The developments made by Router Protocol in recent months have raised the bar for what DeFi users might expect from a cross-chain communication protocol. Router’s one-of-its-kind feature-packed liquidity swapping engine has received substantial support from the DeFi community.
Now, as the TVL in DeFi nears a lifetime high, it becomes even more critical for us to integrate the most widely used Layer 1 and Layer 2 blockchains to facilitate liquidity migration between them. A considerable amount of traffic is currently moving away from Ethereum to chains like Polygon, Avalanche, Fantom, Arbitrum, and Optimism. Progressing on our momentum of having integrated the former three chains, we are elated to announce that Router Protocol has successfully integrated Arbitrum and Optimism into its cross-chain infrastructure, bringing us one step closer to realizing our promise of building a truly interoperable ecosystem.
What makes Optimism and Arbitrum Integrations special?
All of us are well aware of the caveats of operating within the existing L1 blockchain ecosystems. To combat the rising gas costs, increasing transaction latency, and a slew of other impediments associated with L1 networks, various L2 blockchains have come to the fore.
With Optimism raising 150M in a Series B funding round (TVL of $482.08M) and Arbitrum leading the Layer 2 charge with a TVL of $2.3B, it is clear that out of several existing options, Arbitrum and Optimism are currently dominating the space.
Optimism
Optimism is a lightning-fast layer 2 solution built on Ethereum that uses a transaction execution method called optimistic rollups. Optimism has a thriving ecosystem that does not renounce Ethereum’s decentralization or security for improved scalability. Optimism has been live on a public mainnet for over a year and has about $363 million in total value locked (TVL), according to DeFi Llama data.
Arbitrum
Another optimistic rollup of note is Arbiturm. Ever since it came live, Arbitrum has managed to attract a ton of Ethereum dApps to its network. The gas fee required to execute transactions on Ethereum dApps and Arbitrum dApps is so pronounced that a lot of users have already made a jump from Ethereum to Arbitrum, with many more in the process of doing so.
Difference between the two
Now that we’ve learned a little bit about Arbitrum and Optimism, let’s have a look at how they differ.
The core difference between these two blockchain networks lies within the execution of their core functionalities. For fraud-proof validation, Optimism rollup uses single-round fraud proofs, while Arbitrum uses multi-round fraud proofs. This basically translates to more expensive and slightly slower transactions on Optimism compared to Arbitrum, with the caveat that Arbitrum fraud proofs can take up to 2 weeks to finalise. Moreover, Optimism uses EVM (Ethereum Virtual Machine) while Arbitrum has its own runtime environment called AVM (Arbitrum Virtual Machine), which is compatible with EVM.
Router’s Feature Developments
Router Protocol is a cross-chain communication protocol that extends its functionalities beyond token transfers to allow users to perform seamless token swaps and pass messages across blockchains. By maintaining support for arbitrary tokens, Router Protocol is completely permissionless, a feature of great essence in any decentralized ecosystem. Adding to the aforementioned functionalities, here are our 3 key differentiators:
Mesh Network: Router Protocol is building a mesh network to connect siloed blockchain networks. Compared to the existing deployments of 1-to-1 bridges that function as dedicated links between two chains, a mesh network is much more extensible. With only a few lines of configuration, we can add any chain to the Router infrastructure.
Settlement Engine: Router Protocol ensures no blocking for user funds and guarantees settlements of all transactions with its cross-chain settlement engine. Even in rare cases where Router is not able to provide users with the desired asset on the destination chain, it will provide them with an equivalent amount of USDC or RUSDC (that can be redeemed 1:1 for USDC).
AMM Fallback: To allow cross-chain asset transfers without creating any fragmentation, Router Protocol uses Dfyn AMM as a fallback reserve. Router can plug into any AMM or DEX, but it is optimized to work with their in-house DEX, Dfyn Exchange, to ensure the finality of a transaction.
Router’s Latest Efforts to Secure the Network
At Router Protocol, security is always at the forefront. Given the recent hack on Ronin, there is a growing scepticism towards bridges that promise to operate at the intersection of scalability and security, but fail to deliver. To mitigate such concerns and ensure a truly secure ecosystem, Router Protocol has taken various steps to safeguard its technical architecture from any breaches. Here’s a quick rundown of our efforts:
Router Protocol uses on-chain validation as opposed to the off-chain validation mechanism being used by a lot of cross-chain bridges. Currently, Router Protocol is running three validators and two votes are required for the transaction to go through. Now that we have solved for the scalability and security side of things, we are in the process of adding more validators to ensure that we remain sufficiently decentralized.
Router Protocol’s smart contract architecture is modular and we have different contracts for maintaining liquidity reserve, capturing fees, achieving a voting quorum, etc. as opposed to having a monolith architecture with a single contract handling everything.
Router executes transactions on a stateless execution pallet that can avoid direct interaction with the bridge reserves. Keeping the reserves isolated from the execution environment will prevent any malicious entities from accessing the reserve funds. The isolated execution pallet provides a dedicated smart contract compiler, interpreter, executor, and other related components for other developers to run their code on. Since the pallet executes the call data on a stateless handler contract, the function calls are completely tamper-proof.
By employing a dedicated proxy architecture, Router retains the option to update the contract in case of any contract vulnerability/bug. The latest proxy standard followed by Router makes it easier for the developers to deploy and maintain the proxy and logic contracts and also facilitates greater transparency by standardizing the methods for verifying the bytecode used by the proxy contract.
Router has already completed security audits from Certik and Halborn, and is currently undergoing a third audit from Hacken. Since the security of cross-chain projects has been under scrutiny as a result of recent hacks, it was prudent to get multiple audits to cover all our bases and to ensure the highest security standards for the community.
Router’s security testing is not limited to a few audit firms, but with our bug bounty program in collaboration with Immunefi, we have opened our code to be tested by an entire community of whitehat hackers, all of whom are eyeing bounties that go as high as $200,000.
For more information about Router Protocol and its mission to revolutionize cross-chain interoperability, visit www.routerprotocol.com.
About Router Protocol
Router Protocol is building a suite of cross-chain infra primitives that aims to enable blockchain interoperability between current and emerging Layer 1 and Layer 2 blockchains.
Website: http://routerprotocol.com/
Mainnet: https://app.routerprotocol.com/
Documentation: https://docs.routerprotocol.com/
Twitter: https://twitter.com/routerprotocol
Telegram: https://t.me/routerprotocol
Telegram announcements: https://t.me/router_ann
Discord: https://discord.gg/yjM2fUUHvN