Ferrum Network

FRMx Token

Dear Ferrum Fam,We recently released a comprehensive deep dive into the architecture of what we believe will be a game changing product for Web3 — MultiSwap. While you can find the full overview of the product <a href="https://docs.ferrumnetwork.io/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/" rel="noopener noreferrer nofollow">here</a>, we thought it’d be a good idea to provide a summary of the technology in perhaps a more digestible format.What is MultiSwap?MultiSwap is a smart routing multichain aggregator that enables seamless cross-chain swaps. With MultiSwap, users can swap ANY ASSET to ANY NETWORK (so long as liquidity for the desired asset exists on that network) and ANY WALLET.<img src="https://miro.medium.com/max/700/1*Pe-zoOHu3NGYkSR-MlyjeQ.png" />Why MultiSwap?It’s no secret that Web3 is becoming increasingly multichain. For investors, end users, and projects alike, the necessity to operate outside of the siloed nature of a single chain has never been more relevant. Let’s break down the main reason ‘Why’ we at Ferrum decided to create MultiSwap.<h2 id="header-0">Porting liquidity to new networks is difficult</h2>Currently, users have to use multiple dApps in order to move their capital between networks. In most cases a user will have to go through the following process in order to move their assets between networks.<ul><li>1st dApp (Origin Network DEX) — Liquidate an asset using a DEX on the origin network into a bridgeable asset</li><li>2nd dApp (Bridge) — bridge the asset to the desired network.</li><li>3rd dApp (Destination Network DEX) — liquidate the bridgeable asset using another DEX into the desired asset on the destination network.</li></ul>This cumbersome routing is full of layers of friction that create massive barriers for users to explore opportunities in different ecosystems and for networks themselves to attract TVL and usage.With MultiSwap, users can enjoy taking part in new ecosystems via a single interface. We believe that a product like this is essential for the adoption of both EVM and non EVM alternative networks and is a major step forward toward a multichain future.How Does MultiSwap Differ from its Competitors?When analyzing whether or not there is product market fit for a new piece of technology, it’s important to understand the competitive landscape in order to create a product that people can justify using over others.So what makes Ferrum’s MultiSwap different? Why should you care? Let’s break down a few of the core features and components of MultiSwap that we are most excited about.<h2 id="header-1">FIBER (Ferrum Inter Blockchain Express Routing)</h2>Let’s take a look at ‘How’ MultiSwap works from the routing perspective. While the user experiences something quite seamless, there are a series of components working in parallel on the backend of the protocol in order for the swap to be successfully executed while choosing the path of least resistance.From a smart contract, module, and blockchain interaction standpoint there are a few core components that enable multi-chain bridging and swapping of assets through the MultiSwap protocol. FIBER is one of those.Asset TypesIn order to understand FIBER, it’s important to first understand the various types of assets as defined by the protocol.There are three main categories of assets:Foundry Assets — Assets that have<a href="https://docs.ferrumnetwork.io/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-bridging/bridge-pool/liquidity-management/liquidity-setup" rel="noopener noreferrer nofollow"> single asset liquidity</a> added to the bridgePool are categorized as Foundry Assets. This liquidity can be added by Ferrum or the Token Administrators of listed tokens.A major benefit of Foundry Assets is that swaps involving Foundry Assets typically skip interaction with an aggregator (1inch) or DEX (UniSwap). Instead, FIBER will prepare a path for Foundry assets to interact directly with the bridgePool; saving liquidity provider fees for the part of the crosschain swap that involves the Foundry Asset.It’s important to note that Foundry Assets are the only assets that are bridgeable across chains as their liquidity is managed by the bridgePool. All other assets must be converted to Foundry Assets to facilitate bridging across chains. This is further described in the <a href="https://docs.ferrumnetwork.io/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/fiber-ferrum-inter-blockchain-express-routing-engine/bridging-and-settlement/multichain-settlement-flow-mcsf" rel="noopener noreferrer nofollow">MCSF</a> and <a href="https://docs.ferrumnetwork.io/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/fiber-ferrum-inter-blockchain-express-routing-engine/bridging-and-settlement" rel="noopener noreferrer nofollow">Bridging &amp; Settlement</a>Refinery Assets — Assets that have pair liquidity added with USDC to an ecosystem DEX are categorized as Refinery Assets. This liquidity can be added by Ferrum or the Token Administrators of listed tokens.Ionic Assets — Assets that don’t fall into the Foundry Asset or Refinery Asset categories are categorized as Ionic Assets. This includes any asset with available liquidity on an ecosystem DEX.Asset &amp; Route OptimizationAt a high level, FIBER is responsible for finding the optimal path to conduct swaps across chains, as well as bridging and settlement; depending on the asset type.After reviewing the parameters of a FIBER request, the FIBER engine determines the categorization of the assets involved into one of the following categories.<ol><li><a href="https://youalreadyknodio.medium.com/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/asset-types/foundry-assets" rel="noopener noreferrer nofollow">Foundry Assets</a></li><li><a href="https://youalreadyknodio.medium.com/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/asset-types/refinery-assets" rel="noopener noreferrer nofollow">Refinery Assets</a></li><li><a href="https://youalreadyknodio.medium.com/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/asset-types/ionic-assets" rel="noopener noreferrer nofollow">Ionic Assets</a></li></ol>The categorization of assets defines the available paths to swap and bridge assets across chains. Foundry Assets will typically skip interaction with an aggregator (1inch) or DEX (UniSwap). Instead, FIBER will prepare a path for Foundry assets to interact directly with the bridgePool,saving liquidity provider fees for the part of the cross-chain swap that involves the Foundry asset.In each case, FIBER not only determines the optimal path between bridgePool vs DEX swaps, but also queries multiple ecosystem aggregators, and DEXs to determine the best possible rate for the swap and bridging of assets across chains.