Reintroducing Picasso: Restaking on Solana & IBC Everywhere

Picasso L1 Protocol enables secure asset transfers and Multi-Asset Restaking through cross-chain IBC.

Solving the problems of interoperability and security has always been the mission of Picasso Network and can address both of these by taking a two-pronged approach.

Amidst the need for solving the issues that have arisen from scaling the industry, the Inter-Blockchain Communication (IBC) protocol has emerged as a critical tool in building a cross-chain DeFi ecosystem without compromising security and decentralization.

Picasso Network’s novel concept of utilizing the most battle-tested asset transfer protocol, IBC, to power the Multi-Asset Restaking Hub, and utilizing the Restaking Hub to enable new IBC connections (new bridges to new ecosystems), bring Defi to a new composable state where economic security can be drawn from all ecosystems and assets are securing transferred seamlessly with no middleman and minimal attack factors.

The #1 protocol for secure cross-chain asset transfer & restaking.

The State of the Industry (Problem Space)

As the decentralized finance (DeFi) sector expands, it faces the paradox of its success leading to increased fragmentation of liquidity and assets, driven by the inadequacies of traditional Ethereum’s first-generation Layer 1 network. This has spurred a migration toward scalable alternatives since 2021, including Layer 2 rollups that bundle transactions off-chain for settlement on the Ethereum mainnet, and high-performance Layer 1 solutions like Solana that provide quicker finality and lower costs within a single-layer architecture.

Emergence of Fragmented Blockchain Ecosystem

Simultaneously, there’s a growing interest in modular blockchain architectures that decompose the traditional monolithic blockchain structure into specialized modules. Each module such as consensus, data availability, execution, and settlement focuses on a specific function, allowing for optimization and scalability enhancements tailored to each layer. This modular approach enhances overall efficiency and flexibility but also introduces challenges like potential centralization in the data abstraction layer.

In this evolving landscape, the rise of performance-oriented chains like Solana and the shift towards modular architectures both aim to address scalability but from different technical approaches. Solana optimizes within a single-layer system to achieve high throughput, whereas modular blockchains distribute functionalities across multiple layers or chains. This diversity in solutions contributes to a competitive, fragmented ecosystem as protocols vie for capital efficiency and block space. As the industry scales, there is a pressing need for easy cross-chain transactions that uphold the core DeFi principles of composability, allowing for secure and efficient value transfer across an increasingly diverse and modular blockchain landscape.

Composable Foundation and Picasso Network’s Mission

Addressing these challenges is central to the Composable Foundation’s mission through its Picasso Network, which focuses on interoperability and restaking.

Picasso L1 Protocol enables secure asset transfers and Multi-Asset Restaking through cross-chain IBC.

Security for Interoperability (IBC Everywhere) — As the industry expands and becomes more fragmented the need for secure permissionless bridging (no third parties) for cross-chain asset transfers is increasingly evident.

Crypto-Economic Security (Restaking) — We need secure networks and block spaces. Systems to ensure network integrity, validate transactions, and protect against attacks, all based on economic incentives, consensus, and cryptography.

DeFi Users — Individuals and users will gravitate to where the most liquidity and capital is onchain. In a growing blockchain ecosystem with multiple chains and layers, users need to be able to seamlessly transact cross-chain and experience hyper connectivity.

DeFi Developers — Developers need infrastructure to build the most cost-effective and performant applications in order to remain competitive. As a result, it has become increasingly important to build cross-chain and interoperable applications that increase connectivity rather than create silos of value. By utilizing economic security from established ecosystems, DeFi applications can bootstrap its own security from the start. Diversification of economic security makes all DeFi applications more secure.

Siloed On-Chain Value — With the fragmentation of the industry across various L1s and L2s, There is a rapidly growing need for cross-chain communication and value transfer.

Picasso’s Offerings

Solana Restaking
Picasso Restaking Hub serves as the platform to allow developers to draw security from the communities outside of their own. Starting with the vibrant Solana Ecosystem, community members who hold SOL can offer to secure new applications, networks and infrastructure that offer critical advancements in the crypto industry.

Sovereign Block Space on Solana
By providing sovereign block space, we can allow developers to create and manage their blockchain environments with specific configurations tailored to their needs (middleware & software). This is akin to how AWS enables customers to use virtual private clouds to create isolated sections of the AWS Cloud where they can launch resources in a defined virtual network.

