Problem as method: a new framework for understanding chain abstraction

If you are confused when you first come into contact with the concept of "chain abstraction", then you are not alone.

——It looks very important, there are many projects, a lot of financing, and they all say they are standards...but I don't know what they are for. Is "chain abstraction" another buzz word on the new concept pipeline of Web3?

This article will start from the concept and return to the basic issues, in order to scoop out pearls from the sea of ​​nothingness.

TL; DR:

• The purpose of abstraction is to hide complexity. The level of abstraction in the Web3 context is often higher than that of Web2 (and therefore more difficult)

• Modularity lowers the threshold for building a public chain, and chain abstraction includes the re-architecting of public chain relationships and improving user/developer experience

• Cross-chain asset transfer, cross-chain communication, interoperability, and chain abstraction: a set of conceptual subsets centered on coordinating state modifications (transactions) on different chains (but often full of middle ground in actual use)

• Intent-based chain abstraction solutions have become a popular architecture, and many component products may gradually move towards the final form of chain abstraction in the form of puzzles

• The current discussion and construction of chain abstraction in the industry has not yet broken the superstition of infra-based. The establishment of chain abstraction as a real problem is inseparable from the on-chain activity, modularization progress, and the entry of new users and developers. The future of chain abstraction is not a bright and smooth road. It is necessary to consider the impact on long-tail public chains and the exploration of non-DeFi applications. What is the problem of chain abstraction? Is chain abstraction a real problem? If so, which category does it belong to? What is the difference between cross-chain, interoperability, and chain abstraction? Is chain abstraction a real problem?

  ——Not necessarily. The establishment of the question requires context. Imagine asking people 500 years ago what they thought about the energy crisis.

  So where does our discussion of chain abstraction come from?

  The answers given by different people may include several keywords: Ethereum roadmap, modularization, intention, large-scale adoption... At present, the most explanatory point of view may be: chain abstraction is the second half of modularization.

  In order to understand this point of view, it is necessary to explain the definition of chain abstraction.

  In computer science, "abstraction" refers to the process of separating high-level operations and concepts from background processes, with the aim of simplifying understanding by hiding complexity. For example, most Web2 users only need to know browsers and ChatGPT, and they may know nothing about the abstract content or even the abstract concept itself.

  Similarly:

  • Account abstraction: By hiding the internal information of the blockchain account, such as the address, private key, and mnemonic, the account is realized without feeling

  • Chain abstraction: By hiding the internal information of each chain, such as the consensus mechanism, gas fee, and native token, the chain is realized without feeling

  In traditional software development, abstraction and modularity are a set of closely related important concepts. Abstraction defines the hierarchy and architecture of the system, and modularity is the way to implement this architecture. Specifically, each module represents an abstraction level, and the interaction between modules hides its internal complexity, which facilitates the expansion, reuse, and maintenance of the code. Without abstraction, the boundaries between modules will become complex and difficult to manage.

  
  

  

  It is worth noting that Web2 usually abstracts and modularizes within a closed or partially closed ecosystem, with the abstraction level concentrated within a single platform or application. The environment is relatively controlled and usually does not need to solve cross-platform or cross-system compatibility issues. However, in the context of Web3, due to the pursuit of decentralization and open ecosystems, the relationship between modularization and abstraction is more complicated.

  At present, although modularization helps solve the abstraction problem within a single public chain and lowers the threshold for public chain construction, the user/developer experience abstraction under the multi-chain pattern is an area that modularization has not fully covered. There is a relatively obvious island effect between different public chains and ecosystems, which is specifically reflected in the dispersion of liquidity, developers and users. The proposal of chain abstraction includes the restructuring of public chain relations to achieve connection, integration and compatibility between multiple chains, which can be confirmed in an article published by Near in January this year.

  We can assume that the urgency of chain abstraction as a real problem is closely related to the development of the following conditions:

  • On-chain activity: Are there more dAPPs bringing more active user chain behaviors

  • Progress of modular blockchains:Does more active chain behaviors drive the construction of more rollups and app chains?

  • Barriers to entry for new users and developers: To what extent does the current blockchain environment hinder the influx of new users and developers (referring to attrition in an upward trend, not anger at stagnation)

  Which category does chain abstraction belong to among the many problems?

