[Development Focus Series] — Ep.5 — Unlocking Seamless Cross-Chain Swaps: OraiDEX Introduces Universal Swap Protocol
Earlier this year, OraiDEX introduced Universal Swap with the goal of achieving seamless interoperability as a fundamental objective. This feature shows the continued commitment by the team to improve UX and reduce frictions that may deter both new and veteran DeFi users from experiencing Oraichain’s unique offerings. As expansion of Universal Swap accelerates, this innovation is set to streamline cross-chain swaps, enabling users to effortlessly exchange assets across sovereign EVM and IBC networks.
The Universal Swap feature serves three primary purposes:
- To offer “one-click” cross-chain swaps
- To unite fragmented liquidity across multiple networks
- To set the foundation for AI-enabled multi-chain DeFi strategies
Onboarding remains a challenge for new Web3 users and can be overwhelming when faced with a wide range of networks, wallets, tokens and applications to choose from. Even experienced users must discover new tools and learn new skills to navigate unfamiliar ecosystems. Today, we’ll have a closer look at this Universal Swap and highlight its benefit for both individual users and the blockchain ecosystem as a whole.
“One-Click” Cross-Chain Swaps
The goal is to deliver a premium cross-chain trading experience. In order to achieve this, we are putting user experience as the number one priority, minimizing the Time-to-Value by reducing the number of steps it takes for a user to reach their final destination. The Universal Swap feature is specifically designed to alleviate the pain points associated with manual asset bridging.
Typically, liquidity exists in separate pools on either side of an asset bridge. Depending on the networks involved, this may mean interacting via completely different applications and even wallets in order to swap. Contract approvals. Gas fees. And since every additional step introduces increased potential for user error, every one of these transactions is “high risk”. In the worst case scenario, the user may never reach their destination at all.
By comparison, Universal Swap dramatically reduces the opportunity for human error, making the exchange easier than sending a transaction to another wallet. This innovation empowers users to bypass the intricate manual process of transferring assets between different blockchain networks, allowing them to simply swap between assets while all the hard work happens in the background via secure smart contract logic. But how is this achieved?
Uniting Fragmented Liquidity
Total Value Locked (TVL) has long been considered the primary measure of success for blockchain ecosystems, but as the age of siloed liquidity comes to an end, interoperability steals the show. While OraiDEX is proud to feature assets native to Oraichain, the desire to increase optionality for traders must be balanced against the necessity of new AMM liquidity pools. Redundancy for the sake of TVL may actually do more harm than good, leading to a fractured user experience.
A significant achievement of the Universal Swap protocol is its ability to unify fragmented liquidity dispersed across diverse blockchain networks. This achievement simplifies the user experience while broadening the scope of OraiDEX’s services. The protocol’s versatility will soon be demonstrated with the listing of BNB and ETH, allowing users to quickly swap from BNB chain and Ethereum, respectively, to Oraichain mainnet in one-click.
The Mechanics of Universal Swap
To comprehend the mechanics of Universal Swap, consider the process of swapping ETH on Ethereum for AIRI on Oraichain mainnet. For users, this process appears as a seamless, one-step transaction.
Behind the scenes, the protocol orchestrates a series of steps:
- ETH is swapped for ORAI on existing Ethereum-based liquidity pools;
- OraiBridge transforms ORAI (ERC-20) into ORAI (native);
- ORAI (native) is then exchanged for the AIRI (native) on the Oraichain network.
Wallet Compatibility
OraiDEX places a strong emphasis on user convenience, evidenced by its wallet compatibility features. The OWallet interface enables users to manage all their assets across many networks seamlessly in one place. Additionally, users looking to trade assets on EVM networks can connect their MetaMask wallet, while those engaging with the TRON network can utilize the TRONlink wallet. Notably, while these wallets are optional, they are not essential. OWallet empowers users to import accounts from all supported EVM and IBC networks, ensuring a flexible and user-centric experience through a single touch point.
Empowering AI Builders and Developers
Beyond its impact on individual users, Universal Swap holds significant implications for AI builders and developers on the Oraichain network. The protocol’s lays the foundation for deployment of advanced multi-chain DeFi and trading strategies, leveraging AI and low-code capabilities for enhanced efficiency. This convergence of AI-driven solutions with cross-chain functionality opens doors to automated trading and innovative financial strategies, nurturing the growth of the DeFi ecosystem.
As OraiDEX continues to mature, Universal Swap emerges as a liquidity aggregator across multiple chains, providing a platform for listing an array of assets, regardless of their origin chain. This expansion paves the way for the integration of blue-chip assets and community favorites, offering traders opportunities to diversify, take advantage of cross-network arbitrage opportunities and explore new ecosystems. AI-based products, such as Orchai, can further extend the reach of OraiDEX, pushing Oraichain to the forefront of the multi-chain DeFi movement.
ETH and BNB will be listed on Universal Swap in the near future. As always, we appreciate community feedback and look forward to input from our DAO. If there is an asset you’d like to see listed on Universal Swap, let us know in the comments below!
About Oraichain
Oraichain provides multidimensional trustworthy proofs of AI and enables secure integration with Web3. With AI as the cornerstone, Oraichain has developed many essential and innovative products and services including AI Oracle, DINO Hub with DINO Center, AI Marketplace & Data Marketplace, fully on-chain VRF, AI-based NFT generation & copyright protection, Royalty Protocol, AI-powered Yield Aggregator Platform, Cosmwasm IDE, and many more. Oraichain is the world’s first Layer 1 of AI oracle and Trustworthy Proofs™️.
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