Cross Chain Connectivity for New L1's Cronos Case Study Ken Timsit

okay so i'm really happy to be here uh thanks for joining thanks for traveling all the way here let's also say hi to the people listening on the live stream so i'm ken timzit and i work on the kronos project what is chronos chronos is an evm compatible layer 1 blockchain that is backed by crypto.com so why does crypto.com back layer 1 blockchains we'll talk about that but more importantly in this room we have ethereum developers and so i'm not just here to pitch chronos i'm here to talk about how you as a dap developer can start thinking about this multi-chain world that is coming upon us how you how to understand the various types of bridges that those layer one blockchains offer to you as a depth developer and how you can take advantage of that to offer a multi-chain experience to your users so i'll give some context about chronos and then the bulk of the presentation will be about cross-chain connectivity what are the options available to you and what have we learned as an l1 by you know through the process of implementing those bridges so in 2021 100 200 million people have purchased a crypto for the first time it's it's kind of mind-blowing when you think about it and of course the majority of those 200 million people have purchased their first crypto through a centralized exchange so now what is happening with those users uh you have a bunch of centralized exchanges who have started to think about how they can start bringing those users to the full web 3 experience the full self-custodial experience and why are they doing that why are they not hoarding users they are doing that because they believe in web 3 they believe in the promise of decentralization and in the innovation opportunities that this creates and so you know chronos you know like bsc to some extent like other chains that are backed by a centralized exchange you know is here to take those hundreds of millions of users who are centralized exchange users and bring them to web3 therefore to your apps so that you can offer to them the full web 3 experience and so that's that's why we're here and that's why chronos was created so if you look at chronos under the hood what is it so it's an evm compatible blockchain it's used it's built using the cosmos sdk so the cosmos sdk is an sdk that allows you to create all kinds of blockchains for all kinds of applications and you know among those applications you can decide that you're going to build an evm that reads and executes smart contracts and so what's that's what ether mint which is the underlying technology is about and ethereum has been used to create chronos so kronos is a poa chain so there are currently 26 validators with more to come each validator has some staked tokens that represent their uh share you know their voting power within the consensus and you know because it's a poe chain the chain has small block times it's around five to six seconds low transaction fees and of course a narrow a small environmental footprint as well so chronos chain is is live since november 2021 and so everything is going well so far and that's why we thought the time was right to tell you a little bit more about that project because chronos is evm compatible and built on the co on the cosmos sdk it is uh compatible with two very important ecosystems within your blockchain and web 3. so on one hand it is interoperable with all the other evm networks so ethereum bsc avalanche polygon arbitrary and others and that means the bridge technologies that are evm compatible work with chronos but also of course all the smart contracts and the tooling that you are used to as an easy developer you can use that on chronos and also it is competitive it is interoperable with the cosmos ecosystem which you know around the world and particularly in asia has gained a tremendous amount of traction with communities that have rallied around specific use cases for blockchain such as payments and others and so as a as a dab developer like why do you use why why should you be interested in those alternative l1 and in chronos in particular well you should be interested in them first of all because uh they are interoperable with other ecosystems and so if you want to offer defy solutions that capture you know holders of a cosmos token or holders of a token that exists in the ethereum world you can take advantage of that but more importantly the other reason why you are you should be interested in chronos is because it is a logical gateway for those tens or hundreds of millions of new crypto users to start experimenting with defy nfts and developers of course it's low friction i mentioned that before and all those factors have contributed to tremendous traction since we launched chronos so we are today at 2.5 billion dollars of total value locked so it's the ninth largest blockchain in the world when measured by tvl we are at around 200 000 transactions per day today 350 000 unique wallets and so things are going well and so for you as a dab developer it means that you can ride the wave of an ecosystem that has traction and investment behind it yet is not too crowded and you know is still a place where you can have visibility as a web developer on this page there are some examples of dapps that have deployed on chronos already i'm not going to describe them in detail uh just know that today there are around 100 apps that have deployed on chronos so those include defy apps dexes decentralized lending protocols etc a few nft collections and marketplaces and of course there's also the whole range of developer tools and infrastructure that you can expect as a dab developer so melee mask works with chronos truffle and ganache and hard hat work with chronos all the smart contract libraries that you are used to can be deployed with no change on chronos the ether gs and with 3gs libraries work on chronos and over time we are going to also deploy all the tools like so indexers noisy safe all the high quality rpc endpoints that you can expect and need as a developer so uh how does chronos connect to the rest of the ecosystems there are various bridges religious technologies that are in place that i'm going to talk about what's you know the starting point for us is that in order for people to build defy solutions that have low transaction fees and are easy to access for mainstream users you know first we need to have all the tokens that people are used to trading you know present with significant liquidity on the chronos chain and so for us you know that was the first step so you know wbtc w eth uh all the main stable coins you know all those uh tokens are available on chronos with you know each between 30 million and 700 million dollars of liquidity and so for us uh as a layer one that was really the first challenge in terms of you know building an ecosystem that that developers could rely on to create defy solutions then when it comes to connecting those tokens to other ecosystems there are many considerations at play so the first consideration is are you when you're creating a bridge are you locking liquidity on one side of the bridge and then minting new tokens on the other side of the bridge or are you taking advantage of existing liquidity that exists on both sides and simply incentivizing liquidity providers to facilitate instant trades for the users leveraging tokens and liquidity that already exist on both sides the second consideration that you need to take into account is of course what are the trust assumptions that are a part and parcel of the bridge that you are working with or partnering with in your case and so you know there's a bunch of uh great articles that were posted by the founder of connext arduino about that and he talks about the interoperability trillium now if you haven't read that i really encourage you to have a look at those articles but they explain really how it's really hard to be at the same time a bridge that is trustless that can convey any kind of message and that can work with any kind of chain and so in most cases you have to do trade-offs between those three dimensions and finally there's a very important consideration as well which is to what extent is the dap easily composable for that developers what i mean by that is of course a bunch of bridges are front ends so if you are an end user you are going to use those bridges to transfer your tokens from one chain to the other however for you as a web developer what matters is really how you can use those bridges under the hood and therefore to what extent are there apis and sdks that you can leverage as a web developer so that the experience for your users is seamless and in some cases they don't even know that their trades went through a bridge and so you know there are several models that we've deployed and are in the process of deploying and i just want to share with you what those models are so that you understand the trade-offs that we're making in each case so the first model is the centralized bridge it's a model that we are able to leverage because we are partnering with crypto.

