Synapse Chain: Evolving from a Cross-Chain Communication Protocol to Layer 0 Cross-Chain Infrastructure

BlockBeats
2022-09-21 16:06:28
Collection
The cross-chain communication protocol Synapse Protocol announced the upcoming launch of Synapse Chain.

Original: 《Synapse Chain: Cross-chain Infrastructure in Multi-chain World》

Author: alphanonce Intern @alphanonceStaff

Compiled by: 0x711, BlockBeats

The cross-chain communication protocol Synapse Protocol has announced the upcoming launch of Synapse Chain. However, last week's focus was on the mainstream Ethereum merge, and this news did not receive enough attention. This article will elaborate on what Synapse Chain is and its significance.

TL;DR

  1. The nUSD feature makes Synapse a unique cross-chain service;

  2. Synapse Protocol may undergo a qualitative change with the launch of Synapse Chain;

  3. Synapse Chain serves as a single execution layer for different blockchains;

  4. A single execution layer can become the infrastructure of crypto.

Since its launch in August 2021, Synapse Protocol has achieved tremendous success. Although it supports fewer chains than Celer Network, it has a stable user base. Since the protocol went live, Synapse has completed a total of 987,000 transactions, with a total cross-chain transfer amount reaching $11 billion, and its total revenue has also reached $18 million.

If you provide liquidity on Celer Network or Multichain, your liquidity may be transferred to other networks. For example, if you provide liquidity on Ethereum, your tokens may be transferred to Fantom. When you need to remove liquidity, you will have to use a cross-chain bridge to move stablecoins back to the original chain.

The cumbersome process of liquidity extraction represents a poor user experience with cross-chain bridges. Moreover, considering the vulnerabilities of cross-chain bridges in terms of blockchain security, providing liquidity across networks always leaves users feeling uneasy.

Synapse addresses this issue with nUSD. Users on Synapse can specify the network to provide liquidity. nUSD is fully backed by USDT, USDC, and DAI on Ethereum. When needed, it will be burned on the source chain and minted on the target chain. It is recommended to read this article for detailed mechanisms. As a result, Synapse has become one of the leaders in the cross-chain bridge space. The transfer data for various cross-chain bridges in the last 30 days is as follows:

Multichain: $1.67 billion;

cBridge: $455 million;

Synapse: $241 million;

Stargate: $238 million;

Hop: $115 million.

With its user base, Synapse is attempting to transition to the next phase.

They have launched a new cross-chain product, Synapse Chain. Dapps will no longer need to deploy their protocols on each chain, but only need to deploy on Synapse Chain. Facilitating cross-chain deployment of contracts is the main function of Synapse Chain.

Synapse uses Optimistic Rollup to provide a single execution layer for various networks. Each block of Synapse Chain will be stored on the Ethereum network, which means it has nearly the same level of security as the mainnet. Gas fees will initially be paid in ETH and will later be switched to SYN.

Currently, they have released a testnet for developers to deploy contracts. The recently popular protocol GMX has announced a partnership with Synapse, planning to deploy the GMX protocol on Synapse Chain. As a result, GMX no longer needs to deploy its protocol on various networks. Synapse can also gain value through gas fees. A win-win collaboration.

The TVL market share on Ethereum has dropped from 96% in January 2021 to 58% now. With the emergence of new public chains like Canto, cross-chain expansion will become a necessary path for many Dapps. In a multi-chain world, a single execution layer for different blockchains will become essential infrastructure.

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