<h2 id="header-2">FORGE (Ferrum Optimal Routing Gas Estimation)</h2>FORGE is responsible for calculating gas and MultiSwap fees for swapping and bridging of assets across chains.FORGE has two main responsibilities:GAS Estimation — FORGE calculates GAS cost for the swap and bridging transactions on the source chain, as well as any necessary <a href="https://youalreadyknodio.medium.com/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/asset-types/refinery-assets" rel="noopener noreferrer nofollow">Refinery Asset</a> or <a href="https://youalreadyknodio.medium.com/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/architecture-and-tech-stack/general-architecture-overview/core-components-of-multiswap/asset-types/ionic-assets" rel="noopener noreferrer nofollow">Ionic Asset</a> swaps on the destination chain.The GAS estimation is transparently shown to the user in the MultiSwap interface. If the GAS gathered according to the forecasted estimation is greater than the actual GAS cost, FORGE stores the excess gas in reserve associated with the user’s address that initiated the swap.MultiSwap Fee Estimation — There is a small fee associated with each MultiSwap transaction. This fee can be paid by users in a fee token of their choice.Fee Tokens: FRM, cFRM, FRMx, cFRMx, Network Fee Currency (ETH, BNB, Matic etc), USDCThe fee is currently set to $1 per transaction. FORGE gets updated price quotes every 30 seconds to represent the value of non-stable tokens equivalent to $1. Fees paid in FRM and FRMx are discounted by 25%. Whereas fees paid in cFRM and cFRMx are discounted by 50%.<h2 id="header-3">Security</h2>MultiSwap uses the same underlying bridging architecture as the <a href="https://medium.com/ferrumnetwork/introducing-the-ferrum-network-cross-chain-token-bridge-56fbc48a09d7" rel="noopener noreferrer nofollow">Ferrum Crosschain Token Bridge</a>. This architecture has proven to be incredibly secure as evidenced by the content of <a href="https://medium.com/ferrumnetwork/a-lesson-in-security-ferrum-cross-chain-token-bridge-cd0fb78f6277" rel="noopener noreferrer nofollow">this article</a> and has been responsible for <a href="https://medium.com/ferrumnetwork/ferrums-highly-secured-multi-chain-token-bridge-hits-138-million-in-total-transacted-volume-b949cc244717?source&#61;collection_home---4------16-----------------------" rel="noopener noreferrer nofollow">nearly 200 million USD in transacted volume</a>.The main factor behind the security of MultiSwap has to do with the removal of the ‘Lock and Mint’ and ‘Burn and Mint’ mechanisms which violate the principle of single responsibility and introduce increased risk. These impact areas include the significant value of assets locked in bridge pools known as ‘honeypots’ along with the exploit of the protocol itself with it’s ability to mint a limitless amount of tokens.Due to the fact that MultiSwap does not need to lock up an equivalent amount tokens in order to maintain the peg of wrapped assets on destination networks, the amount of liquidity that is required is far less than most interoperability protocols. Furthermore, MultiSwap eliminates the need to bridge multiple assets by using USDC as the routing token. Therefore, instead of millions of dollars sitting idle in bridge pools, only 10s of thousands are necessary.<h2 id="header-4">Enhanced UX/UI</h2>Moving assets across networks can be quite intimidating for many folks. Not only is it the job of the protocol to securely transfer assets across networks but its also the project’s responsibility to make the user feel secure when doing so. Many multichain products are fairly complicated and even scary to use. Often times users are left in the dark about where in the process the transaction lies at any given moment.In the case of MultiSwap, the UX/UI is going to be a step up from even Crucible, which is our most intuitive product to date. MultiSwap ensures that folks are properly guided through the process and that at no point do they feel lost. If you’ve never used a bridge or any multichain product in the past, you will still be able to use this product without the need for documentation or detailed instructions. Just follow the prompts on the screen! For some sneak peaks into what MultiSwap’s UX/UI will look like, check out the photos below.<img src="https://miro.medium.com/max/700/1*7pzM40Z8w8efZJV02UIalQ.png" /><img src="https://miro.medium.com/max/700/1*bZftcWX28qBSEpVz6e5k7Q.png" />In ConclusionThis article is meant to serve as a high level overview of the what, why and how of MultiSwap. However, there is so much more under the hood of this groundbreaking product and it deserves a much deeper dive. Be sure to check out the <a href="https://docs.ferrumnetwork.io/ferrum-ecosystem/v/infinityswap-and-bridge-architecture-overview/" rel="noopener noreferrer nofollow">MultiSwap Architecture doc here</a>.Also be sure to watch our Team Chat — Introduction &amp; Overview of MultiSwap here!<react-video url="https://youtu.be/afmDw1VPCB0"></react-video>Stay tuned!Very truly yours,The Ferrum Network TeamAbout Ferrum NetworkFerrum is ushering in the era of blockchain interoperability 2.0. Powered by a multichain messaging engine known as Quantum Portal, Ferrum Network’s mainnet will bring value, data, and functional interoperability to every chain in the industry.Utilize Ferrum Network to build and deploy solutions on one network and instantly enable multichain functionality without the burden or technical debt that comes with managing a multichain infrastructure.Ferrum Network Important Links<a href="https://ferrum.network/" rel="noopener noreferrer nofollow">Website</a> | Telegram | Twitter |<a href="https://www.youtube.com/channel/UCN658dMRTaH4C4dP32VHi6Q" rel="noopener noreferrer nofollow"> YouTube</a> | <a href="https://discord.gg/HEfKq57asd" rel="noopener noreferrer nofollow">Discord</a>

MultiSwap Architecture Review

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