  Chain abstraction itself is an abstract concept, and the narrative level within Web3 is also relatively high-dimensional, which may explain to some extent why chain abstraction presents an all-encompassing and even confusing appearance. Specifically, it is not a solution, but a guiding ideology.

  Another example is Bitcoin today. After experiencing several halvings, sharp rises and falls, and the launch of ETFs, Bitcoin is no longer just a technical solution or asset class, but also a time-spanning ideological system and industry totem, representing a series of core encryption values, and will continue to guide the innovation and development of the industry in the foreseeable future.

  

  What are the differences and connections between cross-chain, interoperability, and chain abstraction?

  We can also understand cross-chain, interoperability, and chain abstraction on a spectrum from concrete to abstract.From a morphological point of view, they are a set of conceptual subsets centered on coordinating state modifications (transactions) on different chains, but in actual use they are often full of middle ground.

  

  We can roughly divide cross-chain related applications and protocols into two categories:

  • Cross-chainasset transfer: cross-chain bridges, cross-chain AMMs, cross-chain aggregators, etc.

  • Cross-chaincommunication: Layerzero, Wormhole, Cosmos IBC, etc.

  The transfer of assets is also inseparable from messaging. The messaging layer of a cross-chain asset transfer application is generally composed of a set of on-chain smart contracts and state update logic. The cross-chain communication protocol is the solution that abstracts this messaging function into a general, protocol-layer solution.

  The cross-chain communication protocol can handle more complex cross-chain operations, such as governance, liquidity mining, NFT transactions, token issuance, game operations, etc. The interoperability protocol goes a step further on this basis, involving deeper data processing, consensus and verification, ensuring consistency and compatibility between different blockchains from the blockchain system level. However, in actual use, these two concepts are often mutually complementary and can be replaced by each other depending on the context.

  The connotation of chain abstraction includes the interoperability of blockchain, but the usage context adds a layer of experience improvement on the user and developer side, which is related to the intention narrative that has emerged in this cycle. The combination of intention and chain abstraction will be explained below.

  2. What specific issues does chain abstraction include?

  1) How to achieve chain abstraction?

  2) Why should we pay attention to the combination of chain abstraction and intention?

  How to achieve chain abstraction?

  Different projects have different understandings and entry points of chain abstraction. Here we divide them into the classic school that evolved from the interoperability protocol and is closer to the developer-side abstraction, and the intentional school that combines the emerging intentional architecture and focuses more on the user-side abstraction.

  The history of the classic school can be traced back to Cosmos and Polkadot, which were born much earlier than the concept of chain abstraction. OP superchain and Polygon Agglayer are rising stars, currently focusing on liquidity aggregation and interoperability within the Ethereum L2 ecosystem. Layerzero, Wormhole and Axelar, which originated from cross-chain communication protocols, are also expanding to more chains and striving for more customer adoption in order to enhance their own network effects.

  The intentional school includes L1s such as Near and Particle Network, which are committed to providing chain abstraction comprehensive solutions, as well as component classes that start from solving specific problems. Currently, DeFi protocols are the main ones, represented by UniswapX, 1inch and Across Protocol.

  Whether it is the classical school or the intentional school, safe and fast cross-chain and friendly interaction are at the core of the design, including but not limited to a unified user interface, seamless cross-chain of dAPP, gas sponsorship and management, etc.

  

  Why should we care about the combination of chain abstraction and intention?

  "Intent-based xx protocols" are emerging one after another. This section will explore the reasons and potential for them to become a popular product architecture.

  Similar to abstraction and modularity, intent is not a native concept of Web3. Intent recognition has existed in the field of natural language processing for decades and has been widely studied in human-computer dialogue.

  When it comes to intention research in the field of Web3, we cannot do without Paradigm's famous paper. Although similar design concepts have been reflected in products such as CoWSwap, 1inch, and Telegram Bot, the core of the intent architecture was formally proposed in this article - Users only need to specify the expected results, without caring about the process, and the complex process of achieving the task is best outsourced to a third party. This is consistent with the improvement of user experience that chain abstraction focuses on, and provides a more specific solution.

