Strangelove Labs and Duality to reduce Liquidity Fragmentation with Swap-and-Forward
Jul 14, 2023
Liquidity fragmentation in the interchain has been a major barrier to the adoption of the app-chain thesis. It’s obvious that there are major product gains in building full-stack applications. Unfortunately in building an app-specific chain, you inhibit the access to liquidity on other applications. The good news is that the problem is less that users have liquidity on separate chains and more-so that interoperability between chains is still nascent.
In comes swap-and-forward. Swap-and-forward on Duality will allow users on other IBC enabled chains to remotely call swaps. Before swap-and-forward, if you wanted to make a swap on an IBC connected chain and forward it elsewhere you needed to sign three transactions :
- Bridge from source to the chain with the DEX chain
- Swap on the DEX chain
- Bridge to the destination chain from the DEX chain
With swap and forward it’s a single signature :
- Call swap-and-forward from the remote chain to the destination chain, using Duality
This will enable a new wave of cross-chain integrations that will be useful for various use-cases such as :
DEX aggregation with Squid router
Cross-chain arbitrage using Skip auctions
Cross-chain liquidations from Umee or Agoric
If you’re interested in working on or collaborating on any of these ideas or others feel free to dm Duality Labs on twitter.
About Duality Labs
Duality Labs is building the fair, efficient markets of the future. The first iteration of this goal is the Duality Cosmos chain. With a novel mechanism design and incentive system, Duality is challenging the status quo of complicated, unsustainable DEXes, while fusing the best of AMMs and order-books.
Strangelove is a stalwart contributor to the growing Cosmos ecosystem (“the Interchain”). The company focuses on open source Inter-blockchain Communication software (IBC) and adjacent commercial infrastructure products to drive and capture value in the emerging Interchain economy.