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Eli5DeFi Profile picture
@eli5_defi
Sep 12, 2022 • 22 tweets • 19 min read • Read on X
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#GM!

1/ How do the cross-chain #bridges works? In this #visualguide, we explain how assets are transferred between chains and how interoperability becomes a fundamental aspect of the future.

#DeFi #Cryptocurrency #Ethereum #Bitcoin $ETH $BTC Image
2/ Blockchain networks are very fluid and efficient as single entities but lack the ability to communicate with each other. This creates demand for seamless transfer across different chains without using centralized exchanges as intermediaries or selling the token first. Image
3/ Cross-chain #bridges solve the problem by enabling the transfer of tokens, smart contracts, data, feedback, and instructions between two independent chains without intermediaries. Image
4/ In general, cross-chain #bridges are divided into two based on the transactions validator: trustless bridge and trusted bridge. Image
5/ Based on the purposes, #bridges can be classified into:
- Asset-specific @WrappedBTC
- Chain-specific @auroraisnear, @NEARProtocol ~ Rainbow Bridge
- Application-specific @THORChain, @compoundfinance
- Generalized @axelarcore, @LayerZero_Labs Image
6/ Based on the architectures, #bridges also can be classified into:
- External validators & federation
- Light clients & relay
- Liquidity providers' network Image
7/ By understanding the #bridges architecture we can look at different traits that explain the strength and weaknesses of each bridge. Image
8/ Wrapped tokens are an integral part of the #bridges to achieve interoperability. Assets that are transferred to the bridge will be minted in the form of wrapped token that adheres to the rules, data, and contracts (native) on the destination blockchain. Image
9/ In this diagram we can see how assets move between chains by using the lock & mint mechanism and burn mechanism. These two mechanisms are the most popular and versatile to move assets across multiple chains. Image
10/ Existing blockchain #bridges face the interoperability trilemma, current designs cannot satisfy all three traits. There is always some level of compromise. Image
11/ Despite facing the trilemma, cross-chain #bridges are still important because they can increase asset productivity, improve user experience, and support the distribution of liquidity across the chain and decentralized apps (dApps). Image
12/ #Bridges are not without issues, growing concerns directed toward asset centralization and imbalance of liquidity. Security also becomes a big problem since the massive assets deposited lure hackers to steal and exploit the bridges. Image
13/ #Bridges attacks not only target the asset custodians, but other targets such as asset issuers, smart contract vulnerability, and bridge users are also prone to security hacks. Image
14/ Beyond the #bridges: #eWASM is a project to bring highly flexible, near-native performance and optimization of web assembly for Ethereum to achieve interoperability and flourish application developments on #Ethereum.
@ethereum Image
15/ Beyond the #bridges: Layer-0 like @Polkadot and @cosmos allows developers to create custom blockchains that can be tailored to their requirements by combining various elements from different L1s while retaining their own ecosystem

$DOT $ATOM Image
16/ Beyond the #bridges:@axelarcore, @LayerZero_Labs, @OneAnalog, and @MapProtocol are several examples of projects that focused to bring interoperability across the chains. Image
17/ The Takeaway from The Bridges

#DeFi #Cryptocurrency #Ethereum #Bitcoin $ETH $BTC $NEAR $SOL $FTM Image
18/ References

#DeFi #Cryptocurrency #Ethereum #Bitcoin $ETH $BTC $NEAR $SOL $FTM Image
19/ If you want to understand more about #Ethereum L2 #Rollups after bridging from the mainnet. Please find below thread:
20/ Like our threads and want to support us? please use our #GMX referral link for 10% trading discount:
gmx.io/#/?ref=eli5defi
21/ Shout-out to the account below for amazing educational content:
@SalomonCrypto
@blocmatesdotcom
@shivsakhuja
@rektdiomedes
@knowerofmarkets
@rektdiomedes
@BarryFried1
@The_ReadingApe
@VirtualKenji
@ManoppoMarco
@Storgan_ManleyX
@alpha_pls
22/ If you find our thread and #visualguide useful, please like and retweet. Big thanks to @mimiLFG for proofreading and reviewing this #visualguide

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More from @eli5_defi

Eli5DeFi Profile picture
Jul 30
Vitalik's vision for Ethereum? ZK-rollups as the endgame.

But when and how do we get there?

Sooner than you'd expect.

Let's dive in 🧵
The post will cover:

1️⃣ ZK-Rollups Challenge
2️⃣ Computation Issue
3️⃣ @LumozOrg
4️⃣ Full ZK Suite
5️⃣ zkVerifier Nodes
6️⃣ How to Get Nodes in @FjordFoundry
Amid the Layer-2 surge, ZK-based rollups have emerged as the most secure—yet they hit a snag.

Computation.

