Utilizing Mosaic (more to come on this), it allows for function calling across several chains within the EVM & Substrate ecosystems.

But wait, there's more...

6 - Via Composable, smart contracts across chains can interoperate in a trustless way w finality proofs via the Centauri bridging infrastructure. This enables devs to build dApps which can natively operate across chains thus leveraging the advantages of several chains at once.

7 - Composable also plays a unique role in the #IBC ecosystem.

For those unfamiliar, IBC allows for the trustless passing of arbitrary data in opaque packets between Cosmos SDK chains. It does this through light clients and finality proofs vs the mint & relayer structure

8 - Rn Composable’s expanding IBC’s functionality to connect chains in other ecosystems, like $NEAR, by integrating light clients that track the finality in these ecosystems on IBC. This becomes the transport layer for XCVM.

There's more, @CosmWasm is also being added to XCVM

9 - XCVM serves as the smart contracting layer to orchestrate IBC & XCM-inspired msgs.

CosmWasm will be on top of a pallet to allow for smart contracts to be written. XCVM will utilize IBC as the transport layer to send data + packet formats across contracts on different chains

10 - Wondering how this all comes together? See the diagram below which demonstrates how the XCVM enables the creation of natively cross-chain smart contracts (different from existing interoperability solutions like LZ which depend on an off-chain relayer to connect Chain A & B).

11 - Now an example from @0xbrainjar:

A user aims to withdraw a loan on a different chain than where they deposited. To do this, the msg binds to an IBC port & sends IBC opaque packets to the satellite contract on chain B. This allows the user to withdraw the loan on chain B.

12 - On the user-facing side, unique abilities are accessible.

Composable allows for users to tailor their experience to maximize for a desired parameter while minimizing ecosystem-specific decision making. Parameters include but are not limited to: time, gas fee, slippage, etc.

13 - This is accomplished via the Routing Layer which is made up of Indexers + Solvers who synergize to compute the best possible route (based on set parameters) across multiple ecosystems & continuously query contracts from a library of DeFi Application Binary Interfaces (ABIs).

14 - The Routing Layer assesses all of the possibilities for a given action across all possible layers & chains and then optimizes the pathway. It's crypto-economically secured via its parachain, w incentives provided for actors to properly select the best routes for user actions

15 - Next we’ll move onto the @Picasso_Network Parachain. To ensure censorship resistance & network security, Composable's @kusamanetwork (which Picasso is built on) & @Polkadot (upcoming) parachains underpin the entire ecosystem, acting as a finality + infrastructure layer

16 - Some Picasso primitives include

Apollo - MEV-resistant oracle embedded directly into the runtime of the chain

Cubic - Bringing the paradigm of vaults like on $ETH

Centauri - trustless Substrate<>IBC bridge between #Dotsama & @cosmos using finality proofs & light clients

17 - Picasso will maintain deep liquidity via the Pablo DEX + by connecting with other ecosystems (inc EVM). Other pallets from the #Dotsama eco can natively communicate with Picasso using XCM + the Centauri-IBC bridge ties in the @cosmos eco to Picasso & other parachains as well

18 - Picasso utilizes 2 tokens: $PICA & $CHAOS.

PICA is for gas + governance

$CHAOS (locked PICA) is an fNFT (similar to what's being utilized in $LQDR on $FTM). CHAOS will govern + direct the treasury, generate revenue, & bootstrap liquidity for protocols giving it many uses.

19 - Though there are more details to cover in order to explain Picasso in its entirety, in consideration of the length of the thread, I am going to move on to the last component of Composable’s tech stack.

For more info on Picasso, see below:

medium.com/@Picasso_Netwo…

20 - The last major component of the stack to cover is Mosaic which serves as the asset transferal layer for all cross-chain/layer interactions. Ensuring liquidity moves as intended, it facilitates the propagation of the instructions required to satisfy the user’s desired outcome

21 - Liquidity flows based on fees, speed, & other tangibles. Simply, Composable wants users to move their assets freely and avoid barriers like liquidity maximization problems. This has led to Mosaic becoming an optimized liquidity directing system for cross-chain/layer txs.

22 - Tho not final, Composable's also exploring becoming a rollup-based environment on a substrate-based chain (1st ever). For example, a contract being deployed on the spree module of the XCVM then executing the tx in a zk-rollup-based execution environment.

Keep an eye out...

23 - Through its stack, Composable sets out on its mission to build a fully interoperable future capable of offering devs + users seamless UX & utility. With DeFi currently restricted by its siloed & fragmented structure today, the solution which Composable brings is much needed.

24 - @ComposableFin initially caught my attention as it connects 3 major ecosystems, IBC, XCM, & EVM. Through its tech stack’s focus on interoperability, simplicity, & efficiency, Composable is worth consideration for anyone seeking to transform how liquidity is dispersed in DeFi

25 - Though still in its infancy (relatively), many builders and users today are concerned with how to improve the efficiency of liquidity in DeFi. With L1s & L2s continuing to emerge at a rapid rate, the need for solutions like Composable’s will only become more apparent.

26 - This I believe will be the catalyst for it emerging as a dominant player in DeFi being that it already connects the three main ecosystems in Web3 today. Over the coming months, I am excited to watch Picasso’s proliferation and the deployment of their $DOT parachain.

Thanks

BONUS - Additional Resources:

medium.com/composable-fin…

composablefi.medium.com/dev-log-no-5-1…

composablefi.medium.com/composable-fin…

medium.com/composable-fin…

BONUS #2 - For the latest on Composable, check out their latest dev log below. Updates include the developments of Mosaic, @Picasso_Network, Apollo, Pablo, + an update from the bridging team.

Make sure to follow @ComposableFin if you haven't already :)

https://twitter.com/ComposableFin/status/1532805338122133507?s=20&t=beMwgcsPLg6OwlMnvGfXHQ