Mosaic utilizes Hop for liquidity rebalancing
Composable Finance is excited to announce that Mosaic is leveraging Hop to expand its network of bridging infrastructure and to power the next generation transfer availability liquidity. Hop will be integrated among other DeFi bridges and will be tapped into by Mosaic — Composable’s cross-chain liquidity layer. Mosaic Phase 2 has officially been announced and introduces new cutting edge features like passive liquidity rebalancing through the integration of forecasting models and bridge utilization. Hop is a scalable rollup-to-rollup general token bridge that is being leveraged by Mosaic to further streamline the process of passively rebalancing liquidity to ensure the successful completion of high volume cross-chain transactions.
Mosaic taps into the Hop bridge to balance cross-chain liquidity vaults
This integration accelerates and guarantees cross-chain asset transfer and provides improved liquidity for both Hop and Mosaic. Mosaic’s ability to tap into other bridges, such as Hop, for liquidity rebalancing targets a pressing problem faced by users. As users attempt to transfer between various L1s and L2s, they often lack available liquidity, which Mosaic’s rebalancing solution will now alleviate. Mosaic deploys several forecasting models to detect a future shortage in liquidity for incoming transactions, thus forecasting where liquidity will be needed. As shortages are identified, liquidity is moved to where it is needed to guarantee that transfers will be executed. Mosaic Phase 2 adopts 3 modules for scalable liquidity that lead to the optimization of cross-chain transactions for DeFi applications.
The process of passive rebalancing is crucial for the broader adoption of cross-chain transfers as liquidity needs to be available in the appropriate layer as requests are submitted. Integration with well-established bridges, such as Hop, allows Mosaic to efficiently accomplish the rebalancing of liquidity for the purpose of guaranteeing transfers. Overall, this integration is mutually beneficial as it improves the efficiency and capabilities of both Hop and Mosaic.
Passive Rebalancing of liquidity explained
There has to be adequate liquidity for every transaction requested to ensure the request can be facilitated successfully. This is the core idea behind the proactive rebalancing of Mosaic vaults. Our passive liquidity rebalancing takes a proactive and collaborative approach as the movement of liquidity is automated using forecasting methods and data that has been tested with tools such as our Liquidity Simulation Environment (LSE).
Mosaic utilizes the available forecasted data to determine which bridge needs to be tapped into for liquidity as well as where the liquidity needs to be redirected to carry out any incoming transfer requests. In this way, we can avoid the scenario where an incoming transaction request can not go through due to a lack of liquidity. For example, if Vault A has liquidity lesser than the set threshold, and transaction requests are facilitated to the vault, Mosaic redirects the appropriate liquidity from Vault B to Vault A to bring the available liquidity back above the set threshold and ensure smooth transaction flow for any future transaction requests.
An additional important aspect of Mosaic is the ability to provide just-in-time liquidity, through active management bots, for any outlier instances that require liquidity beyond the set threshold.
How tapping into the hop bridge is a mutually beneficial process
Mosaic leverages bridges such as Hop for proactive liquidity rebalancing, but this process also benefits the bridge that is being utilized since their own vaults will be rebalanced to create an overall more efficient unified liquidity network. This process boosts the overall user experience by alleviating liquidity imbalances and improving transaction throughput. As Mosaic detects drops in vault liquidity it redirects liquidity to and from bridges inside its network. This enhances the abilities of all bridges’ abilities, as Mosaic becomes the unified liquidity layer that enables true cross-chain capabilities.
Hop is a scalable bridge architecture land rollup to rollup protocol that focuses on connecting the different scaling solutions in the Ethereum layer-2 ecosystem. It enables users to move crypto assets directly between L2s in a fast and efficient manner. It also cuts the rollup challenge period wait time by enabling users to send tokens from one rollup to another almost instantly. With Hop, blockchain solutions can get reconnected with the L2 networks within the Ethereum ecosystem through the creation and utilization of bridges.
The Mosaic transfer availability layer uses advanced liquidity management and Just-in-Time (JIT) liquidity bots to leverage a network of existing bridging infrastructure. As a result, it creates a next-generation chain-and-layer-agnostic asset transferal system that guarantees transfers, employs dynamic fees and efficiently rebalances itself, ensuring scalable liquidity at all times.
Composable Finance has officially announced Mosaic Phase 2, introducing three paradigm modules that position it to become the absolute cross-chain liquidity layer that keeps pace with the increasing demand and volume of cross-chain DeFi transactions. Mosaic’s dynamic fee model, passive liquidity allocation module and active management of liquidity have been built to further unlock and guarantee cross-chain transferral possibilities.
Mosaic is now officially entering Phase 2, where it continues to position itself as a true cross-chain liquidity layer. As we continue to refine the capabilities of cross-chain transactions, we continue expanding our network to leverage well-established bridging solutions such as Hop. These integrations and Mosaic’s ability to tap into bridges allow us to efficiently rebalance liquidity to create a unified layer that benefits all participants. Liquidity rebalancing is a crucial aspect of the DeFi future we have envisioned. Through collaboration and unification, we can advance past the current boundaries of cross-chain transactions, such as the inability to truly facilitate all transaction requests as the volume of these increases.
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