ZK-rollups demand hefty computational power from provers to generate validity proofs, driving up transaction costs and infrastructure cost. Image
Read 22 tweets
Eli5DeFi Profile picture
Jun 7
RWA is set to become a generational wealth opportunity.

By 2030, around $10.9 trillion will be invested in RWA.

However, not all chains are ready for this change.

@Algorand is the exception.

A 🧵 Image
This post will cover:

1️⃣ How Big RWA will Be?
2️⃣ But Why Do Traditional Business Need to Switch to RWA?
3️⃣ Algorand - The Native Infrastructure for RWA
4️⃣ RWA Project in Algorand
5️⃣ Real Estate
6️⃣ Art, Books and Music
7️⃣ Stocks, equities and commodities
8️⃣ Stablecoins and EMTs
9️⃣ Alternative Assets and Data
➤ How Big RWA will Be?

@RolandBerger and @21co__ estimate that RWA will reach approximately $10.9 trillion by 2030.

This estimation is based on the assumption that RWA will capture ~10% of the net assets of regulated open-end funds.

To put it simply, RWA is expected to become a prominent sector in the future, offering numerous opportunities.Image
Read 16 tweets
Eli5DeFi Profile picture
Jun 7
The growth of Aptos ecosystem has been remarkable.

If you're feeling FOMO but are unsure of where to start

This guide will take you down to the Aptos rabbit hole.

A 🧵 Image
This post will cover:

1️⃣ Aptos Brief Introduction
2️⃣ Aptos Infrastructure
3️⃣ Move VM
4️⃣ Aptos in Numbers
5️⃣ Aptos is For Everyone
6️⃣ Start Your Aptos Journey
7️⃣ Aptos Ecosystem
8️⃣ AI x Aptos
➤ Aptos Brief Introduction

@Aptos is a modular, high-performance Layer-1 blockchain that utilizes the AptosBFTv4 consensus protocol, based on delegated Proof-of-Stake (DPoS).

In addition, Aptos incorporates other innovative tech stack:

➡️ The Quorum Store mempool protocol
➡️ The Block-STM parallel execution engine
➡️ Move VM.

These features allow Aptos to achieve scalability, reliability, and upgradeability as its fundamental principles.Image
Read 16 tweets
Eli5DeFi Profile picture
May 31
AI progress will decelerate due to GPU scarcity and centralized cloud domination.

Decentralization is THE ONLY KEY.

And @AethirCloud will pave the path with @AethirEdge.

A 🧵Image
This post will cover:

1️⃣ GPU Supply Bottleneck
2️⃣ Rise of GPUaaS
3️⃣ (De)Centralizing Computation
4️⃣ Aethir
5️⃣ How Aethir Network Works
6️⃣ Partnership & The Next Frontier
7️⃣ Aethir Edge (AE)
8️⃣ The 3-Layer Infrastructure
9️⃣ Tech, Latency and Collaborative Computing
🔟 AE Use-Cases
➤ GPU Supply Bottleneck

Over the past three years, the AI industry has made significant progress, which has caused a tremendous increase in the need for GPUs.

The global CAGR GPU market grew by 33.5% and @nvidia is the leading player with 95% market share.

However, there has been a challenge in meeting the high demand for GPUs to process exabytes of data necessary for AI training.

Failure to address this issue properly may lead to a gradual slowdown in AI development.Image
Read 19 tweets
Eli5DeFi Profile picture
Apr 7
⇒ @ionet is an exceedingly anticipated project this year.

⇒ Their token launch, $IO, is scheduled to take place on 28 April.

⇒ We have collected all the important IONet information in a dynamic compendium that will be regularly updated.

⇒ Share and bookmark. 🧵 👇🏼

(1/n)
🟢 @Eli5_defi visual and fundamental analysis of @ionet



(2/n)
🟢 @HouseofChimera - @IONet One Pager



(3/n)
Read 14 tweets
Eli5DeFi Profile picture
Mar 18
DeFi's complexity and lack of regulation prevent institutions from participating.

What if I told you there's a DeFi protocol that offers institutional grade features?

It is compliant, secure, and experiencing exponential growth.

Allow me to introduce you to @SpoolFi. Image
This post will cover:

1️⃣ What is @SpoolFi ?
2️⃣ Why Spool?
3️⃣ How Does Spool Work?
4️⃣ Supported Protocols
5️⃣ What Are The Use-Cases?
6️⃣ Spool Ecosystem Partners
7️⃣ Partners Highlight
8️⃣ Case Studies Highlight
9️⃣ LSDfi Vault Highlight - $srETH
🔟 $SPOOL Token
◢ What is Spool?

→ @SpoolFi is an advanced DeFi middleware infrastructure.

→ Spool integrated seamlessly with the best DeFi protocols available.

→ It empowers users to engage in a specific range of yield generating protocols with a risk-diversified, automatically managed, and highly efficient approach.Image
Read 17 tweets

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