A Sneak Peek Into Across’ V2

tl;dr V2 is almost here, with launch planned for May 24th. This new version features L2 to L2 transfers, a new chain, higher capital efficiency, and of course, incredibly low fees. Across will still have the same look and level of security you know and love, with higher functionality you’ll notice when you’re using it.

Across Protocol is a cross-chain bridge that allows you to quickly send assets between L2 and L1. Across’ bonded relayers, single-sided liquidity pools and use of UMA’s optimistic oracle allows for cost-efficient, fast and secure transfers between chains.

Below, we’ll walk through what you can look forward to in V2, launching May 24th, as well as some extras sprinkled in along the way.

Here’s what you can expect from V2

Omnipresence

With V2, you’ll be able to bridge to and from more chains. V2 will support L2 to L1, L2 to L2 and L1 to L2 transfers.

Users will no longer have to shop around to find the most cost-efficient, fastest bridge for different chains. Especially with larger transactions, we know every percent counts. This research process can be tedious. With V2, Across will be your one-stop shop no matter where you’re bridging to.

Increased Capital Efficiency

Across V2 is incredibly capital efficient. V2 uses the “Just in Time” liquidity mechanism that brings funds where they need to be, only when they are needed. This allows the majority of the funds to remain on the most secure, L1 layer.

Typically, other bridges need to split their liquidity for each additional chain. This leads to more slippage and higher fees. Across doesn’t make that sacrifice. Just in Time liquidity involves concentrating liquidity on L1. Concentrating liquidity in this way not only keeps our bridge safer, but makes capital available for larger transfers on any given chain. More available capital in those pools = larger transfers.

Netting

We can transfer more money back and forth with netting. If two people happen to be sending funds in opposite directions simultaneously, we just pair that coincidence of wants.

Here’s an example:

Alice wants to send $100 from Ethereum to Optimism and Bob wants to send $100 from Optimism to Ethereum. Neither of these individuals actually need to do ‘bridging,’ but rather can net off their balances with each other on their respective chains through Across V2. Either way, Bob and Alice won’t have to change anything they typically do as bridgers since this is done through the backend. The only difference they may notice is a fee reduction.

Bonus: The bridge pool still makes fees from all of these transactions, so with this new method we are likely to have a much higher APY coming from the pools for liquidity providers.

Continuing Our Low-Fee Commitment

Across already prides itself on being incredibly inexpensive. In V2, we will continue to provide extremely competitive fees thanks to batching and bundling transactions.

Batching works by allowing us to “batch” multiple payments into one transaction. By having only one transaction instead of multiple, there are fewer gas fees, allowing us to maximize cost-efficiency for the user while keeping the same speed Across prides itself on.

We can also use UMA’s optimistic oracle in a more targeted way by bundling transactions. To give some context, the optimistic oracle is involved each time a relayer is repaid in V1. In V2, transactions are aggregated into one bunch and verified at once (i.e. “Is this bundle of repayments valid?”).

All of these choices make for the lowest possible fee environment.

Our aim is for our fees to continue to be immensely cost-efficient across the board, no matter how much money you want to bridge, what chain you’re using and what direction.

Same Security Assumptions, Increased Functionality.

Across V2 utilizes the hub-and-spoke model, with the hub being on L1. By concentrating the majority of our liquidity on L1 in V2, we are able to make sure that the bulk of funds maintains L1 protections.

Why does this matter?

When a user has their funds dispersed on other chains, this adds trust assumptions they must have for those chains, in addition to the trust assumption they have for the funds on L1.

Our hub and spoke model keeps liquidity in the safest place, allowing for transfers without exposing liquidity providers to a higher risk. If a chain got hacked, only the funds in that spoke pool or funds traveling back to L1 would be at risk. Assets on L1 and the assets in the other spoke pool locations would be safu.

Many bridges require a sizable amount of capital to sit on the spoke, but we don’t. This allows us to provide an elevated security aspect compared to other bridges.

Across will also continue to use UMA’s optimistic oracle, which has been running for over a year without exploitation.

To learn more about how the optimistic oracle contributes to the security of Across protocol, click here.

Partial Fills

V2 also enables small players with less capital to participate as relayers with partial fills. Relayers can contribute to part of a fill rather than the entire thing. A benefit to bridge users is that size of a transaction is not capped at the single largest relayer balance but rather the cumulative sum of all relayer balances. This allows for larger transfers and thus an even more consistent user experience.

Some extras to excite you even more:

Simple UI

Our design is for everyone. It’s easy to use, helpful, honest and minimalistic. As our design lead, Jesper Gisslen states, our design aims to give off a “simplistic, user-friendly vibe.” This will not change with V2. The mechanisms that go with Across V2 are high level, but the interface will be just as simple as before — the only thing you’ll notice is the better functionality.

Transaction Tracker

V2 will also include a page to track the status of your transactions. This page will include the date of the deposit, % fill status and more. Everything you will want to know about your transaction will be present on your easy-to-follow transaction list.

Future Implications

Our nerdy engineers have become increasingly excited as they build out Across’ bridge. Building this generalized bridging structure and strengthening our foundations early enables us to think of a world of possibilities such as NFT bridges in V3 and beyond.

In the future, we will also have the option to upgrade the rebalancing strategies to fully optimize netting as we learn more about the L1<->L2<->L2 flows. The main point is that we don’t know how L2s will be used just yet. Maybe there will be a new farm on one chain that that will cause it to become immensely popular over others. There are many factors that may cause a big flow in one way or another or keep it balanced. For now, it’s difficult to predict. We can consider upgrading our rebalancing strategies to push and pull funds, so users will always know there is enough liquidity.

Across V2 strives to be the best bridge for all types of transactions. We know our users want low fees, more chains to choose from and better capital efficiency. We believe that we have achieved all of that and more with the same high-end security and simple look you love about Across, along with improvements you will notice in the background.

If you would like to stay up to date on our V2 launch, join our Discord and follow us on Twitter.

Liquidity providers: Don’t forget to migrate your liquidity on May 23rd!