BoringDAO oPortal V3: An auto-rebalancing mechanism to maximize & aggregate liquidity across multi-chains
Cross-chain bridges have become an indispensable utility for most DeFi farmers, allowing users to transfer tokens between chains. Demand for bridges has exploded over the past years with the emergence of new L1s\L2s with innovative DeFi protocols.
Currently, there are many types of bridges with different strengths in terms of safety, storage, speed, and cost, but the liquidity issues still remain as one of the fundamental problems for all. Funds on some popular destination chains can be quickly used up if a large number of users rush to certain farms, leaving the users with only two options: either wait for liquidity to replenish or pay really high transaction fees.
I feel your pain, frens. 👐
With BoringDAO V3, we guarantee that you will never run into these kinds of dilemmas again.
How can we achieve it? Let’s take a deep look at our brand new solutions!
Cross-chain Market Management (MM) Bot
BoringDAO is building on-chain liquidity bots. They will constantly rebalance liquidity across multi-chains, similarly to the MM bots on CEXs, maintaining liquidity on different chains and allowing transaction volumes to scale significantly while keeping the cross-chain price equilibrium.
This is how it works: the MM Bots will have some preserved funds which are completely separated from the cross chain bridge funds. Whenever users complete cross-chain transactions, the MM bots will detect the liquidity gap. They will compare the cross-chain fees among different bridges, official gateways and exchanges, and pick the best option to cross back the liquidity by using the preserved funds.
For example, once a user transfers some USDT from Avalanche to Harmony, the MM bot will cross its preserved funds to Harmony through the official bridge or a third-party bridge, and use oPortal to move the same amount of USDT from Harmony back to Avalanche. After rebalancing the liquidity on Avalanche, the bot will continue to use them as preserved funds. The MM bots will always replenish the destination liquidity at the lowest cost. In this way, the users will never need to worry about the liquidity being exhausted or wait a long time for the liquidity to be rebalanced.
Therefore, BoringDAO oPortal will have the ability to accumulate the liquidity of all the third-party cross-chain bridges + the official gateways of different chains + CEXs, delivering one of the cheapest solutions for cross-chain users.
The transaction fee will no longer depend on the remaining liquidity of the destination chain. We will make sure that our fee is in the lowest tier compared to other bridges available in the market now.
So why not just use the bridge aggregators?
As you know, some aggregators may be subject to centralization risks, BoringDAO oPortal remains completely decentralized, open-source, secure, and community owned. The only difference is that we introduce the MM bots. The code of the oPortal bridge itself is not altered and the MM bots will not add any risks to the whole system. Users will not interact with the bots directly and they don’t need to worry about anything regarding the liquidity maintainers behind it.
Given the increased composability, BoringDAO oPortal will become one of the most cost-efficient bridges with the smoothest user experiences.
Cross-chain Vault Aggregator
If DeFi has taught us something, composability must be the first lesson.
The capital utilization efficiency of cross-chain bridges is actually lower than other applications.
So, how can we improve the fund efficiency to further benefit our loyal LPs? We are building the Cross-chain Vault Aggregator based on the oPortal bridge, to provide BoringDAO users and LPs with the best yield opportunities on all the chains we support.
Instead of having fragmented liquidity scattered over various blockchains that remain untouched most of the time, in the oPortal V3, only a relatively small amount of liquidity will remain on each chain (which can satisfy 90% of the users’ needs).
On top of that, there will be some flexible amount always sitting on Polygon or BSC, which are available to be moved to desired destination chains at any time to fulfill large transactions once needed (hence can satisfy more than 99% of the users’ need).
In this way, the capital efficiency can be dramatically increased, since majority of the liquidity now can be utilized in other ways such as mining and farming to generate passive incomes with the lowest risk/reward ratio across all chains that oPortal supports, rather than being restricted on a single chain.
Hence, just one click in the vault, you will become a bridge + yield aggregator LP! 🤑🤑🤑
LPs can not only benefit through the transaction fees collected as before, but also enjoy extra rewards earned from the best pools in the market. The investment strategy for the vault will be carefully managed by the research team from BoringDAO and Nothing Research (one of the partners of BoringDAO). We believe that it will bring positive impact to the $BORING holders, as fewer rewards will be needed to incentivize the LPs, hence further decreasing the inflation.
Pretty impressive right? Stay tuned for more information!
No matter the bear market or bull market, we continue to build. 💪🏻