Router Chain Use Cases: Enabling Cross Chain Interoperability for Web3

As the web3 ecosystem continues to grow, interoperability has become a key focus for developers and users alike. The ability to seamlessly move assets and data between different blockchains and protocols is essential for the growth and adoption of decentralized finance (DeFi), non-fungible tokens (NFTs), and other web3 applications.

Solution to this problem is Router Chain, a Layer 1 blockchain using Cosmos’ Tendermint Consensus to solve extant problems in Blockchain Interoperability. In this article, we will explore some of the most promising use cases of Router Chain.

Use Case 1 — Cross chain Stable Coins:

Stable coins are cryptocurrencies that maintain a stable value relative to an asset or a currency. However, these stable coins usually exist on a single chain, which makes it challenging to transfer them to other chains.

Router Chain’s technology can enable stable coins to become chain agnostic and enable the transfer of any stable coin natively across chains via a burn and mint mechanism to any chain supported by Router Chain. This approach will eliminate the need for centralized bridges or synthetic ‘bridged’ versions of the stable coin, which can lead to fragmented liquidity, security problems, and a complicated user experience.

Use Case 2 — Cross Chain Governance:

Governance is a crucial aspect of decentralized networks, and cross-chain governance is essential to ensure that communities are represented fairly across multiple chains.

Router Chain provides a governance contract that allows users to create and vote on proposals, with the voting power of a user determined by the snapshot of their token holdings when a proposal is created. The inbound and outbound module of Router Chain serves as a cross-chain synchronizer to communicate data and voting results between other chains and Router Chain. Router Chain’s middleware contracts can help a multichain protocol add some logic in their governance, giving more voting power to users that meet some specific requirements, like holding a specific NFT or voting from a particular chain.

Use Case 3 — Cross Chain Swap Aggregator:

Cross-chain swap aggregators allow users to swap or transfer tokens across multiple chains. However, most of these aggregators are centralized, which raises concerns about security risks and potential bias in the code. Router Chain’s decentralized and fast oracles enable users to query and aggregate off-chain data from Router Chain and perform transactions.

Router Chain provides the possibility of searching for the most optimal path in the source chain and being able to split the trade between different chains, depending on each chain’s liquidity, optimizing the amount received by the trader.

Use Case 4 — Cross Chain Payment Application:

Currently, users can only disperse funds to the same chain from where they initiate the transaction. Router Chain can enable a user to transfer funds to multiple chains in a single transaction, making cross-chain payments simpler and more efficient. For instance, a user can disperse their funds to users on chains A, B, C, by specifying a list with each item containing four properties: address, chain, token, and amount. The cumulative funds to be dispersed on each chain would be transferred, and then the funds with respective amounts and addresses would be dispersed, saving time, fees, and improving efficiency. The same platform can be used to get paid in crypto from various chains, making cross-chain payment simple with a personalized link.

Use Case 5 — Cross-Chain NFTs:

Cross-chain NFTs are crucial for NFT-based games that deploy their games on multiple chains. These projects need the ability to move their NFTs across chains. Router Chain can achieve this through a mint/burn or lock/unlock mechanism.

Let’s say a user requests an NFT on Ethereum. The project’s smart contract on Ethereum passes the request to the corresponding contract on Router Chain. The contract on Router Chain will mint an NFT and send it to the user’s address on Ethereum. The smart contract on Router Chain will maintain accounting for all the NFTs, whether or not an NFT ID is used, and if yes, where the NFT exists.

When the user wants to move the NFT from Ethereum to Polygon, the project’s contract on Ethereum will burn the NFT and pass the instruction to the contract on Router Chain to mint an NFT of the same ID and URI and send it to Polygon while maintaining the accounting of all minted NFTs.

Use Case 6 — Cross-Chain NFT Minting:

Currently, users can only buy the NFT on the chain the NFT is being minted. This means that users need funds on that particular chain and need to bridge funds, often using an offsite bridge. If the mint is unsuccessful, it leaves the users with funds ‘stuck’ in a chain that is not of their choice, forcing the user to incur more fees if they want to bridge them back to the original chain.

With Router Chain, an NFT project can deploy a contract on all chains from where minting will be possible. The contract on the source chain will take funds from the user, lock these funds on the source chain, and send a message to the destination chain to mint the NFT. This way, users are able to mint NFTs regardless of where their funds are located. In the case of a limited mint, users’ funds are refunded if the mint is not successful.

For instance, Alice wants to mint an NFT from a chain B-based project. She finds out that her chain B wallet does not hold the required balance, but her chain A wallet does. From the minting site UI, Alice connects to her chain A wallet, specifies the amount of mints, and executes the transaction.

Use Case 7 — Cross-Chain Yield Aggregator:

A cross-chain yield aggregator enables users to view all farms across all chains and stake from any chain they have funds on. In the current ecosystem, yield aggregators require users to move funds to the desired chain and then stake into the contract of their choice.

However, Router Chain enables users to stake in the Moonriver farm even if their funds are located in the BNB chain, for example, without generating a lot less yield if they don’t find a suitable bridge to move the funds. The contract on the source side takes funds from the user and then initiates a request to the destination chain to transfer the funds and stake the funds. After staking is complete on the destination chain, the LP token will be given to the user, and they can still retrieve their principal along with the yield earned on the initial source chain.