  There are many classifications of chain abstraction architectures on the market, and the more well-known one is the CAKE framework (Chain Abstraction Key Elements) developed by Frontier Research. This framework combines the intent architecture and divides the various technologies and solutions that make up the chain abstraction into permission layer, solution layer, and settlement layer. There are also other frameworks that make fine adjustments on this basis, such as Everclear, which adds a layer of clearing function between the solution layer and the settlement layer.

  

  Specifically:

  • Permission Layer: The core is account abstraction, which serves as the user entrance of dAPP to request intent quotations - users express their intentions

  • Solver Layer: Generally, it is a third-party solver layer under the chain, used to meet user intentions - solvers compete for orders

  • Settlement Layer: After the user approves the transaction, oracles, cross-chain bridges and other solutions are called to ensure the execution of the transaction - users get the expected results and solvers get paid

  The solvers in the solution layer are a group of third-party off-chain entities, which are called solvers, resolvers, searchers, fillers, takers, relayers, etc. in different protocols. Solvers usually need to pledge assets as margin to qualify for competing orders.

  The process of using intent products by users is similar to filling in a limit order. In the cross-chain scenario, in order to satisfy the user's intention as soon as possible, solvers usually advance funds first and charge a certain risk fee at the time of settlement (this model is similar to a short-term loan, loan term = blockchain state synchronization time, interest = service fee).

  Comprehensive intent solutions represented by Near hope to combine the permission layer, solution layer and settlement layer into a unified infrastructure product. It is currently in the early stages of proof of concept and it is difficult to directly observe and evaluate its utility.

  Component intent solutions represented by cross-chain DeFi protocols have shown obvious advantages over traditional cross-chain models (such as Lock & Mint, Burn & Mint). As the flagship product of Across Protocol, Across Bridge's intent-based architecture enables it to have first-tier speed, low prices, and charging capabilities among cross-chain bridges in the EVM ecosystem, and its advantages are particularly evident in small cross-chain scenarios.

  

  

  

  From the roadmap, Across Protocol will launch a cross-chain intention settlement layer in the third phase. ERC-7683, jointly proposed by Uniswap Labs and Across Protocol, attempts to lower the entry threshold for solvers through standardized intent expressions and build a universal network for solvers. Many component products may gradually move towards the final form of chain abstraction in the form of puzzles.

  3. What are the problems with our understanding and practice of chain abstraction?

  1) What problems does Infra-basedness bring?

  2) What other issues are worth thinking about about chain abstraction?

  What problems does the Infra standard bring?

  As the leaders of interoperability protocols, Layerzero has raised 290 million yuan in total, and Wormhole has raised 225 million yuan. The billions of FDV and low circulation make their tokens the representatives of the VC coins that have been criticized in this cycle, which has dampened the market's confidence in the chain abstraction track.

  Back to the cartoon at the beginning of the article, chain abstraction projects each have a technology stack and token standards. In a market environment lacking external increments, they are inevitably criticized as empty infrastructure. The data gap before and after the Layerzero airdrop also made the market doubt the real demand for "cross-chain communication".

  

  In the ERC-7683 forum page, facing the doubts that the cross-chain asset transfer function is too small, not universal enough, and does not support enough ecology, developers discussed the responsibilities of the ERC standard itself. Supporters of minimalist ERC believe that the tool-level standard is sufficient to solve the current problems and can be combined with existing standards, and the resistance to adoption will be relatively small.

  Considering that the design concept of intent architecture is largely application-oriented, "universal, full-stack, compatible" protocol standards sometimes become "too general to be meaningless" and "too large to solve practical problems", resulting in an ironic phenomenon - the chain abstraction protocols that were created to solve the fragmentation problem themselves deliver fragmented solutions.

  

  What other issues are worth thinking about about chain abstraction?

  • For new public chains/long-tail public chains, chain abstraction increases the difficulty of retaining TVL (analogous to the impact of globalization on underdeveloped regions). What impact will this have on the adoption of chain abstraction?

  • A study by Variant pointed out that UniswapX will lead to a new situation where long-tail tokens are directed to AMMs and mainstream tokens are more filled through off-chain solvers. Is this the development trend of DEX in the future? Will a global solver layer be superimposed on the global liquidity layer in the future?

  • In addition to DeFi protocols, what form might other intent-based product architectures take?

  • Will chain abstraction become a hot topic or a big bubble after modularization?