Clearing Layer
Clearing Intents
There are dozens of active L1 blockchains and with the advent of rollup services, the number of L2 chains has exploded. Reducing the tradeoffs of moving crypto across chains unlocks value for all chains, improves user experience, and creates tighter spreads for users. These are all features dearly needed to grow the users, apps, and protocols built on top of these blockchains. Bridges are the ways in which users can move assets and liquidity across chains. This is vital to price stability on-chain and more importantly, competitive price spreads for consumers. Current crypto bridges face a trilemma between being fast, cheap, and permissionless.
The three types of bridges:
Custodial Bridge: Using a CEX like Coinbase or Binance to bridge is instant and cheap, but not permissionless.
Permissionless Bridge: Hyperlane, Portal, Hop, or LayerZero are somewhat fast, but not cheap. They can be permissionless, in which liquidity providers take a fee, or depend on trusted minters to create wrapped canonical assets (which are not trustless and unnecessarily creates more assets).
Intent Bridge: Current solutions are permissionless, but are often slow and not significantly cheaper than permissionless bridges because of rebalancing. They also are limited to high volume tokens.
Intent bridges have the possibility of solving the trilemma, but face issues of liquidity fragmentation, lack of standardization, and rebalancing costs.
Everclear’s Clearing layer is designed to fix all these and dramatically reduce the friction of moving between chains, lower costs for app builders and users, and simplify the user experience for developers and users.
Intended Consequence
Intent bridges take advantage of the insight that 80% of cross-chain volume is “netted” within 24hrs, meaning that across all chains, for every dollar that leaves a chain, 80 cents returns within 24hrs. There is always volume going in and out of chains, but for 80% of it, the net volume ends back where it started.
Intent protocols take advantage of netting by swapping liquidity on each chain rather than bridging. For example, if a protocol like UniswapX has one user swapping $100 from Arbitrum to Polygon and another swapping $100 from Polygon to Arbitrum, UniswapX would instead just allow the two users to natively transfer the tokens to each other, which is magnitudes cheaper than bridging traditionally.
The core problem that Everclear solves is that this perfect match rarely happens. When it does not, the protocol has to “rebalance” by moving the residual the slow way through traditional custodial or permissionless bridges. This is slow, complicated, and expensive.
Net Positive
The main stakeholders in intent bridging are:
Chains (Permissions), who want integration with bridges, which is a typically lengthy process
Protocols (Auctions) who have the orderflow of intents, but are limited to their own orderflow
Market Makers (Solvers) fill the intents on certain chains, but have no efficient way to rebalance
Everclear is the silver bullet that standardizes this process for everyone. On each chain, Everclear has deployed standardized contracts, where users can generate an “invoice” of their intents, which solvers can balance against each other. If no one takes an invoice after a certain amount of time, a dutch auction begins for the invoice. For example, if a user has an intent of moving 10 ETH from Arbitrum to Polygon and no solver initially fills the request, the intent gets discounted to 9.99 ETH, then lower, until a solver fills the invoice.
This standard benefits all stakeholders and creates a permissionless system that aggregates the orderflow of apps, gives market makers more orderflow to maximize netting, and works with any chain with this standard set of smart contracts.
Partnerships
Everclear intends to benefit everyone; existing stakeholders get a standardized system that virtually guarantees that intents eventually get filled, and users get more competition fighting for their orderflow which cuts prices. This also means that the more stakeholders that sign up, the more efficient this market becomes.
With this in mind, Everclear has already partnered with countless stakeholders, like aori (rebalancer), StaFi Protocol (L2 liquid staking and staking app), Tokka Labs (rebalancer), Renzo (liquid restaking), Anera (rebalancer), and many more.
Mainnet Launch
Everclear is the first Clearing Layer that coordinates the global settlement of order flows between chains, solving liquidity fragmentation for modular blockchains. Everclear’s Mainnet launched yesterday (September 18). To learn more and get involved, check out their blog for details to learn more or participate.
- Paul Veradittakit
DIGESTS
Three Ways DeFi Will Revolutionize Financial Services
DeFi is poised to create a future where financial services are digital, open, always-on, and borderless, says Bill Barhydt, CEO, Abra.
Forget Meme Coins, Crypto Utility Is Already Here
Meme Coin Mania has many wondering if crypto will stop the nonsense and deliver real use-cases, but crypto utility is already here if we simply look, says David Zimmerman, a research analyst at K33 Research.
BUSINESS
Massive Twitter Hack Tries, Fails to Promote Crypto Scam in 'Most Incompetent' Hack of the Year
Numerous high-profile brand and celebrity accounts were hijacked to promote a Solana token called HACKED. It didn't go very well.
BitGo Takes On Coinbase and Tether With USDS Stablecoin Launch
Crypto custodian BitGo just launched a new stablecoin, USDS. Will it find a place in a crowded market dominated by Tether and USDC?
REGULATION
DeFi Lending Platform Rari Capital Settles SEC Charges
Rari misled investors and offered unregistered securities and broker services, the SEC alleged.
SEC’s Crypto Record Rebuked by Ex-Commissioner, GOP Lawmakers in Hearing
The U.S. securities regulator took a beating in a congressional hearing that was weighted against it, with a witness list of critics calling out the SEC for its fight against crypto firms.
NEW PRODUCTS AND HOT DEALS
Decentralized AI Society Launched to Fight Tech Giants Who 'Own the Regulators'
Eight founding member projects include Morpheus and Filecoin Foundation, with Michael Casey, CoinDesk's former chief content officer, as chairman of the new industry group.
Hemi Labs Closes $15 Million Funding Round Led By Breyer Capital and Binance
Hemi Network aims to support applications that interact with both Bitcoin and Ethereum.
LETS MEET UP
Walks and coffee meetings in San Francisco throughout the year!
ABOUT ME
Hi, I’m Paul Veradittakit, a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.
If you have an projects that need funding, feel free to DM me on twitter.