Router Protocol: Cross-chain

To address Ethereum's scalability constraints, Web 3.0 developers are consistently working towards building multiple Layer 1 and Layer 2 networks.
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These solutions are playing a vital role in onboarding an increasing number of users onto the DeFi ecosystem by reducing gas costs and improving network throughput.
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However, the proliferation of such networks also means that the user base of the Web 3.0 ecosystem is now fragmented across these multiple siloed networks instead of being concentrated on a single network such as Ethereum.
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This is inhibiting the true potential of the entire ecosystem.
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An obvious solution to the existing multi-chain paradigm is to build frameworks that enable seamless cross-chain communication between these siloed networks.
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And that’s where Router Protocol comes in:
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What is Router Protocol?
Router Protocol is a cross-chain communication protocol that works on an infrastructure layer above the smart contracts of various blockchains. One of the first applications of the protocol is a cross-chain bridge that can transfer or swap any token across any of the 9 supported layer 1 and layer 2 networks (Ethereum, Polygon, BNB Chain, Avalanche, Arbitrum, Optimism, Fantom, Harmony, Cronos).
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In a broader sense and in the long-run, Router Protocol enables dApps, or smart contracts, to have cross-chain capabilities via Router Protocol’s SDK: CrossTalk Library.
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CrossTalk is an extensible plug-and-play library that enables generic messages and state transitions between different chains in a secure and seamless manner. With a simple call, it has the ability to give your smart contract the ability to communicate with another smart contract that is deployed on a different chain.
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It can help developers build use cases like cross-chain staking and farming via Uniswap on the ETH mainnet from Fantom.
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What is unique about Router Protocol?
Router Protocol is unique in several ways! It features:
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Swaps between any token across 9 supported L1 and L2 networks
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Flexible bridging fees payable in 4 different tokens (native chain token, USDC, ROUTE, DFYN) with discounts up to 50% when paid using ROUTE/DFYN
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Pathfinder algorithm to find the most optimal route for cross-chain swaps
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A modular mesh network that blockchain networks can connect to, instead of deploying multiple 1-to-1 dedicated single bridges
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How does Router Protocol work?
Here’s a video demonstrating how to (cross chain swap) swap/bridge any token to any token on any of the 9 L1 and L2 networks that Router supports. (Ethereum, Polygon, BNB Chain, Avalanche, Arbitrum, Optimism, Fantom, Harmony, Cronos)
Typically, using Router Protocol for a cross chain swap look like this:
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Pathway 1
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Router uses a DEX on the source chain to convert your token to stablecoin USDC.
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The stablecoins USDC are locked on the source chain.
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An equivalent amount of USDC are unlocked on the destination chain.
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The unlocked stablecoins are converted to the desired token on the destination chain.
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There are other possible pathways taken to complete the cross chain swap. Router’s pathfinder algorithm uses the most optimal route, out of some of these possible pathways:
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Native chain token (ie ETH) will be locked on chain A and an equivalent amount of ETH will be unlocked on chain B.
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Native chain token, i.e., ETH, will be converted to a stable reserve asset (USDC), which will be locked on chain A. An equivalent amount of USDC will then be unlocked on chain B to buy ETH and send it to your wallet.
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You want to transfer 5 ROUTE tokens from chain A to chain B. 5 ROUTE will be locked on chain A, following which 5 ROUTE will be minted on chain B. While transferring ROUTE back from chain B to chain A, ROUTE tokens will be burnt on chain B and unlocked on chain A.
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Your X tokens will be locked on chain A and an equivalent amount of X tokens will be unlocked on chain B. These unlocked tokens will then be used to buy Y tokens.
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Your X tokens will be swapped for Y tokens and locked on chain A. On chain B, an equivalent amount of Y tokens will be unlocked and credited to your destination wallet address.
To proceed with the cross-chain swap, users are required to pay a bridging fee.
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Bridging Fees: With Router, users will have the utmost flexibility in choosing which token to use for transaction fees. Users can choose between:
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Native gas token on the source chain (default)
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USDC
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ROUTE (50% concession on transaction fees)
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DFYN (20% concession on transaction fees)
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CrossTalk enables cross-chain communication between dApps, i.e., cross-chain staking, governance, borrowing, and lending. It gives your smart contract the ability to communicate with another smart contract that is deployed on a different chain. With CrossTalk, you can:
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Build native cross-chain applications.
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Port a single chain DApp to multiple chains.
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Launch chain agnostic NFTs.
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Integrate a cross-chain bridge on your platform.
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Create stablecoins with built-in cross-chain capabilities.
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Hold cross-chain governance in your existing DApp.