Is Chain Abstraction Solving Anything | Altan Tutar - Nuffle Labs

[Music] one of the founders of nuff Labs so nuff Labs is a stake from anywhere solution which essentially allows you to stake tokens from any L1 any or L2 to igir but what I'm going to talk about today is something that ethereum Community has been working around for a while and I'll deep de Deep dive into the question of is chain abstraction solving anything so we talked about this last year I was actually giving a presentation on this one there were roughly like 40 different l2s at that time but if we go now and try to count them I think it's like 100 plus uh we're also seeing a lot of like new evm l1's come into the game like bar chain and story just launched last week um and we also have another evm coming in which is monad but interestingly like um we also seeing a lot of lvms which is I've seen the eclipse guys today but uh we seen a lot of like Solana VMS being sort of taken to ethereum as an execution environment and we even have things like movement which is a side chain uh to ethereum as a as a move VM and things like fuel which is coming from the ethereum community but started to build their own sort of execution environment just for uh just for scaling uh rollups so what I call this is kind of we're getting this like blockchain salad uh and that's kind of like a ver salad that you see um the problem with this is that you have multiple wallets multiple assets and it's really hard for uh for users to manage all these chains um so this is something that uh we've been like looking very closely um so Community First Response it's been chain abstraction it's been one of the most dominant discussions we've seeing since 2024 um one thing that I've observed over the last year is that well users are no longer tied to a single chain uh we also saw a lot of sort of growing user overlaps between ethereum and l2s ethereum and Solana um but but when I go to folks and ask what chain abstraction is the definitions quite vary like some people talk about uh unified balances some people talk about bridging some people talk about intents so I wanted to Deep dive and see what like what people are um sort of when you ask that question what's chain abstraction how people respond so one of them is um I took some tweets to just explain cuz most of the conversations take place in Twitter about chain abstraction um one guy said well chain abstraction is all about unified experience es to simp simplify multi-chain interaction so it's basically merging all your access passes at Disneyland into one big pass I like that definition so I just wanted to put there um the other one is hitting the complexity from users um so if you're moving from one chain to another obviously uh you don't want to see all the all the complex interactions uh some some chain abstraction tools are allowing you to do this where you can just come in uh you can use one front end and you can you can swap the other thing is which is Ilia whom I used to work with at near um it's this concept of unified account balance uh which I'll explore later too which is quite exciting where you have usdc in a bunch of different chains uh you don't want to just like aggregate all of them to one chain and then do a transaction instead let's imagine a product that can do a swap from usdc to salana but the usdc can come from any L2 any L1 and you do that you do that swap but overall like if you look at these different Coes you can play with grock get like seven eight different definitions as well but one of the most important things is obviously just it allows you to simplify multi-chain interactions which is something that um obviously ethereum Community is working on um so there's been a lot of sort of attempts to basically make sense of it all uh because there's a lot of companies there's a lot of products that working on chain abstraction uh one of the things that uh I was actually one of the uh attendees in a couple of uh workshops as well is this cake um sort of framework uh you can divide this into sort of four different components let's say layers cuz we like layers in crypto um so application layer which is essentially the the sort of the interaction layer the front front ends um that people's interact or the mobile apps that people interact you see this uh sort of different variations of different um user sort of experiences you obviously have the permission layer which is accounts sort of key team Management's policies and intents which all of us have been um sort of discussing for a while now uh you have the solver lay that takes the intent and does something with it so it's if in an order book it fulfills the request and finally you have the settlement layer which is final transactions and and the bridging that needs to happen basically clearing in almost like quote unquote clearing and traditional Finance um obviously you would think that this would fragmentation but if you look at obviously this Market map you see that there's a lot of companies or protocols that are trying to do do similar things and they all have their own flavors right so they for example if you look at order flow there's 22 different ways to um do different orderflow through different protocols and just like what we did with a lot of if you look at the tech history we had a problem we created a bunch of different standardizations and then now you have different standardizations that are competing and if you look at traditional sort of tech history that's been usually a problem and um what I think is that it's actually making this problem a bit worse um and you see this all the way through in crypto right you have layer ones uh that were having problems with scaling to do that there were new layer ones that's been launched obviously rollups on ethereum have been emerged which ended up being a lot of bridges and those bridges led to fragmentation of liquidity and with these liquidity obviously you saw a lot of bridge bridge aggregators coming and trying to solve the problem and I think that chain abstraction has a very very sort of promising future but we should not repeat that same pattern um this is an interesting I I brought off there's been a couple of discussions around does train abstraction solve really anything right so we had this we' started with the fragmentation are we solving really anything um I think it's a common criticism but I want to kind of point out to some products that are quite interesting that is solving the uiux problem um that the first I think it's the first sort of the problem that um train abstraction is trying to solve but then I'll sort of portray a picture how uh chain the future of chain abstraction should look like so first um this infinex experience um that I really like essentially if you're a multi-chain user and you have to you want to basically swap one token to another let's say from Solana to arbitrum you can actually do this in infinex in a couple of seconds um which is quite interesting um so we didn't have this experience before obviously you have stuff like portal and others but quite love the experience so definitely go and check it out I think it's it's something interesting uh the other one is universal X I know I see Tasco here which is one of the chain abstraction K's um which is quite interesting too well you can do Crest train swaps but what if I said the experience before you have usdc in all different chains I actually did a swap today that $95 has been I think I swapped it to arbitrum this morning um your USD could be on different chains and you just come in Click and actually buy op I bought op apparently um and then I bought op uh in in a couple of matters and matter of seconds it settles quite nicely and uh for like small transactions it's it's amazing and you have near intense which is very personal to me because I worked