Chain Abstraction
Estimated time to read: 3 minutes
For Web3 app users, managing multiple chains, tokens, and accounts often leads to liquidity fragmentation in their wallets. Even with sufficient overall token asset balance, users struggle to transact because funds are scattered across several chains. To transact, users must convert assets from two or more source chains into those accepted on the target chain. This is a complex, time-consuming process not everyone can navigate.
Chain Abstraction lets users view and access a unified balance across chains associated with their wallet account, enabling them to transact on any chain. It shifts the focus from having to bootstrap funds to transact on the destination chain to specifying a clear intent for the transaction. This simplifies the transaction process and makes it accessible to a wider audience.
Unified balance
Unified balance shows all the liquidity in a user's EOA account across multiple chains in one view. It lets users transact seamlessly on any chain without needing bridges or pre-provisioning gas for token swaps. Chain abstraction handles all the complexity involved in a cross-chain transaction while enabling better UX through a single intent approval.
For instance, let us take the case where a user intends to spend 18 USDC on Scroll and does not have any balance on Scroll.
- Optimism: 0.1 ETH, O USDT, 0 USDC
- Arbitrum: 0 ETH, 12 USDT, 0 USDC
- Base: 0 ETH, 10 USDT, 0 USDC
- Scroll: 0 ETH, 0 USDT, 0 USDC
To spend 18 USDC on Scroll (destination chain) with the given liquidity fragmentation, it would typically require multiple clicks and steps for swapping or bridging different assets available on the source chains, so that user can convert the assets to the desired token balance on Scroll.
Through chain abstraction and ability to swap cross-chain, users have the convenience to view the consolidated token balance across supported tokens and chains. This simplifies the process of sending 18 USDC on Optimism, as users can sign the intent without the need for bridging, swapping, or considering the optimal routes.
The cross-chain swap enables users to:
- Spend assets on any destination chain without prior liquidity.
- Collate payable amount by combining multiple supported assets across source chains to address liquidity fragmentation.
Wagmi Plug & Play Widget
Arcana CA Wagmi SDK provides a plug and play widget that displays the Unified balance associated with the user's wallet address. This widget is available only for the Wagmi apps.
Follow these steps to use this widget:
- Install and integrate the app with the Arcana CA SDK.
- Use
CAProviderto enable the plug-and-play unified balance widget in the app. Learn more...
Allowance
Allowances activate Arcana Network's Chain Abstraction feature.
Allowances must be set up to enable a chain abstracted transaction that involves multiple source chains. With allowance setup, users can unlock the fragmented liquidity across multiple chains in their EOA. Effectively, this lets the user spend on any destination chain—even with insufficient balance on the destination chain.
By approving allowances for chain abstraction on the source chains, users can:
- Spend anywhere with funds from multiple chains.
- Bypass bridging to enable liquidity on the destination chain.
- Transact seamlessly across chains.
- Setup once, use repeatedly.
As part of allowance setup, users permit Arcana Vault contracts on the source chains to collect the funds required to execute the transaction seamlessly on the destination chain.
Note that the allowance set up transaction itself requires gas fee. This gas fee is payable by the user. In some cases, Arcana may sponsor gas fee for the allowance setup.
By default, the allowance limit for each supported chain is set to unlimited. This default setting ensure that all the supported tokens on the chain can be utilized as the unified balance available to spend. The protocol can collect the required funds according to the allowance limit and pay for the chain abstracted transactions on any destination chain. Developers can choose to modify the default allowance limits via the setOnAllowanceHook.
Benefits
Chain abstraction and unified balances simplify and streamline Web3 transactions by offering:
- Lower Complexity: Users specify their desired outcome and maximum price. Behind the scenes, solvers handle swaps, conversions, and routing securely and transparently.
- Unified Liquidity: Users see a consolidated view of their assets across all chains without needing manual bridges or swaps.
- Simplified UX: It eliminates the technical and time-consuming multi-step hurdles, creating a seamless experience for both experts and casual users by eliminating the clutter between user expectation and reality of blockchain ecosystem.
- Streamlined DX: Developers can enable unified balances in dApps without altering existing stacks. With the Arcana Chain Abstraction SDK, they can integrate seamlessly—no need to write smart contracts or manage chain switching for transactions on new chains.