Chainflip: A Decentralised, Trustless Swapping Tool
Chainflip is a decentralized, trustless protocol facilitating cross-chain swaps between different blockchains. The platform does not require users to have previous crypto knowledge or an intermediary to swap their tokens, as they can perform these functions in a few clicks. This way, Chainflip provides a trustless environment with no user barriers or heavy trade-offs.
Chainflip gives users the same permissionless experience as Uniswap by ridding the system of a trusted intermediary while still supporting the direct cross-chain exchange of cryptocurrencies. Its cross-chain capabilities ensure users do not experience the limitations of the Ethereum blockchain as this trustless swapping tool enables users to swap ETH directly for BTC or XTZ for DOT, among other cryptocurrencies. With Chainflip, one does not have to put their trust in wrapped tokens or get to endure the user experience issues seen with current offerings.
Coming up with an Efficient Trustless Swapping Tool
The key to any trustless swapping tool is coming up with a method of securing funds passing through its system. The existing liquidity pool platforms like Curve and Uniswap bank on the security of Ethereum’s smart contracts to enable users to send funds in a trustless manner. For Chainflip, producing the desired outcome means not relying solely on the security of a single, smart contract, since the project’s infrastructure is cross-chain.
The key to Chainflip’s trustless nature is the system of vaults within the platform. These vaults are responsible for trustlessly securing funds for users on the platform. For each supported blockchain, a vault is established, and validators operate it. The validators are special server types that stake into the network to earn rewards.
The combined system of validators and vaults gives Chainflip the capability to store funds securely. However, unlike how a smart contract code functions, this system does not give a predefined ruleset on how funds should be processed once in the vault. Instead, Chainflip is designed with a State Chain operated by the validators that allow the creation of transactions and the destination addresses.
The trustless nature of Chainflip’s design caters to the average user too, because it simply allows any interested user to swap their digital assets for another native token. Chainflip’s infrastructure does not bombard these average users with special wallets, wrapping, collateral, or staking. One only needs a browser and a destination address to use Chainflip; no adoption barriers, just swapping. These novel features enable the platform to provide easy and intuitive swaps from one major blockchain to the next.
How the Vault’s Design and Construction Enhance Chainflip’s Trustless Nature
This trustless swapping tool focuses more on the vault design and construction in its core infrastructure. It is the funds’ gateway, and since the project’s trustless nature rids the system of an intermediary, the security of funds is the top priority. Generally, when constructing vaults, developers use shared multi-signature keys that need a two-thirds majority of the vault’s nodes for it to submit a transaction. Chainflip, however, does not rely on a one-size-fits-all approach. Instead, the platform optimizes the vault management process to ensure each chain can provide the maximum efficiency and security for the platform.
The trustless nature of Chainflip is also enhanced by the vaults’ underlying feature whereby the nodes construct a threshold signature wallet from which transactions can only be approved when a predefined threshold of validators sign the transaction. This function is applied in the schemes used to generate the vaults because they do not need a trusted dealer or reveal any keys during the signing process.
The State Chain then comes in to enhance the functioning of this trustless swapping tool by acting as a standalone blockchain that serves as Chainflip’s coordination mechanism. It uses the data pertaining to the vault contents, coupled with the rules determining how to deal with transactions once they are in the Chainflip Vaults. It also manages swaps and liquidity and determines how validators come to a consensus on when and where an outgoing transaction should head to on another blockchain. All these State Chain functions enhance the trustless nature of the platform since it already has the AMM rules written into the very fabric of the blockchain.
What Lies Ahead for Chainflip?
Going forward, the Chainflip team is gearing up to bring this trustless swapping tool onto crypto’s major ecosystems. The project is working on connecting and bridging major ecosystems like Bitcoin, Ethereum, Polkadot, Solana, or Cosmos. By doing this, users can now seamlessly navigate through crypto’s growing multi-chain space. The project targets an early 2021 product launch with the $FLIP token launching within the next couple of months.