Use Case 8 — Cross-Chain NFT Marketplace:

Currently, NFT marketplaces are specific to a chain and don’t provide any cross-chain capabilities. The challenges remain that the user first needs to bridge funds and then swap it to the right tokens to buy. Also, the user needs to have the native token on the chain they want to purchase the NFT.

Router Chain can solve this and enable users to buy NFTs from any chain they want. Users will be able to place a bid from any chain they are at, on the NFT they want to purchase, and the seller is able to see all the bids and accept a bid from a user on another chain. Cross-talk will be initiated from the destination chain to the source for accepting the bid, funds debited from the buyer’s account, transferred to the seller’s wallet, and an instruction from the source chain to the destination chain will transfer the NFT to the buyer’s wallet.

Use Case 9 — Cross-Chain Lending/Borrowing Protocol:

A cross-chain lending/borrowing protocol would enable users to lend their tokens in the chain with the highest yield and borrow from the chain with the lowest interest. At the same time, the users can deposit their funds from any chain they are located at.

For instance, Router Chain would enable users to lend $ETH in Arbitrum and borrow $USDC in Polygon, even if their funds are located in Ethereum. This way, users can maximize efficiency and reduce transaction costs.

Use Case 10 — Cross Chain Wallets:

One of the primary challenges faced by web3 users is the need to have native coins from every chain they want to interact with, resulting in the use of bridges and ending up with small quantities of coins through various wallets and chains. This makes it difficult to keep track of all funds distributed across different chains, and often requires the use of 3rd party dApps that are not always accurate.

Crosstalk, powered by Router Chain, enables wallets to be truly interoperable, allowing users to interact with every chain directly with their wallets no matter where their funds are deposited. This eliminates the need for bridges and offers the benefits of being able to see and track all funds across multiple chains.

Use Case 11 — Cross Chain Staking:

Validators and delegators are crucial for enhancing the security of chains and helping them to run and validate blocks. However, staking tokens in smaller chains that don’t have many connections can be challenging, requiring users to bridge their tokens to a specific chain, find the native coins of the chain, and swap tokens to stake.

Router Chain offers an easier path for both chains and validators, allowing validators to create a staking platform that allows anyone who wants to delegate their tokens to them to do it to any chain they support from any chain their funds are located at. Chains can also partner with Router Chain and offer staking options that welcome tokens from any chain instead of just their native tokens.

Use Case 12 — Cross Chain Prediction Markets:

Prediction markets are currently limited to single-chain or multi-chain options, which means users need funds on that particular chain before they can place a bid. This creates a hindrance in the user journey for accessing these applications.

Router Chain enables users to place bids from any chain and redeem rewards on the chain of their choice. When placing a bid, the funds are transferred from the source side to the destination contract, and the respective number of shares are issued and saved in the mapping on the Polygon contract. In case the user wins, they can claim their reward from the Ethereum chain via a cross-chain transfer. Users can also sell their positions on the UI, and the funds will be locked on Polygon, with an instruction triggered to transfer the shares to the buyer and the funds to the seller.

Use Case 13 — Cross Chain NFT Lending and Borrowing:

NFTs have become a popular asset class in the web3 world, with various use cases ranging from selling digital assets to P2E gaming. However, NFTs have mostly been used in silos and their integration with DeFi has been limited to platforms where users can borrow funds for their collateral. A new use case has emerged that merges both NFT and DeFi lending and borrowing use cases.

In this use case, users can lend their NFTs for funds while the lender earns interest for the funds they lent. However, the existing platforms for NFT lending and borrowing are limited to a single chain. In some cases, the holder of the NFT might need the funds on a different chain than where the NFT is located, or the lender has funds on a different chain than where the NFT is located. This problem is not solved seamlessly by the existing platforms, and users need to bridge their funds to the required chain and then be able to provide funds to borrowers.

Router Chain solves this problem by allowing users to list their NFTs and specify in which chain they need the funds. Lenders can make offers for the NFT with information such as funds they are willing to lend, the duration of the lending, and the chain on which they have funds. Once the borrower accepts the bid from one of the lenders, both the borrower and the lender will receive the funds/NFT in the chain of their choice.

This streamlined process facilitates the growth and adoption of NFT lending markets as well as increasing the value of the NFT market as a whole.

Use Case 14 — Cross Chain Perpetuals Protocol:

Perpetual exchanges have become very popular in the decentralized space, enabling users to trade on leverage without an expiry date for their positions. However, users are being forced to use one protocol or another depending on which chain their funds are located in, instead of being able to use their favorite protocol independently of the chain they trust.

Router Chain solves this problem by enabling users to deposit collateral in their desired protocol, regardless of which chain they are on.

Router Chain’s Devnet is now LIVE: v2.routerprotocol.com

About Router Chain:

We have developed a Layer 1 blockchain using Cosmos’ Tendermint Consensus to solve extant problems in Blockchain Interoperability. This will solve Security and Scalability by unleashing the power of decentralization. Router Chain will provide a modular, composable framework for true-blue cross-chain dApps to be built in web3.

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