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Understanding Cross-chain Interoperability

The Cashmere Labs also allow the exchange of non-pegged assets. It does not use a bridge when switching non-pegged assets like BTC, ETH, and AVAX between L2s and L1. The Omnichain Interoperability Labs are being used by the router. The single side additionally makes use of its own stable pools while using this technique. When the user swaps the X product that is in Chain (a) to the Y product that is in Chain (b), the labs use the 1-inch aggregator and pass over the liquidity of the cashmere labs. Due to this, before making a bridge, the user acquires a Y native asset that is in Chain (b). The exchange of assets will take place separately for each chain. Users will only be given information on the amount of withdraw-able assets from the stable LP between chains. As a result, MEV bots cannot attack between chains during the messaging period. In fact, the Cashmere Labs, with this solution, provide a solution to early liquidity starvation, particularly in L2s.

Crosschain Swap System

Cashmere 7 provides services to the network. To achieve this, uses messaging interoperability. Users can stake stablecoins on all 7 networks. Cashmere makes cross-asset transfers of users between networks without using a bridge. To do this, it uses stablecoin liquidity from these 7 existing networks.
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ScS_c
is swap path of cross-chain aggregator.
nan_a
and
nbn_b
are network type like Avalanche or Ethereum,
ii
and
jj
are stablecoin account.
fif_i
means that
ii
stablecoin account on
nan_a
network.
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If user swap
∆x∆_x
on
nan_a
to
∆y∆_y
on
nbn_b
that using cashmere cross chain aggregator, the swap path is defined to be:
Cross-chain Swap Formula
(1) The system reflects the best price to the user by using the 1-inch aggregator, considering the compensation ratios.
(2) There is no bridge transfer between networks. The messaging interoperability provided by some messaging protocol is used. The inter-relayer messaging system is used. The entire system is fully decentralized.
(3) There will be no change in the asset-liability ratio in the system. Because the inner amount and outer amount are equal.
(4) It includes compensation ratio changes between networks and the amount owned by the network as an incentive for arbitrage bots. Arbitrage bots can dispose of excess in a network based on the principle of Positive slippage.

Mev Resistant

Users won’t be able to send a swap transaction between the chains. The asset swap will take place in each chain separately. Only the information about the amount of the asset that will be granted to users’ withdrawal from the stable LP pool will be delivered between the chains. Therefore, MEV bots won’t be able to attack during the cross-chain messaging period. This system does not completely eliminate the risk of MEV. But it will provide the slippage amounts as a regular decentralized swap operation in a native network. The cross-chain operation does not create an additional MEV attack risk.
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