Full-chain Liquidity Aggregation
Last updated
Last updated
To address fragmented liquidity and provide a foundation for the establishment of other dApps, we have designed a full-chain liquidity aggregation and settlement system with each public chain's single-token pool as the core. This system utilizes cross-chain messaging protocols such as Wormhole and Layerzero as bridges, with SUN Protocol serving as the settlement center. Single-token pools on each public chain allow users from any chain to provide liquidity to the protocol. Cross-chain messaging protocols are responsible for interconnecting these single-token pools. SUN Protocol, as the settlement center, brings security, concurrency, and low transaction fees to the protocol.
The single token pool is the core of the protocol. It is responsible for hosting the liquidity provided by users. The single token pool itself is stateless, and user states are aggregated and managed by the token pool manager at the core of the protocol. This approach simplifies the token pool significantly, resulting in scalability and facilitating the rapid integration of new public chains into the protocol. Additionally, users' operations can be separated across different chains, greatly enhancing operational flexibility. Users can deposit funds into the protocol on Chain A to earn profits and withdraw funds on Chain B to realize profit extraction. Key features of the single token pool include:
User Deposit: Users are allowed to initiate deposits into the single token pool. The single token pool is responsible for encoding user addresses, asset addresses, and asset quantities, and then completing the protocol payload delivery through bridges to execute user deposit operations.
Asset ID: Assets from different public chains have unique IDs within the protocol. Assets of the same type from different public chains are managed uniformly using the same ID (e.g., USDT on Evm and Optimism).
User Withdrawal: Users are allowed to initiate withdrawals from the single token pool. The single token pool is responsible for encoding user addresses and then completing the protocol payload delivery through bridges to execute user withdrawal operations.
User Deposit and Withdrawal: Users are allowed to complete deposit and withdrawal operations in a single transaction. The Swap operation in Dex applications can be considered as a deposit of T1 assets and a withdrawal of T2 assets in one transaction.
The single token pool manager at the settlement center of SUN Protocol is the unified manager of single token pools on different chains. It is responsible for asset classification and asset liquidity management of single token pools. Through the single token pool manager, the asset distribution of single token pools on different chains can be comprehensively observed. The single token pool manager has a dynamic cross-chain fee algorithm that automatically rebalances the popularity of single token pools based on available liquidity and expected liquidity on different chains. If the available liquidity of a single token pool is lower than the expected liquidity, the cross-chain fee increases. Conversely, if the available liquidity of a single token pool is higher than the expected liquidity, the cross-chain fee decreases.
The single token pool manager at the settlement center of SUN Protocol is the unified manager of single token pools on different chains. It is responsible for asset classification and asset liquidity management of single token pools. Through the single token pool manager, the asset distribution of single token pools on different chains can be comprehensively observed. The single token pool manager has a dynamic cross-chain fee algorithm that automatically rebalances the popularity of single token pools based on available liquidity and expected liquidity on different chains. If the available liquidity of a single token pool is lower than the expected liquidity, the cross-chain fee increases. Conversely, if the available liquidity of a single token pool is higher than the expected liquidity, the cross-chain fee decreases.
The Application Manager at the settlement center of the SUN Network is responsible for managing the applications supported by the protocol. Introducing new applications requires obtaining permission and allocating an application ID through the Application Manager. Each application in the protocol has a unique ID. Users can autonomously select the application they want to use based on the application ID, providing liquidity to the protocol. Alternatively, they can automatically select an application based on the protocol's recommendation algorithm, reducing the learning curve and enhancing user experience. The Application Manager is responsible for freezing and delisting applications in case of emergencies. Additionally, it is responsible for developing or updating message libraries used by application layer interfaces on different public chains.
Governance is one of the most crucial modules for the sustainable development of the protocol. Through decentralized on-chain governance, the protocol can continuously upgrade and optimize, providing multiple benefits to protocol participants. The governance module adopts the principles of DAOStack, enabling collective governance on-chain through governance tokens and reputation systems, covering the entire protocol. Initially, governance is conducted by the development team acting as proxies. After the issuance of governance tokens, a gradual transition to decentralized governance occurs, ultimately leading to complete community governance. The rules for issuing governance tokens will be determined in the near future.
Permission management encompasses all permissions within the entire protocol. Permissions related to the single token pool manager require approval from governance for the introduction of new assets and changes to dynamic cross-chain fee algorithm parameters. Permissions related to the application manager require approval from governance for the introduction of new applications and freezing applications. Through on-chain governance, governance token holders collectively contribute to the development and improvement of the protocol ecosystem.
