Xocolatl adopts xERC20 Standard via Connext
We are excited to announce that Xocolatl, from LaDAO del Xocolatl, is the latest flagship user of the novel xERC20 token standard, with a goal to power safe $XOC token transfers between blockchains with minimal liquidity requirements and the best available security.
Xocolatl $XOC becomes the latest adopter of the xERC20 token standard following Alchemix.
Connext unveiled the ERC-7281 (aka xERC20) token standard for bridged tokens that puts token issuers in control of their tokens on every domain https://twitter.com/arjunbhuptani/status/1677363289964306432
xERC20 is a mechanism that powers projects to natively bring their token to every supported chain. It eliminates the need for providing huge liquidity to bridges and offers the best available security by being able to use battle-tested canonical bridges in the background. The novel token standard powers crosschain tokens that can be seamlessly transferred across blockchains with no slippage and without making compromises on security.
This novel approach to making tokens crosschain-ready provides these benefits for token creators:
- Provide users with a slippage-free bridging process across chains.
- Eliminate the need to provide significant liquidity to bridges on supported chains.
- Become independent of bridges and their security model(s)
This novel token standard fixes painful tradeoffs between the security risk of working with only a single bridge partner versus the high liquidity cost of supporting multiple bridges that token issuers today must navigate when bringing their token to multiple chains. xERC20-powered tokens are:
- Transferable across chains with no slippage.
- Deployed and fully controlled by the token issuer.
- Fully secured by Ethereum L1 and the canonical bridges of each chain.
- Fungible against the token representations minted by canonical bridges
What is Xocolatl?
Xocolatl stands as the inaugural decentralized Mexican Peso Stablecoin, overseen by LaDAO and directly issued from our core protocol, Xocolatl.finance. As evident to many Mexicans, the USDMXN has experienced a substantial -18% depreciation in the past year, intensifying the demand for a genuinely decentralized MXN stablecoin.
How does Xocolatl Use xERC20?
$XOC utilizes xERC20 (also known as ERC-7281) to establish itself as the inaugural multichain MXN stablecoin. This innovative approach replaces the reliance on traditional bridges, which typically necessitate liquidity provision on both the sending and receiving chains. Consequently, liquidity isn’t trapped on bridges; it can be actively used across different pairs like BNB/XOC, wETH/XOC, or wxDAI/XOC. This achievement is attributed to Connext’s unique bridging methodology.
Diverging from conventional bridges that demand liquidity on both sender and destination chains, Connext takes a distinct approach. It directly burns $XOC on the sender chain and simultaneously mints $XOC on the destination chain. This strategic move empowers LaDAO to position $XOC as a multichain stablecoin without the need for POL (Protocol Own Liquidity) in bridge mechanisms. This seamless solution using xERC20 optimizes capital efficiency, contributing to the overall robustness of the ecosystem.
From Xocolatl:
As of now, the collaboration between Connext and $XOC is a remarkable milestone that ushers in a new era of possibilities. By utilizing xERC20, we’ve transcended the limitations of conventional bridges and opened up a world of seamless, multichain transactions for the first decentralized Mexican Peso Stablecoin. This breakthrough not only enhances the utility and accessibility of $XOC, but also reinforces our commitment to revolutionizing the financial landscape in Mexico. Looking ahead, our partnership with Connext promises to unlock innovative avenues for the DeFi ecosystem. We envision deeper integration, increased interoperability, and expanded use cases that will empower users to transact and participate in the global economy with unparalleled ease. Together, we are rewriting the narrative of DeFi, championing a future where decentralized solutions like $XOC drive financial inclusivity and prosperity for all.
About Xocolatl
Xocolatl $XOC made its debut in August 2022 at ETHMexico, captivating passionate developers, DeFi enthusiasts, and forward-thinking participants. Over the past year, LaDAO, the issuer of $XOC, has diligently forged and nurtured new relationships in the space, with Connext notably playing a pivotal role in propelling us to this significant milestone.
In tandem with Jarvis Network, the issuer of jMXN, another Mexican Stablecoin, both initiatives have ignited the dawn of a new DeFi era in Mexico, aptly termed MexicanDeFi. This movement aspires to cultivate various DeFi protocols meticulously tailored to the Mexican market.
At the heart of Mexican DeFi lies LaDAO’s Xocolatl.finance, the pinnacle of this movement. Here, cryptonatives can mint and burn new $XOC via a Collateralized Debt Position (CDP), making Xocolatl.finance akin to MakerDAO, albeit distinctly innovative, as it was built from the ground up.
Connext
Connext is a network for fast, trustless communication between chains and rollups. It is the only interoperability system of its type that does this cheaply and quickly without introducing any new trust assumptions. Connext is aimed at developers who are looking to build bridges and other natively cross-chain applications. To date, over $1.5b in transactions have crossed the network.
