deBridge: What You Need to Know
Lightspeed Bridging with Intents
The bridging space is one of the most popular in all of crypto. As liquidity spreads out over more and more chains, the demand for interoperability services between these chains only grows. Teams and developers also look to integrate good bridging solutions, as the bridging process alone can be a barrier to acquiring new users. Our coverage of top bridging protocols has been expansive and increasing, from Across to LayerZero, and more.
In today’s edition, we’ll discuss a bit about deBridge. deBridge, which has an ongoing points program that debuted in April, gets a lot of its action bridging to and from Solana, even being integrated with Jupiter protocol. Solana consistently places in the top few chains that bring deBridge the most revenue despite expanding services to more and more chains under the EVM umbrella.
Stay alert, stay informed ⬇
Background on deBridge
deBridge describes itself as a lightspeed bridge. Due to the ever-growing demands of DeFi, efficient infrastructure is crucial for cross-chain operations due to challenges faced in rebalancing liquidity efficiently. deBridge was initiated to address these challenges after encountering limitations in liquidity management. According to deBridge’s Founder, Alex Smirnov, the inception of deBridge stemmed from the necessity for a decentralized and efficient cross-chain transfer mechanism. Messaging infrastructure forms the foundation for interoperability, enabling value transfers between chains.
The model that deBridge uses comes from trial and error. The initial approach, which used liquidity pools, faced scalability issues due to bottlenecks in security, scalability, and capital efficiency. Continuous interest payments for liquidity providers posed challenges in maintaining profitability.
Security vulnerabilities arise from large TVL as these metrics attract hackers, making bridges prime targets for malicious actors, a story all too common with the Wormhole exploit, Ronin exploit, and more. It’s important to note however that this is by no means an area of risk native to only bridging protocols; Vitalik’s stern warning to beware of bridges references a different type of attack vector than any major bridge hack has had problems with.
deSwap Liquidity Network
deBridge ceased using the liquidity pool model in favor of their deSwap Liquidity Network (DLN) infrastructure. In this system, liquidity pools are replaced by an intent-based approach. Users specify slippage tolerance parameters and control execution. Users incentivize actions through the intents they create. They can specify rewards for desired actions, controlling prices effectively. Market makers fulfill intents, taking on associated risks.
Intent-based protocols fill intent and unlock liquidity seamlessly for users, simplifying the process. Cross-chain swaps exemplify user intent where complexity is shifted to market makers or solvers behind the scenes. Market makers play a crucial role in fulfilling actions, emphasizing the importance of onboarding them for protocol success. onboarding sophisticated actors like market makers poses challenges due to their focus on large opportunities and reluctance towards development efforts. Bootstrapping intent infrastructure involves reaching out to market makers for liquidity provision, with initial challenges in attracting interest from major players.
The cross-chain interoperability infrastructure and with deBridge being a generic messaging protocol, solutions can be built on top of the deBridge framework in addition to DLN. Existing solutions include dePort, which allows protocols to give utility to synthetic, bridged versions of their tokens. deNFT, which will be released soon, is an “infrastructure for cross-chain NFT transfers”, enabling NFTs that don’t have a specific home chain but are natively crosschain.
Deploying on Solana
While not exclusive to Solana, SOL stands out as the only non-EVM chain deBridge offers its services to, excluding the Neon Chain, which aims to bring the EVM to Solana. Ethereum leans towards decentralization, prioritizing security over performance. Solana focuses on high performance while maintaining decentralization to attract larger investors. The team started building smart contracts within the Solana ecosystem before launching on Mainnet in May 2022. Speed, security, and finality are qualities of the chain appreciated by retail users. Solana aligns with deBridge’s mantra of providing tech that is as fast as DeFi users need it to be.
Important Links
Become a Premium member to unlock all our research & reports including access to our members-only discord server
Join thousands of sharp crypto investors & traders by becoming a Premium Member & gain an edge in the markets. For just $116.58/month you’ll get:
Premium access to the entire Revelo Intel platform
Members Only Discord server
Market Intel - actionable investment reports
Industry Intel - highlighting important narratives/ trends
Project Breakdowns - Deep dive 50+ page protocol-specific reports
Notes - Summaries of your favorite podcasts and AMAs