While offering sovereign block space, devs and projects remain fully integrated and aligned with Solana’s infrastructure. This alignment ensures that applications benefit from Solana’s core features: speed, scalability, and low transaction costs, while also enjoying the autonomy of managing their operational block space.

Restaking on Solana Vs Ethereum
The benefits of Solana’s high-performance architecture extend restaking. In the same way, Solana enables more complex protocols to be built on top of Ethereum due to a more performant chain. Restaking on Solana is poised to revolutionize the DeFi landscape, offering unprecedented scalability and flexibility that could set a new standard for blockchain innovation and value creation, especially for middleware development.

Secure cross-chain transactions via IBC

IBC offers secure, fast and seamless decentralized transfer of messages and assets across different chains using native interoperability. With the IBC Protocol at its core, Picasso strengthens cross-ecosystem security, prioritizing fast and secure transactions to enhance seamless connectivity using its Decentralized Trust Architecture.

Picasso is the next generation of bridging and the new standard built on a superior tech stack — the end game for bridging.

Multi-Asset Restaking

Solana is the next frontier, but staking in the future will be without borders. Picasso realizes this goal with our IBC-Enabled Generalized Restaking Hub. It is our belief that the crypto economic security should be pooled from varied ecosystems, and it should be in the hands of project creators to select and reward the communities of restakers who are instrumental in securing their AVSes, Dapps, and Layer 2 networks. In the future, Picasso will offer multi-asset restaking for multiple ecosystems.

The Opportunity

The above presents a huge opportunity for Picasso Network for value capture from both cross-chain transfers and restaking.

EigenLayer has pioneered and popularized restaking. This protocol allows restaking specifically of Ether (ETH) and Ethereum-based LSTs, providing pooled security to AVSes on Ethereum. At the time of writing, EigenLayer has $13.373 billion in total value locked (TVL). This TVL is all the more impressive, given that the protocol only completed its mainnet launch of true restaking functionality on April 9th, 2024.

Wormhole is also a popular protocol, enabling generic message passing and thus communication between blockchains. Wormhole currently supports a large number of leading blockchains, including Cosmos, Ethereum-based chains, Solana, and more, listed here. Wormhole’s popularity highlights the need for a cross-chain interoperability solution between these leading chains: the largest bridge built on Wormhole, Portal, alone has $3.479 billion TVL

Who is it for?

Crypto is governed by the laws of demand-side and supply-side economic theory. Picasso’s solution caters for both supply and demand side users.

Demand Side

DeFi/Web3 Developers:
To stay competitive in the rapidly evolving blockchain ecosystem, protocol developers must build products that are capable of operating across different layers and blockchains. This cross-layer and cross-chain functionality is essential for tapping into broader markets and enhancing interoperability.

Developers and DeFi end users can leverage Composable/Picasso’s robust offerings such as the IBC connections, restaking capabilities, and various tools including the Composable Virtual Machine (CVM) and Hyperspace relayer. The deployment of the MANTIS framework also facilitates the creation of cross-chain, intent-centric applications.

Existing DeFi/Web3 Projects:

Projects that have already launched protocols are increasingly looking to harness cross-chain and cross-layer liquidity to attract new users from these diverse ecosystems and cross-pollinate.

In both cases the added security of IBC offers a vastly superior tech stack to build on top of or integrate into already existing applications.

DeFi End Users:

End users gravitate towards the most cost-effective and high-performing applications, which are now enabled by cross-chain interoperability. Additionally, they prioritize platforms that offer extensive cross-chain liquidity, enhancing their ability to operate across multiple blockchain environments efficiently and seamlessly.

Picasso Network enables users to access innovative cross-chain DeFi opportunities like generalized restaking and trust-minimized bridging, simplifying complex DeFi operations for greater user accessibility.

Supply Side

DeFi/Web3 Token Holders:
On the supply side, token holders form the economic backbone of DeFi/Web3 projects. They benefit from the appreciation of token values, which is driven by the project’s success in integrating cross-chain functionalities and attracting a diverse user base. Beyond traditional roles, token holders are instrumental in governance and enhancing the network’s stability and liquidity through staking and restaking mechanisms. Restaking not only provides additional yield opportunities but also strengthens crypto-economic security by further incentivizing holders to maintain and support network integrity and reliability.

PICA Token: A Value Accrual Mechanism

The PICA token, central to the Picasso ecosystem, supports various network functionalities and benefits significantly from the network’s advanced features.

