Milkomeda Algorand Rollup Project Spotlight: Celer
Very soon the A1 Rollup is going to be deployed on the Algorand mainnet, bringing EVM-capabilities to the Algorand blockchain. We’re getting very excited about this imminent launch, and we know many of you are too! With that excitement building week-on-week, we wanted to show you what you’ll be able to do once the A1 Rollup is live on mainnet. To do that we’re going to highlight some of our partners who will be a part of the early Milkomeda ecosystem.
In this post, we’re highlighting Celer, a blockchain interoperability protocol that has connected over 30 blockchain and supports the porting of both fungible tokens and NFTs from one chain to another in a trustless manner!
What is Celer?
The Celer cBridge is built on top of the Celer Network and it is this underlying protocol that enables the trustless transfer of both fungible and non-fungible tokens (NFTs) between multiple blockchain networks in a single click. The Celer Network connects 35 blockchain networks and supports the transfer of 130+ tokens between those chains, via over 750 bridges.
This decentralized and non-custodial asset bridge utilizes the Celer Inter-Chain Message Framework to communicate between chains, and developers can use an Inter-Chain Message SDK to build dApps that are native to multiple chains. Users of these dApps can have seamless cross-chain experiences where, just like with the cBridge, they can send transactions and interact with protocols that exist across a diverse, multi-chain ecosystem — all with just a single click.
These dApps can fulfill a myriad of cross- and multi-chain uses, many already familiar to the blockchain user of today, including: cross-chain governance, cross-chain NFT purchases, and cross- and multi-chain DeFi activities.
How Does Celer Work?
The underlying Celer Network is a Cosmos-based chain using a delegated proof-of-stake (DPoS) consensus mechanism. This protocol is called the Celer State Guardian Network (SGN) and it is this that serves as the message router and validator set for the cross-chain transfer of assets in the Celer Network.
Validators on this network must stake the Celer network’s token to participate in the SGN, and delegators then stake their tokens to a validator of their choice to elect validators to participate in the validation process. Delegators receive rewards, drawn from transaction fees per transaction, for delegating, and these are distributed to delegators pro-rata. The Validator takes a variable commission off the top of their delegators’ rewards, a commission they set. This is all done through a main-chain contract.
To facilitate the transfer of assets, smart contracts are deployed on every chain, one for each token that is able to be transferred to that chain. These contracts are monitored and managed by the SGN. A user sends a transaction request to the smart contract and this is relayed to the SGN network by a relayer. The network’s validators then generate a multisig attestation to validate the request and send this to the destination chain where a relayer checks the validity of the message and triggers the user’s requested action.
Transferring Fungible Assets
There are two methods for transferring fungible assets across the Celer cBridge.
- xAsset — Here, smart contracts are deployed to each network where the asset transfer will happen between. One, a locking contract, is on the token’s origin chain, and the other, a mint-burn contract, is on the target chain.
Simply, users lock assets in the locking contract on the asset’s native chain, and pegged assets are minted 1:1 on the target chain. When assets are sent in the other direction the user sends them to the mint-burn contract to be burnt, before locked assets are released on the origin chain for the user.
- Xliquidity — This is used for tokens that have already been deployed across multiple chains, typically bluechip tokens. Here the token bridge is supported by liquidity pools on both chains. Bridge contracts are deployed on both chains and these use an AMM curve to calculate the bridge rate and to try and make sure it is always as close to 1:1 as possible. Users deposit tokens in the liquidity pool on one side of the liquidity bridge and receive tokens representing the same value, according to the curve, from the pool on the other side of the liquidity bridge.
Transferring NFTs and Multi-Chain Native NFTs
Existing NFTs can be transferred using the xAsset method described above, where the original NFT is locked on its origin chain and a replica is minted 1:1 on the target chain. However, Celer also offers multi-chain native NFTs.
These multi-chain native NFTs have no origin chain or “original NFT”. Mint-burn contracts are deployed on all the chains users want to bridge these NFTs to, and when the NFT is transferred across chains it is burned on one end and re-minted on the other. This way, there is only ever one unique and native NFT across all the chains, there are no copies or “original NFTs” locked anywhere.
Security of Celer Network and the cBridge
The Celer Network uses a delegated proof-of-stake model and unless 2/3 of the network's validators, by staked value, become malicious the network is secure. If a validator acts maliciously they will have their stake slashed and will be removed from the validator group. Using this consensus protocol offers a balance between a high level of security and a great user experience with fast confirmation times.
If for some reason, 2/3 of the network’s validators do become malicious, the Celer Network has a second layer of security based on the principles of optimistic rollups. A two-phase commit-confirm pattern is then used to process any messages on the network. Just as in an optimistic rollup, dApps can run an App Guardian service that validates the authenticity of messages on the origin chain, during a buffer period, before they’re committed to that blockchain. The dApps can also commission SGN nodes to do this task for them. So if there were to be a consensus failure on the SGN network the dApps using the network can still maintain, secure, and continue to use the network without issue.
Other security measures that have been put in place to protect the network include: a rate limit for liquidity operations, a cap on the single transfer amount of a token, an independent 24/7 Sentinel Service run by the core developers of cBridge, and an App Guardian service run by all validators on the SGN to check on-chain balances when a cross-chain transfer happens. All of these parameters further secure the funds of users of the trustless Celer network against malicious actors.
What is Celer Bringing to the Algorand Ecosystem?
Through the Celer cBridge connection to the A1 Rollup users of Algorand will be able to experience the decentralized and non-custodial, cross-chain transfer of both fungible tokens and NFTs!
Users will be able to transact and transfer liquidity across multiple chains in a trustless and fluid manner, allowing the curious users of other blockchains to experience the dApps that the Algorand ecosystem has to offer, along with the near-instant transaction finality and high transaction throughput of the carbon neutral Algorand network.
Not only will users be able to transfer assets from Algorand to other blockchains, developers will also be able to deploy cross-chain dApps to the A1 Rollup for the users of Algorand to use — allowing them to utilize multi-chain dApps on Algorand!
Multi-Chain Interoperability is Coming to Algorand!
With the deployment of the A1 Rollup Algorand is gaining EVM-capabilities and all the benefits associated with it. When Celer is deployed on the A1 Rollup users of Algorand will be able to have a decentralized inter-chain experience, with access to over 30 other blockchains through the Celer SGN.
If the thought of being able to transact across chains using a non-custodial intermediary gets you excited then check out all of what Celer has to offer and what chains their connected to by following the links below! If you find yourself eager to use this multi-chain bridge once it’s live then we suggest that you familiarize yourself with the wrapping and unwrapping of tokens onto the A1 Rollup testnet here.
Learn More about Celer:
cBridge dApp: cBridge
cBridge Docs: GitBook