EYWA is one of the newest cross-chain solutions in the web3 industry. Recently the CEO acted as an expert in a documentary about Bitcoin along with CZ, Justin Sun, representatives of 1inch, Fantom, Cardano, Polygon. We asked Boris Povar about his competition with current DEXes, future plans and more.
Can you tell us a little more about EYWA and what it hopes to achieve?
EYWA is a decentralized cross-chain data and liquidity transfer protocol.
We solve two big market problems:
The speed and scalability of cross-chain communications without compromising security.
- Cross-chain interaction requires the use of external sources of truth, so-called oracles or validators, and the main problem of this industry is how to solve the trilemma:
information delivery speed – how quickly information from chain A gets to chain B, as well as how many transactions per unit of time the system is able to process
security – how many attack vectors were taken into account when designing the system, in addition to checking the code for errors, how much the development team can influence the operation of the system, whether the system is built on trust or it works trustless (Why, in an effort to store and increase funds in decentralized protocols and blockchains, should we trust the transport layer?)
- Scalability – how many transactions the system can transfer, how many blockchains can support simultaneously, whether the system is decentralized, if so, to what extent it can scale while maintaining acceptable speed and security.
Most cross-chain protocols on the market compromise and sacrifice decentralization (and hence security) in favor of scalability to simplify development and also to achieve faster bridge performance. (LayerZero, DeBridge, Synapse, Celer, Multichain, PolyNetwork, Symbiosis). This is expressed in the fact that centralized oracles or a small group of validators (usually less than 30) are used as sources of truth.
Some solutions have good security but are too slow to be used for interactive communication between blockchains, so their main application is usually the transfer of tokens (Near Rainbow Bridge, Polygon PoS Bridge).
At EYWA we believe that the transport protocol for messaging between blockchains should be highly decentralized, otherwise it will inevitably lead to negative consequences in the future.
When we talk about security, we mean code audits and white hat programs, but just as important is a secure architecture.
The answer to this problem is EYWA Cross-chain Data Protocol (EYWA CDP),
using the decentralized transport blockchain EYWA Oracle Network as a source of truth.
There’s a lot of competition within the DEX market right now. How does EYWA stand out specifically?
In the cross-chain DEX market, competition is not so high, Stargate, Synapse, Squid can be distinguished. There is also the largest one-to-one bridge – Multichain.
How do we stand out?
High efficiency of capital use due to the original architecture of the liquidity protocol.
We use a “star” architecture, concentrating derivatives (in Fantom) on a single blockchain backed by locked liquidity from connected networks. Next, we use honest and time-tested auto market-making mechanisms – Curve AMM (stableswap, metapools and crypto v2).
Theoretically, this architecture will help us achieve lower exchange losses than competitors.
In a balanced state of the pools, with a total number of stablecoins in the amount of 100 million dollars (USDT, USDC, DAI, TUSD in six blockchains: Ethereum, BNB smart chain, Polygon, Arbitrum, Avalanche, Fantom) when exchanging any pair of stablecoins between networks in the amount of 100 thousand dollars, slippage will be about 0.01%.
To ensure a stable balanced state of the pools, as well as to prevent losses from out-of-balance liquidity entries and exits from the pools, we have developed an inter-network balancing arbitrage system that also needs liquidity.
Initially, we expect to additionally use 50% of the amount of liquidity in the pools.
Even taking this circumstance into account, the proposed architecture is at least 2-3 times more efficient than competitor systems.
This means that in order to achieve the same efficiency of exchanges as competitors, we need less liquidity. Having a comparable amount of liquidity, we will reduce swap losses.
In addition, the chosen architecture provides another unique advantage:
EYWA creates a new class of assets – secured non-algorithmic cross-chain tokens (e-tokens), transferred between blockchains for free, easily convertible into assets that back them. It is a kind of glue that will connect the fragmented liquidity of different blockchains and protocols, it is a universal connector that can connect any project or blockchain to the consolidated liquidity of the largest blockchains in DeFi.
