veDAO Research Institute: A Detailed Explanation of the Ethereum Interoperability Infrastructure Omni Network

Written by: veDAO Research Institute

With the development of the Ethereum ecosystem, it has become exceptionally difficult to scale transaction throughput and reduce costs on Ethereum Layer 1 while maintaining its high security. Over time, various proposals have attempted to address this issue: payment channels, state channels, Plasma, and so on. However, these proposals often achieve their goals at the expense of security, but it is precisely the emergence of these proposals that has continuously improved Rollup solutions.

Omni Network aims to connect different Rollup solutions by integrating Ethereum's restaking protocol EigenLayer and Cosmos SDK into a unified platform, aggregating Ethereum's modular ecosystem, allowing developers to build global applications across all Layer 2s on Ethereum while obtaining security from ETH itself. In this way, it balances Ethereum's security with Cosmos's speed and programmability, enabling developers to access more users and allowing users to more easily access new innovative applications.

Features of Omni Network

Currently, the blockchain ecosystem is trending towards high decentralization. As more Layer 2 projects are deployed on the mainnet, the liquidity network effect of Ethereum is continuously diminishing as user funds become isolated in siloed environments. Moreover, many Layer 2 projects plan to establish their own Layer 3 ecosystems, which will further fragment liquidity and users.

Unlike other cross-chain protocols, Omni Network believes that the Rollup solutions in the current Ethereum Layer 2 race have already addressed Ethereum's scalability issues, but interactions between different Rollups are not possible, leading to liquidity being fragmented across different L2 networks. This not only severely diminishes user experience but also makes Ethereum more fragmented than ever.

Therefore, Omni Network aims to become the "Ethereum interoperability infrastructure," providing interoperability for Rollup networks such as Optimism, Arbitrum, zkSync, and Starkware, becoming the core infrastructure for all Rollup networks and modular applications on Ethereum, achieving a seamless and secure cross-Rollup user experience. Overall, it has the following three characteristics:

Security: Ethereum Restaking

Omni Network achieves security from Ethereum itself while meeting interoperability needs through the Ethereum restaking (restakers) protocol EigenLayer. Omni Network consists of validators that run both Ethereum nodes and integrated Rollup nodes, restaking ETH through validators and proving Rollup state updates to facilitate global interoperability.

Omni Network sets a new standard for cross-modular blockchain security. By leveraging the restaking mechanism, Omni Network is the first blockchain that can achieve fully customizable functionality while still obtaining security from Ethereum.

Efficiency: Tendermint Consensus

By utilizing Tendermint PoS consensus, Omni Network's validators can achieve Rollup state consistency an order of magnitude faster than Ethereum Layer 1.

Omni Network combines Tendermint with the ETH restaking architecture to ensure rapid settlement of Rollups. By layering on a programmable/stateful layer compatible with EVM, developers can build applications that access state, transactions, users, and crypto assets from all Rollups. In this way, Omni Network achieves high speed provided by Tendermint while ensuring security.

Functionality: Full EVM Compatibility

Additionally, Omni itself is a programmable, state-diverse platform, allowing developers to leverage its rapid settlement and secure interoperability to build native cross-Rollup applications. Compared to applications that are isolated due to deployment on different networks, Omni Network's programmable interoperability will provide economically advantageous cross-Rollup applications through attributes such as multi-Rollup liquidity aggregation.

Omni's execution layer is EVM compatible, implemented by Ethermint (an EVM module) on Cosmos, allowing developers to use the Solidity tools they are familiar with for development. The execution layer includes built-in features to access state, messages, and applications from integrated Rollups, creating a seamless experience for accessing users and liquidity. By building a programmable interoperability layer, Omni will empower developers to create applications that are globally applicable by default, reducing the complexity of developer operations.

Project Progress

On April 26 of this year, Omni Network announced the completion of a $18 million funding round, with participation from Pantera Capital, Two Sigma Ventures, Jump Crypto, Hashed, The Spartan Group, and others. Omni Network stated that its core technology partners include the Ethereum restaking protocol EigenLayer, as well as Ethereum Layer 2 scaling networks Arbitrum, Polygon, StarkWare, Scroll, Linea, and others.

Omni Network plans to launch the Omni Network public testnet in the third quarter of 2023 and aims to release the first version of the mainnet in collaboration with major Rollup partners such as Arbitrum, Polygon zkEVM, Scroll, ConsenSys's Linea, and Starkware in 2024.

Outlook on Omni Network Application Scenarios

Although Omni Network has not yet launched its testnet, its goal of achieving seamless and secure cross-Rollup user experiences through modular application core infrastructure has already attracted significant attention.

On May 3, Omni Network held an AMA with Starkware and the Kakarot team, discussing how Omni Network plans to expand Starknet liquidity and other related issues. Omni Network stated that Starknet applications will be able to leverage Omni Network's interoperability infrastructure to pull more liquidity from the rest of Ethereum into the Starknet ecosystem. This means that developers will be able to offer their applications across the entire Ethereum ecosystem without increasing the complexity of the end-user experience, while still maintaining the performance advantages of Cairo.

In addition, there are many potential future application scenarios for Omni Network, such as:

• Cross-rollup margin accounts and leveraged trading: posting margin in one domain and trading with that margin in a separate domain;

• Multi-rollup NFT minting: Users of NFT projects are not limited to a single ecosystem, allowing them to mint NFTs from any domain;

• Cross-rollup lending: depositing collateral in one domain and borrowing against that collateral in another domain;

• Cross-rollup liquidity mining: coordinating all liquidity operations from Omni, transferring funds across protocols and domains from one place.

By obtaining security from ETH, Omni Network intends to reconnect the Ethereum ecosystem into a whole, allowing projects on Ethereum to no longer be limited to a single Rollup but to seek users and liquidity across the entire Ethereum ecosystem; this approach holds great promise for the overall impact on Ethereum.