The decentralized ecosystem consists of over 6,000 cryptocurrencies that currently operate in closed-off, isolated infrastructures, unable to access neither the liquidity nor the functionality offered by each other. Protocols and communities across the entire industry are continually battling each other to claim their spot in the emerging Web 3.0 paradigm. And while the rise of Web 3.0 is inevitable, it’s still too early to tell what the ecosystem will look like — will it evolve into a monopoly, with the entire space dominated by a single blockchain platform, or will it turn into an oligopoly, where a handful of protocols control the market?
What is clear, however, is the need for bridging these fragmented networks. With these 6,000 different cryptocurrencies on the market encapsulating over $752 billion in value, there has never been a more pressing need for porting liquidity across them. As more institutional investors join the crypto space, the need for better efficiency and flexibility increases almost exponentially.
The crypto industry was built on a fundamental premise; the fragmentation and limitations endemic to traditional finance needed to be replaced with a better, more robust system built with user needs front and center. The world of traditional finance, while dealing with a wide variety of asset classes, is a deeply flawed one — the limitations it essentially put upon itself do more to facilitate rent-seeking behavior than actually benefiting its users. Unfortunately, several of these legacy encumbrances have been grandfathered into our new world of blockchains.
When the need to transfer assets from one blockchain system to another occurs, users are kept in the dark on exactly what goes on under the hood, and are forced to pay high fees to facilitate technically simple transfers. For example, when writing this post — the cost of transferring value on Ethereum is almost at all-time high of $10+ and if you want to use a service like Uniswap to swap tokens — the fees is north of $50.
Router Protocol wants to resolve this issue, which is becoming increasingly important as the world gets more globally connected. We at Router believe that the future lies in cross-chain interoperability. The crypto industry doesn’t have to suffer from the fragmentation seen in traditional finance.
One of the most integral parts of the emerging Web 3.0 paradigm is liquidity farming. While opinions are divided on the topic, liquidity farming is here to stay and should be seen as a largely positive development in the crypto industry. Unlike the data farming that shaped the Web 2.0 era, yield farming in the Web 3.0 ecosystem will provide users with real, tangible benefits — a steady trickle of yield.
With Web 3.0 being all about startups building products around various facets of capital flows, the rise of financial primitives such as loans seems inevitable.
But, the trustless, open-source nature of the emerging Web 3.0 ecosystem is set to result in a large number of closed-off projects, each competing for a tiny part of the market. Such a fragmented market is set to produce multiple Layer 1 and Layer 2 solutions working to make their systems more efficient.
As a cross-chain liquidity infrastructure primitive, Router Protocol aims to provide a seamless bridge between those Layer 1 and Layer 2 blockchain platforms. Aside from connecting blockchains and enabling a free flow of information, Router will also make smart order-routing possible, enabling users to swap their assets from different networks seamlessly. Utilizing Router will be completely transparent and users will be able to see what goes on “under the hood” every time they interact with the protocol.
Being transparent, however, doesn’t have to mean being complicated. Those interacting with Router Protocol will be able to enjoy a rather hands-off user experience — when swapping assets, the system will automatically find the best market price and execute the swap.
The first major product coming from Router Protocol will be a bridge between the Matic Network and Ethereum. A bridge between Matic and Ethereum will provide a scaling solution to Ethereum that is near-instant, low-cost, and incredibly flexible. It will enable users to get the best of both worlds — Matic users will reap the benefits of Ethereum’s unprecedented liquidity, while Ethereum users will be able to utilize Matic’s scalability and high throughput.
In the future, Router plans on building bridging infrastructure between multiple other blockchains and blockchain solutions. Stay tuned as we roll out new products and expand our roadmap in the coming weeks. Router protocol will extend interoperability to many different layers. We are currently considering Avalanche, Binance Smart Chain, Cardano, Algorand, Solana, Stellar, Polkadot, and Litecoin.
Router Protocol is a cross-chain liquidity infrastructure primitive that seamlessly provides bridging infrastructure between current and emerging Layer 1 and Layer 2 blockchain solutions.
Telegram announcements: https://t.me/router_ann