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Uniswap Labs Across Protocol and cross-chain interoperability provider Proposed new Ethereum A cross-chain token standard for intent to address liquidity fragmentation challenges.
The new standard is subject to Ethereum Request for Comments (ERC-7683) and aims to create a unified framework for defining cross-chain actions in intent-based systems. Intentions are automated interactions on the blockchain based on a desired outcome by the user, minus the need for specific knowledge.
For example, intents can automate the process of exchanging tokens across the chain through an optimal path without requiring additional effort from the user, such as knowing the most efficient bridges and exchanges.
ERC-7683
The ERC-7683 standard is designed around a common cross-chain intent flow while allowing flexibility in implementation details. This flow begins with the exchanger signing a message off-chain, then their request is published to a filler on the origin chain. The request is then filled on the destination chain.
It is worth noting that Uniswap Labs Spotlight They will apply this standard to the cross-platform version of UniswapX, but the ERC-7683 standard is already available for any decentralized application to implement.
Furthermore, the standard allows for customization of various aspects, such as pricing methods, execution restrictions, and settlement procedures. The proposal has been submitted to the CAKE Working Group for discussion and review.
Intent-based systems have emerged as a leading solution for cross-chain end-user interaction, simplifying the complexity and time constraints associated with traditional bridges.
However, these systems face challenges in accessing sufficient liquidity and maintaining active cross-chain staking networks, issues that may intensify as the number of distinct chains grows.
Liquidity fragmentation issue
Ethereum’s layer-2 blockchains address the scaling issues that have plagued the industry for years. However, they also present a new challenge: fragmenting the flow of funds into different, smaller ecosystems.
Moreover, this The problem comes down to the technical level, as each layer 2 of the blockchain processes transactions and arranges them into blocks in a centralized manner, according to Coin Shares Analyst Max Shannon.
Shannon explained that each blockchain maintains its own ledger and set of smart contracts, which leads to a fragmented global state of transactions that negatively impacts liquidity efficiency. He added:
“Addressing the fragmentation issue would provide shared liquidity, gas efficiency, bridgeless connectivity, seamless application upgrades, and facilitate L2 boot and development.”
