Multichain DeFi draws near with Chain Signatures
Intents-based relays serve as a bridge replacement as a single Near signature can execute transactions on other blockchains
NEAR and Adobe Stock modified by Blockworks
Nobody loves bridging, even in the best of times. For most crypto users, bridges are a necessary evil to move funds such as stablecoins from chain A to chain B.
NEAR Protocol’s latest contribution, Chain Signatures, which launched on its mainnet today, aims to simplify blockchain interactions by letting apps take actions across multiple blockchain networks through a single Near wallet transaction.
The concept of account abstraction is known on other chains. However, on NEAR, it is built into the protocol. “Meta transactions” allow any account to relay transactions to other networks by having relayers attach NEAR tokens to cover gas fees and pass the transactions to the external network for execution as if they were sent directly by the user.
This mechanism reduces friction and lowers the barrier to entry for NEAR users engaging with assets native to other chains.
Multichain signatures work via a multi-party computation (MPC) network of NEAR validators, so a user doesn’t need to worry about holding private keys on each chain. Instead, a single account can interact with various chains; rather than trading tokens, users are effectively trading accounts with smart contracts managing the ownership of keys across these chains.
Read more: MPC wallets have a trade-off. Is it worth it?
In practical terms, NEAR’s chain abstraction allows for innovative use cases, such as cross-chain DeFi, without the need for traditional bridging mechanisms.
Aurora Labs CEO and co-founder Alex Shevchenko calls the concept “AccountFi,” as it allows people to “trade accounts on any networks together with all assets and value those accounts have accumulated.”
As there is no minting or burning of assets, the process can be thought of as a one-way bridge through NEAR. For instance, the Rainbow Bridge, which connects to the Ethereum Virtual Machine (EVM) on NEAR, verifies the Ethereum state to eliminate the need for reverse operations.
This may have implications for so-called soulbound tokens (SBTs), a form of non-transferrable NFT.
“Non-transferable assets can be traded and lent, making accounts that do not have assets but have intrinsic value, like those used in farming an airdrop, also liquid,” Shevchenko said.
Chain signatures thus have the potential to consolidate multiple wallets into one, with relayers handling the user’s intent as well as the payment of transaction fees across different chains.
Such a system is reliant on the stability of the NEAR protocol and the security of its MPC architecture, and the network has had a generally strong record since its mainnet launch in April 2020. The protocol has undergone numerous upgrades and improvements while historically, NEAR has maintained a high level of uptime, alongside a low average block time of approximately 1.12 seconds over the last 20 epochs (10 days).
Chain Signatures currently supports ECDSA chains such as Bitcoin, Ethereum, BNB and Ripple. EDDSA chains like Solana and TON are expected to gain support before the end of the year.
Although only a handful of applications currently exist that can take advantage of Chain Signatures, Kendall Cole, CEO of Proximity Labs (a contributor to the project) expressed optimism in a statement to Blockworks.
“We’re excited to see Chain Abstraction in the wild, transforming the way users and developers interact with [DeFi] and [make] it more accessible,” he said.
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