ShuttleFlow: Enabling the Future of DeFi through True Multi-Chain Connection

Published in

Conflux Network

5 min readApr 20, 2021

ShuttleFlow is a unique multi-asset bridge built on Conflux, designed to facilitate dynamic progress in the decentralized finance (DeFi) space.

ShuttleFlow is not a simple one-to-one connector. It is a protocol for true interoperability intended to unleash the true potential of DeFi by removing the silos that keep existing projects, activities, developers and assets from interacting with one another.

Designed to support the accelerating momentum we have seen in DeFi over the past year, ShuttleFlow builds on innovations that have been developed across the space to offer a truly multi-chain architecture; assets flow across and between the many chains that collectively comprise decentralized finance.

Background

Between the mass decentralization of financial services and the non-fungible token (NFT) explosion, the DeFi ecosystem has never been bigger. In the first quarter of 2021, total value locked in DeFi protocols nearly tripled, from roughly $16 billion to $45 billion.

The growth of DeFi has caused a sort of ‘snowball’ effect: each new platform and service seems to spur the creation of another. When DeFi was born, it was mostly populated with decentralized exchanges. Today, it is a diverse set of lending protocols, stablecoins, synthetic assets, yield farming, and staking services that offer increasingly innovative, disruptive and fundamentally new ways to earn and invest.

However, as DeFi has continued to grow in size, a “turf war” has emerged. In the eyes of many, the battle for the future of the DeFi ecosystem is a battle of Layer-1s. Who is waging this battle? While the Ethereum blockchain is considered to be DeFi’s main base, the network has begun to struggle under the weight of increased usage. Transaction fees on the network continue to climb, while transaction speeds continue to slow.

As more Layer-1 solutions are created, DeFi is becoming fragmented

As a result, a number of other promising Layer-1 solutions have arisen to support the growth of the DeFi ecosystem. In addition to Conflux, Binance Smart Chain, Solana, Polkadot, and many other smart-contract enabled blockchains have been developed to support the growth of decentralized finance. Every L1 is host to its own universe of decentralized applications (dApps) and tokens — each one usually only operational on the blockchain network where it was created.

Herein lies the problem that must be solved. With each new Layer-1 blockchain that emerges into the world, the DeFi landscape becomes more fragmented. The liquidity of assets becomes diluted across blockchains. But the truth is no blockchain is an island — nor should it be. Fragmented as they may seem, blockchains, and their native assets, are and should be interdependent.

The DeFi ecosystem is growing faster than one-to-one cross chain swaps can keep up

The need for cross-chain functionality has long been obvious, and a number of innovative “bridges” have launched in the past several months. So far, the most effective of these have been one-to-one cross-chain swaps, which enable users to trade tokens across different blockchains without using a third-party intermediary.

However, as more and more Layer-1 blockchains are created — and as the DeFi ecosystem becomes more complex — the effectiveness of these one-to-one swap solutions diminishes. They simply do not offer the level of flexibility that is needed to operate in the DeFi world’s dynamic, multi-chain reality.

In order for the interdependent DeFi world to grow and develop more effectively, a more flexible inter-chain asset bridge solution is needed. This need is what inspired the development of the ShuttleFlow Cross-Chain Asset Protocol, a solution that enables true multi-chain interoperability of crypto assets.

How ShuttleFlow works

ShuttleFlow is one of the most advanced multi-chain asset bridge available in the DeFi space today. Its unique architecture provides interoperability between and across blockchains. For example, ShuttleFlow can facilitate swaps between two external blockchains, Ethereum and Binance, for instance, using Conflux as the transit chain.

Bridges with enhanced functionality connect to multiple chains (top); ShuttleFlow provides the most interoperability between, and across chains (bottom) using Conflux as the transit chain.

ShuttleFlow is more than an asset bridge

The name “ShuttfleFlow” refers to the idea of crypto assets flowing between Layer-1 blockchain solutions as freely as water. In order to achieve this level of flexibility, it employs a broad range of cross-chain functionality.

ShuttleFlow’s multi-chain capabilities are two-fold. First, it provides dApp developers with solutions to integrate multi-chain asset deposits and withdrawals at a low cost. At the same time, ShuttleFlow uses the Conflux Network as a “transit chain” to build asset bridges and other, related infrastructure across DeFi blockchains. As such, ShuttleFlow is slated to solve a host of liquidity-related issues in the DeFi space: to increase operability between blockchains, and as a result, to support the growth of the DeFi ecosystem as a whole.

ShuttleFlow on Conflux

To best meet the demand for high performance and low transaction fees, the creators of ShuttleFlow selected Conflux Network as their Layer-1. An innovative, smart contract-enabled public blockchain, Conflux can achieve a high volume of transactions per second without sacrificing decentralization or safety.

How is this possible? In order to lower transaction fees and increase speeds, Conflux Network has developed a unique, optimized Proof-of-Work (PoW) consensus algorithm that is capable of processing 3,000–6,000 transactions per second (TPS).

PoW networks are not typically capable of such high transaction speeds; the Bitcoin network — which also uses a PoW algorithm — typically confirms between 3.3 and 7 TPS. And while some Proof-of-Stake chains have managed to achieve numbers similar to Conflux, the staking model required for this kind of algorithm has led to concerns of over-centralization. So the Conflux Network truly offers the best of all worlds: speed, efficiency, and decentralization.

The Conflux Foundation is also committed to increasing accessibility in the DeFi world. The foundation provides gas fee subsidies for all smart contracts on its chain. Therefore, users can use contract services on the Conflux Network free of charge, and without holding any CFX tokens. These subsidies can also cover the transaction costs of the transit chain.

Conflux is helping build a dynamic, interdependent, growing DeFi marketplace. Using the industry-leading capabilities of Conflux’s Layer-1 solution to power ShuttleFlow’s pathbreaking multi-chain capabilities is an important way of helping speed the realization of this vision.

To learn more about Conflux Network and ShuttleFlow, click here.

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