CVP Proposal: deBridge IaaS

Approved CVP
1

Introduction

We’re building deBridge and DLN. deBridge is a secure cross-chain infrastructure for high-performance interoperability. By removing the bottlenecks and risks of liquidity pools, deBridge enables DeFi applications to scale faster with ultra capital-efficient and deep liquidity transfers across chains.

DLN is a high-performance cross-chain trading infrastructure built on top of deBridge. DLN pioneered cross-chain intents and 0-TVL design enabling the fastest cross-chain trading of any assets with zero slippage, and without liquidity at risk (0 TVL).

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About deBridge IaaS

deBridge IaaS (Interoperability-as-a-Service) is a turnkey solution for both EVM and SVM blockchain ecosystems, permissionless and permissioned, solving all three pillars of interoperability simultaneously including transfers of authenticated messages, cross-chain asset custody, and native high-performance value exchange.

Features and opportunities include:

  • deBridge Messaging
  • DLN Cross-Chain Exchange
  • dePort Asset Custody

We’re excited to bring these deBridge IaaS features and possibilities to the Metis ecosystem and enable bidirectional interoperability between Metis and all other chains supported by deBridge, facilitating onboarding of liquidity and users for Dapps built on Metis.

Unique Value Proposition for Metis

Bridging solutions under the classical AMM model poses a lot of risks and bottlenecks, especially when it comes to cross-chain capabilities and scaling DeFi as a whole, and we offer a great alternative with notable USPs:

  1. Capital Efficiency
  • Since DLN is not under the classical AMM model, traders incur zero slippage on any order size. Instead, there’s just an 8bps spread (at a market quote). Additionally, the quote shown on the destination chain is a guaranteed rate because there’s no slippage incurred. In contrast, solutions under the AMM model can only show the theoretical maximum that a user can receive, which disregards the slippage tolerance and the amount a user receives on the destination, which tends to be much less than the metric shown. We believe this is an inefficient model and user experience.
  • This capital efficiency also opens up the opportunity for Metis to enable efficient liquidity incentivisation, where the cost of bridging into Metis can be reduced to zero cost as users can be rebated the cost. We’re currently doing this for the Optimism ecosystem with the 100K OP grant we received, more information can be found here: OP Horizon is now live!
  1. Fast settlement
  1. Security
  • Having a 0 TVL model is also a very favorable model from a security perspective, as the risk is not being borne on passively locked multi-million dollar liquidity pools. This means that the attack surface layer of our model is highly minimized.
  • Over time, the DeFi space has witnessed the security risks associated with the TVL model, as they are honeypots at risk of getting drained.
  1. High–performance cross-chain interactions
  • DLN infrastructure allows attaching any call data/instruction to the trade, which the market maker will be obliged to execute at the moment of fulfillment. That opens a whole new spectrum of applications and enables projects to build powerful UX which abstracts away the entire infrastructure stack. For instance, users can initiate a $1,000 cross-chain trade into Metis and have a long perp position opened at the moment of settlement, having this interaction executed in seconds.
  1. Scalability
  • DLN is a much more favorable solution as it’s more rapidly scalable. It’s able to finally facilitate over 7-8 figure orders simply because the model is not capped to the size of a liquidity pool. If there is a significant volume in a certain direction, private market makers will be able to efficiently fulfill that demand as they can re-balance liquidity very quickly, which is not feasible in classical bridges with statically locked liquidity.
  • Liquidity in DLN is also much more capital efficient as takers (e.g. private market makers) have full custody of their liquidity in DLN. This enables a vast range of rebalancing capabilities where liquidity can be reapplied to order settlements to maximize yield opportunities.

Example of a $1 million USDC trade from Polygon to BSC (only an 8bps spread):

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