Both token holders and validators are drawn to the advantages of holding PICA tokens, which include diverse cross-chain use cases and substantial value accrual mechanisms. Validators have extra incentives to participate in the Generalized Restaking layer, where they can earn validation rewards and further increase their earnings through native restaking of their existing stakes.

The PICA token accrues value from the following:

• IBC Revenue Share (20% to PICA Stakers)
• Restaking Layer (20% of AVS Yield to PICA Stakers)

Picasso IBC generates revenue from bridging fees, which vary based upon the networks involved in the transaction. Moreover, the Picasso Network accrues value from AVSes that pay to receive security via the Picasso Generalized Restaking Layer.
PICA stakers earn real yield from revenue share facilitated by both the bridging fees and the restaking layer.

• Users pay to transact using IBC bridge
• AVSes pay to receive security via restaking layer
• PICA Validators oversee/operate the protocol (with incentives)
• Insurance for cross-chain hedging
• Emissions for cross-chain liquidity aggregation

The Flywheel

Cross-Chain Bridging and Restaking: Last quarter, the Picasso IBC bridge facilitated over $500M in transactions. PICA token holders benefit from 20% of the revenue from bridging fees and restaking yields.

Generalized Restaking Layer: Beyond bridging, the generalized restaking layer of Picasso allows PICA to accrue value from enhanced security provisions across multiple chains. This value accrual mechanism is a key differentiator, positioning PICA for substantial growth as more chains and services adopt its technology.

• The more volume from connecting blockchain ecosystems together results in more cross-chain asset transfers.
• The more AVSes and restaked tokens increases economic security and restakers are incentivized to deposit to earn additional yield.
• The restaking layer allows builders to inherit Solana’s core features: speed, scalability, and low transaction costs, while also enjoying the autonomy of managing their own operational block space.
• Which grows liquidity, and incentivizes more developers to build on top of Picasso further enchanting hyper-connectivity and composability cross chains.
• This feedback loop creates a value capture mechanism for PICA stakers who earn a portion of both the bridging fees and restaking fees.

Value Propositions

Community-Driven Approach — Composable Foundation has always been building an open-source community-driven ecosystem which differs from many of the projects working on similar solutions, where the technology itself is gated and behind closed doors. Picasso’s Developer tools and SDKs will be available for anyone to use in order to build new interoperable applications.

Unlocks Liquidity Cross-Chain — Composable Foundation is creating the infrastructure to harness otherwise siloed liquidity and on-chain value. This improves end-user experience substantially for DeFi participants because it abstracts away the current complex processes and systems that users need to fulfill in order to participate across different DeFi ecosystems.

Secure & Cheap Near-Instant Cross-Chain Movement of Assets — In its current form, moving assets between chains is capital-intensive and time can take time hours and sometimes weeks due to fragmentation and lockup times. Picasso offers the optimal infrastructure and developer tooling needed to bridge the current technology gap in interoperability, by including IBC’s decentralized trust architecture.

New Opportunities for Builders Enabled by Restaking — Solana’s restaking capabilities, facilitated by Picasso, represent a transformative leap in DeFi’s evolution, merging performance with strategic asset utilization facilitated by AVSes. From the restaking layer users are able to pool assets and offer shared cryptoeconomic security to secure new applications, networks and infrastructure. Additionally, by offering sovereign block space, Picasso allows developers to tailor blockchain environments to specific needs, akin to AWS’s virtual private clouds, while fully harnessing Solana’s core attributes of speed, scalability, and low transaction costs. This unique approach not only boosts validators’ and token holders’ potential yield through multi-chain restaking but also fortifies the network’s crypto-economic security, creating a robust, efficient, and interoperable ecosystem. The integration of Picasso’s restaking framework on Solana sets a new standard for on chain innovation, enabling the development of more sophisticated protocols and applications, thereby driving unprecedented value creation across the DeFi industry.

Backed By:

We have a strong ecosystem of partners and investors who have backed us from the beginning. This group of leading investors have played a crucial role in our journey, providing not only financial support but also strategic guidance and access to their valuable networks. Below, are some of these key stakeholders, whose unwavering commitment has helped shape our path to success, from the very start of our journey over three years ago.

Conclusion

In conclusion, the Picasso Network stands poised to redefine DeFi through its novel use of Solana’s capabilities, coupled with the power of cross-chain IBC. By implementing innovative multi-asset restaking and sovereign block space, Picasso enhances yield potential and fortifies crypto-economic security, setting a new benchmark for scalability and interoperability.

Picasso is the endgame for bridging and the new frontier for restaking.

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