Chain Abstraction: DeFi headaches begone

DeFI is cool until you want to send crypto. You need to have the “right” kind of crypto, on the “right” blockchain just to use it. That’s annoying.

But this is where Chain Abstraction from NEAR Protocol comes in. Essentially, it’s all about getting rid of the chains for the end-user and making DeFi transactions as seamless as the Web2 financial apps you’re used to.

Before diving into Chain Abstraction, let’s take a quick step back and understand what blockchains are all about.

Blockchains

Imagine a giant, public record book that everyone can access but no one can tamper with. That’s essentially what a blockchain is. It’s a distributed ledger technology that records transactions securely and transparently across a network of computers.

This makes them ideal for things like:

• Cryptocurrencies: Like Bitcoin or Ethereum, which use blockchains to track ownership and ensure secure transactions.
• Smart contracts: Self-executing agreements that automate transactions based on pre-defined conditions, all stored securely on the blockchain.

Blockchains offer several advantages, including:

• Security: They’re incredibly resistant to hacking and fraud due to their decentralized nature.
• Transparency: Everyone can see the history of transactions on a blockchain, fostering trust and accountability.
• Efficiency: They can automate processes and eliminate the need for intermediaries, saving time and money.

However, here’s the catch: there are multiple blockchains, each with its own strengths and weaknesses. This can be confusing for people who want to explore different DeFi applications, as they might need different types of crypto on different blockchains.

“There is no chain…”

Here’s the idea:

• Today, different blockchains are like separate countries. Each one has its own currency and rules.
• Chain abstraction transports you to these different “countries” so you can interact with other applications without ever leaving your home “country”…and without even noticing you're being transported.

Benefits of Chain Abstraction:

• Seamless experience: No more switching between wallets, swapping currencies, or dealing with different network fees. You just use the app, and it takes care of the rest behind the scenes.
• More choices: Access a wider range of DeFi applications and services, regardless of the blockchain they’re built on.
• Simplified development: Developers can build applications that work on multiple blockchains without needing to write separate code for each one.

Is it magic? Not quite.

We’re partnering with NEAR to make this a reality, but it’s still under development. In early February 2024, we conducted the first transaction on the BNB TESTNET to make sure it’s doable. Turns out, it is!

What about the drawbacks?

Chain Abstraction is a technological marvel. Not only does it achieve the immense goal of connecting Web3, but with the Sweat Wallet app it will be done seamlessly. However, there are of course some technical aspects we must consider when implementing such a feature:

• Cross-chain performance: Cross-chain transactions might take longer due to the need for communication between different blockchains, leading to delays in processing.
• Security risks: Dealing with multiple blockchains increases the risk of vulnerabilities in another chain affecting you.
• Increased Gas Fees: While we’ve had the luxury of super-cheap Gas Fees on the NEAR Protocol, other chains may have more expensive Gas Fees to make transactions on their blockchain.

What about paying expensive fees on other chains?

Don’t worry! Just like our first testnet transaction on the BNB blockchain, Sweat Economy will focus on working alongside other chains that are:

• Fast
• Scalable
• Cheap

This will allow you to continue to use the Sweat Wallet app, among numerous blockchains with low Gas Fees. Plus, our upcoming feature dubbed “$SWEAT as Gas” will soon allow you to pay your fees with your feet.

That’s right — Walk, mint $SWEAT, pay for transactions. All without purchasing extra NEAR.

As we know, Chain Abstraction holds the potential to revolutionize how we interact with DeFi and make the whole experience much more user-friendly.

So, the next time you hear about chain abstraction, remember: it’s not about disappearing chains (though it’ll feel like that), it’s about making the internet function the way it was always supposed to.

The Sweat Team

Want to be the first to hear when new Roadmap milestones are hit? Join us on Twitter, Discord, Telegram, and Reddit.

These materials are for informational purposes only and are not investment advice or an invitation, recommendation or solicitation to buy, sell or hold any crypto asset or to engage in any particular trading strategy. Many crypto products and markets are unregulated, and you likely will not be protected by government compensation and/or regulatory protection schemes. Crypto assets are high-risk investments and the unpredictable nature of crypto asset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in value of your crypto assets. You should seek independent professional counsel from your investment advisor and tax advisor in connection with any acquisition or disposition of crypto assets.