Instant Transfers from L2 to L1 – Across Protocol
Bridging is something that I believe will become a huge aspect of how we Ethereun’s interact with the Ethereum network going forward. A few weeks ago, I wrote a piece on my true vision for Ethereum’s future titled ‘A Multi-Bridge World’, and I strongly believe that if you are lucky enough to be involved within the Ethereum community right now, and plan on sticking around, you will get to witness the evolution of a bustling Layer 2 ecosystem that will ultimately have the capacity to serve as a new and improved financial system to its users on a global scale.
Introducing Across Protocol
As I stated in my previous article, we will see many more of these bridges pop up over time which all serve the purpose of facilitating movement between Ethereum Layer 1, and Ethereum Layer 2, as well as Rollup to Rollup movement – meaning that bridges will provide a pathway for users to move funds from one Layer 2 solution, to another Layer 2 solution entirely, all while being executed in rapid fashion at minimal cost. I will quickly use the Hop protocol as an example, which I also wrote about here, which now facilitates ETH transfers from Layer 2 back to Layer 1, as well as now providing a bridge between Optimistic Ethereum, Arbitrum One and the Polygon PoS network.
However, today I would like to focus on a new protocol that I came across recently while reading the ETH Hub newsletter. It is called ‘Across Protocol’, and yes, it is another bridge. However, in this case, it’s not just any other bridge. In fact, it’s not like any bridge we have seen thus far. Across Protocol is taking the next step in truly pioneering the effort to make the Layer 2 experience as seamless as possible for the end user, and I guess that the main focus for most users here, is the fact that they have to withdraw their funds back to Layer 1 in order to exchange the withdrawn funds for fiat and take profits. Well, Across Protocol aims to provide a solution to the biggest critique of an Optimistic Rollup, which is of course the seven-day delay period that the end user must incur before receiving their ETH in their Layer 1 wallet after withdrawing via the native bridge.
How Does it Work?
As stated above, Across aims to obsolete the seven-day delay period that the user must wait before withdrawing their funds. How they plan on doing this is actually quite incredible. Essentially, what will happen is when the user uses the ‘Across Protocol’ they will basically submit their funds into a smart contract that triggers a fund release via another smart contract which is located on Layer 1. When this contract is triggered, a liquidity pool located on Layer 1 will release the funds and send them to the users Layer 1 address. The funds released from the liquidity pool are equal to the amount originally submitted into the smart contract, minus a small service fee of course. So, in a nutshell, the user is receiving a very short-term loan from the ‘Across Protocol’ in order to be able to interact with their funds without having to wait the normal seven-day delay.
What Happens to my Funds Submitted to the Smart Contract?
Well, this is where the ‘Across Protocol’s service comes in. Once you have submitted your funds that you would like to withdraw from Layer 2, ‘Across’ then bridges them back to Layer 1 via the canonical bridge, which basically means that the ‘Across Protocol’ completes the seven-day wait time for the user. Some users may argue about the small service fee that is required to use this new bridging technology, but honestly, it is a fee that I am more than willing to pay for, and I believe that most of the Ethereum community will as well.
To wrap this up, this piece really brings me back to the grand vision of having a multi bridge world that will one day facilitate traffic on a global scale, moving from rollup to rollup or even simply back to Layer 1. We are truly only still just getting started with this technology, and it makes me so happy to see a new protocol like ‘Across’, that comes along and finds a way to make the overall experience better for everyone, and of course follows through and actually puts their plan into action. The launch date for the ‘Across Protocol’ is November 8th which is very close, a lot closer than I thought it would be anyway. I’m not sure if this is a soft date or not, but either way, I can’t wait to see this innovative new project evolve, and I am so lucky to be a part of this industry at such an important and revolutionary time.
Thanks for reading everyone!
Liam Donald
This newsletter is for educational purposes only and should never be considered as financial or investment advice