We offer a unique service for Web3 projects – with us they can create their own single liquidity pool for all blockchains, using the infrastructure we provide, their users will be able to buy, sell and receive tokens of these projects in many blockchains.
Integration with Curve opens up access to the largest liquidity markets and bribe markets, so projects and liquidity providers can maximize their profitability.
How does EYWA enhance security, in light of the many bridge hacks we have seen in recent years?
The basis of the security is the decentralized system EYWA Oracle Network, which provides proof of the existence of the original transactions. We use the BLS threshold signature, which is generated by 40 validators with a threshold of ⅔+1. In each new epoch, we randomly select a new group of validators, also based on their rating (technical metrics), this greatly reduces the risk of “bad” validators taking control, which could distort the original data. If we talk about the bridge for tokens, EYWA Token Bridge, it works completely trustless, which means that only the user who owns a synthetic bridge tokens (aka “s-tokens”) can receive funds from it and only in the number of funds deposited initially.
The main attack vectors are an attempt to forge a BLS signature, an attempt to double spend funds, an attempt to capture the consensus of oracles, and search for errors in smart contracts.
We took into account known bridge hacks and vulnerabilities such as Multichain, Wormhole, Poly Network, Ronin bridge, Harmony One bridge, Nomad, AllBridge, Near Rainbow Bridge.
Our final goal, which we will achieve after the transition of the EYWA Oracle Network to PoS and the launch of the EYWA DAO, is to provide the community with a fast, fully decentralized trustless bridge for the transfer of data and tokens, the security of which does not depend on the will of a small group of individuals, and funds cannot be lost due to team errors, collusion or compromise of private keys.
Do you think EYWA and the wider DEX ecosystem will eventually replace Centralized Exchanges?
Yes, we believe this is possible, but it requires overcoming a number of technical barriers and issues that make dexes and DeFi in general quite difficult to use, and cross-chain interactions expensive and slow. It can be said that many DeFi infrastructure projects, such as Curve, 1inch, Uniswap, Aave, Compound, Syntetix, GMX, DYDX, effectively solve individual problems and by combining these technologies, we and our partners will be able to offer users a real alternative.
A recent Twitter post says that you are the most decentralized cross-chain DEX on the market. Why is this the case?
We say this because EYWA DEX relies on the EYWA CDP cross-chain messaging protocol based on the EYWA Oracle Network, this network is currently running on the mainnet and has more than 110 validators, in the future we will be able to reach more than 500 nodes on the network. The rotation of validators will occur every day. Our closest competitor, Axelar, has 70 active validators.
How will the Curve Finance partnership contribute to the growth of EYWA?
We plan to integrate cross-chain trading functionality into Curve, as well as use their bribe markets to quickly bring liquidity into our protocol, this collaboration has the potential to help us quickly catch up with competitors that have launched earlier. I think that because of the partnership with EYWA, Curve might become the leading cross-chain DEX.
What’s next on the roadmap for EYWA?
We intend to enter the market in the second quarter of 2023, launch the main product with initial liquidity and start connecting partner projects, demonstrating our technology.
Next, we plan to launch the token, protocol proprietary liquidity attraction (POL) and EYWA DAO programs during the third quarter of 2023.
EYWA CDP and EYWA CLP will be developed at the same time.
Regarding EYWA CDP, we are planning to systematically work on improving the stability and decentralization of the protocol, migrating to PoS, developing developer tools, and connecting new blockchains.
Regarding EYWA CLP, our goal is to quickly achieve the required amount of liquidity in order to provide the best conditions on the market and systematically integrate more and more new protocols that choose us and Curve as their main exchange. We will also encourage the introduction of e-tokens in various blockchains and protocols.
We plan to launch new liquid markets – for ETH, BTC and popular algorithmic stablecoins such as Frax, Mim, Mai and others.
For the community I would like to announce the future launch (Q2-Q3 2023) of public beta testing of the product in the mainnet, the initial liquidity mining program and retrodrops for liquidity providers, stay tuned!