com and so it's a model where really it is crypto.com that is that you have to trust in order to believe that the tokens that you have on chronos have a value and are redeemable for the equivalent token on ethereum or on another chain so the way that a centralized bridge works is simply that as a user you deposit tokens to your crypto.com account you know they are custody by crypto.com you then withdraw it to another chain and the advantage of doing that is that it's cheap and instant and once it's done then those tokens have the legal status of ious if you if you will uh so that that means it's meaning that those tokens have the value uh that is attributed to them by the fact that you know crypto.com is saying whenever you come to me with those tokens i will read them for their equivalent value in a crypto.

com account or in the in another chain and so the advantage of course is that it's a model that is extremely easy for us to to deploy uh it's also a model that works with any chain right so that's why we've been able to create tokens on chronos that are interoperable with ethereum and cosmos but also we're in the process of deploying tokens from unrelated ecosystems uh more recently that was the polkadot token with others that are underway in terms of trust well you know so i've put under on the right uh on the top right corner some of the trade-offs that you might want to consider here but in terms of trust uh well it depends a little bit on whether you trust that a centralized exchange is trustworthy or not or you know whether it's risky or not to trust them of course they are centralized on the other hand their reputation is at stake if they don't make good on their promise so that's a consideration to have the main drawback of this technology of course is that uh it's not composable at all right so you can't uh seamlessly integrate it with the chain of smart contracts uh in order to integrate it with your app uh there's always at some point the need to go through a crypto.com account and therefore that creates a break in your user journey the second type of bridge is what we call native bridge so broadly speaking a native bridge is a bridge where the value of your tokens on the destination chain and the you know the absence of double spending are guaranteed by the same consensus as the consensus on the destination chain meaning all the validators on chronos are you know are coming to a consensus that you uh um own the tokens that are registered on chronos and uh all and all the validators on kronos are coming to a consensus that the same amount of tokens has been locked in the origin chain in this case the ethereum magnet so in the in the case of the the gravity bridge which is the technology that we're implementing to establish a bridge with the ethereum net uh the the workflow is shown on this slide i'm not going to describe it in detail i will publish the slides later on but broadly speaking the way it works is that you have a smart contract on ethereum that smart contract knows the signatures of all 26 validators of the chronos chain and so the consensus of the chain is registered on ethereum mainnet and then what happens is if you want to transfer from ethereum to chronos then you simply ask all the chronos validators to listen to events on ethereum and whenever two-thirds of them see that some tokens have been locked in the bridge contract then they all come to a consensus to mint the equivalent number of tokens in the destination chain and you know when you're looking at the other direction the way it works is that you're sending your tokens to a special smart contract on chronos all the validators on chronos are testifying that those tokens have been locked and because their signatures are registered and recognized on ethereum mainnet the smart contract that is on the main net is able to unlock the liquidity that was previously locked at the deposit stage and so of course again this is a model that is for us very easy to implement because we can embed it directly in the protocol however it's also a model that is highly trusted in the sense that you only need to believe that the validators on chronos are trustworthy in order to guarantee the value of your tokens on chronos on the other hand again it's not very composable it's not easy to integrate into other dapps and so that's clearly one of the downsides that we have to deal with the third model is what we call peer-to-peer bridge so an example of that is connects yeah two minutes left so the technical principle behind a peer-to-peer bridge is very similar to that of hashtag lot contracts for those of you who know them so the idea behind the peer-to-peer bridge is that when you want to transfer tokens from ethereum to kronos for example there is one router who is going to be assigned and say i take the responsibility of fronting the liquidity for the user on chronos and in exchange i will wait to get paid later on after the transaction is completed on ethereum with equivalent the same amount of tokens and so those bridges that are called peer-to-peer are trustless in our ecosystem are highly regarded because they make very very little trust assumptions however what we've seen is that they have yet you know they so far haven't had as much traction as other types of uh of bridges and so there's really a and so i think what we've learned is that although they work really really well we can't simply rely on that particular solution for all bridges and finally the bridges that are by far the most commonly uh used by users today aside from the native bridges and those are the bridges with external consensus and the way that those work generally is that you have an intermediary chain where validators are putting a stake those validators are the ones who are taking the responsibility of confirming that some tokens have been locked under origin chain and therefore can be unlocked on the or or minted on the destination chain and in order to for that transaction to take place you are relying on the fact that those validators don't have an incentive an economic incentive to take your tokens away and so of course that trust model is very is rather risky uh when you're on l1 because it means that you have to rely on the consensus of another chain but again we've seen that those chains those bridges are extremely widespread they have by far the highest total value locked and so we can't dismiss them outright we have to consider them and engage in security reviews where so that's it for today thanks for your attention i hope that's helpful