Pantera Partner: Understanding the Cross-Chain Clearing Layer Everclear

Original title: Clearing Layer
Original author: Paul Veradittakit, Pantera Capital partner

Original translation: xiaozou, Golden Finance

1. Clearing Intents

Currently, there are dozens of active L1s, and with the emergence of rollup services, the number of L2s has also exploded. Reducing the trade-offs of cross-chain transfers of cryptocurrencies, unlocking value for all chains, improving user experience, and creating narrower spreads for users are much-needed features for the growth of users, applications, and protocols on these chains. Bridges Cross-chain bridging is a way for users to transfer assets and liquidity across chains. This is critical to price stability on the chain and, more importantly, to provide consumers with competitive spreads. Current crypto bridges face the trilemma of being fast, low-cost, and permissionless.

There are three types of cross-chain bridges:

· Custodial bridges: Using a CEX (centralized exchange) like Coinbase or Binance for cross-chain bridging is instant and low cost, but does not have permissionless characteristics.

· Permissionless bridges: Hyperlane, Portal, Hop, LayerZero are all fast, but not cheap. They can be permissionless, charged fees by liquidity providers (LPs), or rely on trusted miners to create canonical wrapped assets (not trusted assets).

· Intent bridges: Current solutions are permissionless, but are generally slower and not significantly less expensive than permissioned bridges due to rebalancing, and are also limited to large quantities of tokens.

Intent bridges have the potential to solve this trilemma, but face problems such as liquidity fragmentation, lack of standardization, and rebalancing costs.

Everclear's Clearing layer is designed to solve all of these problems and greatly reduce the friction of cross-chain transfers, reduce costs for application builders and users, and simplify the user experience for developers and users.

2. Intent Results

Intent Bridge noticed that 80% of cross-chain transaction volume would "flow back to the network" within 24 hours, which means that across all chains, for every dollar that leaves a chain, 80 cents will return to the chain within 24 hours. There are always transactions coming in and out, but 80% of the transaction volume eventually returns to where it started.

The protocol intends to make money by exchanging liquidity on each chain rather than bridging. For example, if a protocol like UniswapX has one user exchanging $100 from Arbitrum to Polygon, and another user exchanging $100 from Polygon to Arbitrum, UniswapX will support the two users to transfer tokens natively to each other, which is much cheaper than the traditional bridge method.

The core problem that Everclear solves is that such a perfect match is rare. If there is no such perfect match, the protocol must slowly transfer balances and "rebalance" through traditional custody or permissionless bridges. This is a slow, complex and expensive process.

3. Benefits to all parties

The main stakeholders of the intent bridge are:

· Blockchains (no permission required), who want to integrate bridge solutions, which is usually a long process.

· Protocols (auctions), which have intent order flow, but are limited to their own order flow.

· Market makers (Solvers) execute intent on certain chains, but there is no effective rebalancing method.

Everclear has standardized this process for everyone, which is a panacea. On each chain, Everclear deploys standardized contracts, users can generate "invoices" for their intent, and solvers can "balance" with each other. If no one claims the invoice after a period of time, a Dutch auction for the invoice begins. For example, if a user intends to transfer 10 ETH from Arbitrum to Polygon, and initially there is no solver to execute the request, the intent will be discounted to 9.99 ETH, and then lower and lower until a solver picks up the invoice.

The standard benefits all stakeholders and creates a permissionless system that aggregates order flow from applications, providing market makers with more order flow to maximize profits, and can support any chain with this standard set of smart contracts.

4. Partnerships

Everclear aims to benefit everyone. Existing stakeholders get a standardized system that virtually guarantees that intent will eventually be executed; there is more competition to grab user order flow, which drives down prices. This also means that the more stakeholders there are, the more efficient this market will be.

With this in mind, Everclear has partnered with numerous stakeholders such as aori (rebalancer), StaFi Protocol (L2 liquidity staking and staking app), Tokka Labs (rebalancer), Renzo (liquidity restaking), Anera (rebalancer), and many more.

5. Mainnet Launch

Everclear is the first settlement layer to coordinate global settlement of cross-chain order flow, solving the liquidity fragmentation problem of modular blockchains. Everclear's mainnet was launched on September 18th. For more details and to get involved, please see their blog.

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