at near uh one of the problems that we had as an as an ecosystem was that when near launched in 2020 that was the rainbow bridge between uh near and ethereum that took almost like 8 hours to sync which was a bit of a problem if you want to go to ethereum now you have intense solving that problem to uh in a matter of seconds you can swap near to salana tokens ethereum tokens so I would say like cross chain um chain abstraction solved some of the ux problems that we had on Cross chain swaps uh but I think we can like there are certain things that we Overlook which is evm which this community has created um evm is one of the things that people have been discussing in Twitter over yesterday whether if you're launching an evm Al tour or an evm one are you actually um doing something with ethereum I would say like evm has been great to Outsource some of the work that ethereum wasn't able to do on ethereum L1 do some of the experiences outside like for example monad is a great experiment and take them back to ethereum to scale the L1 scale the L2 um but overall like we underlook the premise of evm I think there's certain things like working at an ALT VM you know you get technical familiarity if you have new devs that are coming to the ecosystem um there's a lot of uh Tech technical work that's being done with the ethereum community new devs or like um or some devs that are coming from ethereum to another L1 uh you can actually leverage a lot of smart contracts which is interesting uh there's obviously economic advantages right so the shared liquidity that we're seeing with a lot of like the AG has been putting work there's a lot of ethereum community has been pushing uh towards this um economic advantage of it and um evm has played an amazing role to be able to inop different different layers and obviously reduce fragmentation I'll mention some of thec as well but overall historically rc20 RC 721 all these standardized um sort of um you can take these and then deploy to a new chain and it works usually it works um to uh to the new chain as well which is quite exciting and I think something we should look forward as an as ethereum Community um one thing that actually attracted my attention last week um ethereum Foundation um published this work which is open intense framework uh so it is some sort of solving this problem of reing too many of the chain abstraction uh oranization what if somebody comes in and agrees with all the parties like you know Stark net polygon arbitrum to have one open intense framework uh I think it's pretty promising to um sort of unify uh ethereum L1 L ethereum L1 and L2 landscape uh this is ERC 7683 um so quite exciting right we we start with a sort of a one standardized way to do intents uh which is something that the community has been working on for a while um so where does it take takes us next I think cross chain swaps are pretty interesting uh but defi has been mainly focusing on sort of the fighting for the same eth so every al2 came in they basically did some incentives got some eth and then when the incentives run out um the ethereum just left at L2 but what I want to focus on as as a builder is to top 20 assets have been sort of almost remain unutilized right if you look at um and I give this analogy ethereum is like you're up in the 1500s where you have the advanced technology but resources need to come resources there's resource constraints on like gold and others so I think ethereum can go other sort of blockchains get some of these assets and make them usable in like Landing or other markets um so I believe like the future of defi lies in bring those assets uh to the ethereum L1 and L2 and make them usable and I think chain abstraction is the the way to do it right so you had cross chain swaps but what if you have cross chain lending and borrowing all these sort of quote unquote Structured Products that you can create in defi that could sort of take some of these assets uh that historically have been sort of subject to chain racism but now you can you can pretty much get that liquidity in and use it in Moro or other permissionless markets um so I draw this picture it's very basic way to look at top 20 assets um the pricing might have changed I know the market caps have been moving slightly over the last sort of month or so but these are all assets that are pretty much almost like no smart contract utility didn't have for example Bitcoin xrp has some but Doge has been you know it's almost a fork of Bitcoin um and when you look at them like defi utilization rate is drastically low compared to ethereum like ethereum sends something around 16% and when I say defi utilization rate it's a very basic metric you can go even further and make it more complex but I just took literally like tvl divided by market cap and ethereum sits at 16% but once you look at chains like Bitcoin now it's 1% I know Bitcoin defi has been taking off we see Lombard BTC on ethereum L1 being used in more for in AA markets but assets like xrp Doge these are very open like uh that's something that is interesting to take these into more deeper markets like ethereum and give them usage um so that basically users come to ethereum L1 come to ethereum L2 from different other chains and make them basically use the asset here rather than bootstrapping their own liquidity bootst in there on which ethereum has been working on for for ages so so the question is chain abstraction solving anything I think we've had a like sort of a solid foundation with some of the tools that we build intents Bridges message passing Technologies they weren't there last cycle like layer zero was just about to come to the market Wormhole was uh was you know getting actually got hacked and got you know worked on getting the security improved I think we're coming to a perspective where we can actually go more than cross-chain swaps and this is mainly that um that we are working on enough uh is to push cross chain Landing is to push all these structur products that can create um and one thing I just wanted to highlight like evm is an amazing tool that we built over time although alms are coming people should sort of experiment with new alt VMS evm has done a great job of you know standardizing most of these the the work that we're doing and I think we can do that with open intent framework too um and essentially we should work towards expend defi is access and sort of create seamless cross chain defi experiences that cross chain uh that chain abstraction should be working on um and ideally we talk about inter propability but it's really about like getting sort of these asset Ed almost Financial inclusively it's a bit of a a term but essentially taking these assets and being used on ethereum to make make ethereum more liquid in a way is I think what chain abstraction should push war um yeah thank you for listening uh so this is nuffle you can follow us at on on X um I'm also pretty active try to be more active these days been working a lot in the background so um my my account is there too and if you scan the C code you can find all the information about nuff as well so five minutes uh we can take some questions about chain abstraction or anything that you guys can uh you guys can jump in I'll try I'll try to hear you but it's yeah it's great so um V4 and Fs and all the work that um I'll actually show you let me see this was part of open intense framework as well so you can you can see the unit chain um it's been great so like the the intense experience that been created by Unis swap has been sort of working with etherum foundation and push that sort of standardization I think is is good for everyone um so intense will become as far as I know will become part of the uni chain and also will probably part of all the ethereum layer to ecosystem pretty much if that's all yeah thank you for listening