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A Brief Details Of Cross-Chain Liquidity

The long-term platform for cross-chain transfers must be as scalable and highly secure as throughput economies skyrocket. This exchange makes Connect the best place for cross-chain transfers and contract calls.

Users are guaranteed that funds are safe, the network can be expanded quickly with a new apps ecosystem, transactions are fast, and core network fees are completely avoided. There are some companies that provide cross-chain liquidity services via https://rampdefi.com.

Liquidity networks are great for this because they:

Minimized trust: Users are guaranteed by a locking mechanism that the router cannot escape. Cross-Circuit Transfer Protocol (NXTP) Connext is the only generic interoperability solution that does not add new trust assumptions. Bridges that rely on external auditors are generally less secure, requiring users to rely on third-party funds and data.

Extensible: Bridges that use their own chain validators to verify transactions have a stronger guarantee of trust. However, they must be custom-made for each chain pair and cannot quickly add support for new chains such as liquidity networks (for example, Ethereum pool bridges can only be used between this overall package and Ethereum L1). 

Capital Efficiency: Bonded/guaranteed connectivity solutions require validators to provide assurance for network service delivery. This safety must be increased in proportion to the economic capacity of the bridge, or the incentive will be lost.

For a liquidity network like Connext, there is no theoretical upper limit to the capacity of the gaming economy that the network can safely activate because capital blocking is separate from the security model.

Superior UX: Because verification is done locally on the liquidity network (between partners rather than requiring global consensus), cross-chain transfers are fast. The protocol is L1 versus L2 agnostic as long as the circuit is EVM compliant. Connect allows users to make L2-L2 transfers directly at ground level and completely avoid L1 transaction fees.