2024 is undoubtedly the first year of chain abstraction. We have witnessed the development of this narrative from scratch to the launch of the product. After 12 months of hard work, experience has proven to us that neither the theory that chain abstraction is useless nor the theory that chain abstraction is a quick win is wrong. The transformation of the on-chain transaction paradigm is bound to be a protracted battle.
My story: from chain abstraction researcher to builder
My interest in chain abstraction originated from a conversation with @coin_casanova in July. At that time, I was working as a researcher at Mint Ventures and gained a small wave of attention with a few research reports. This is how I started chatting with casa.
One day casa suggested that I look into $ACX (Across Protocol’s token, listed on Binance in the last month of 2024). At first glance, I thought it was a cross-chain bridge, and it felt like a relic from the previous cycle. But after taking a closer look, I found that Across uses an "intention-based architecture" and is really faster than other cross-chain solutions. For speed and lower price, the Across team also cooperated with Uniswap to launch the cross-chain intention standard ERC-7683.
Source: ForesightNews
As my research on $ACX deepened, I found myself falling down a rabbit hole of new concepts: cross-chain bridges, cross-chain communication, interoperability, intentions, chain abstractions... it was confusing. As a researcher, I am very picky about the selection and use of concepts, but at that time, I could not find any articles that could help me clarify the relationship between these concepts, whether in Chinese or English. Not wanting to do anything else, I simply rolled up my sleeves and wrote an article myself, called (Using Problems as Methods: A New Architecture for Understanding Chain Abstraction).
Source: ForesightNews
The reason why I choose "chain abstraction" instead of cross-chain and interoperability as the research object is because in my classification, chain abstraction is a very high-dimensional narrative that covers many specific technical paths, so I combine cross-chain and interoperability. Interoperability is included in the chain abstraction. And in this research report, I focused on expressing my optimism about the use of intent architecture and chain abstraction solutions that are directly oriented to users. If you follow the clues, you can find Across Protocol, and dig down to UniversalX, which was just launched less than a month ago. @UseUniversalX.
Interestingly, during the writing process of this research report, I noticed that Particle Network’s Blog (@CarlosCanCab, @TABASCOWeb3) covers a large number of very professional chain abstraction research. Combined with Li.Fi’s Blog (@arjunnchand), basically The article helped me complete the basic knowledge from the most classical cross-chain bridge to the most emerging chain abstraction. I also had the pleasure of putting the Particle Network into my Chain Abstraction project diagram.
Source: ForesightNews
One day in October, the CEO of Particle Network @0xpengyu contacted me through a mutual friend. After a collision of practical and unconventional thoughts, my enthusiasm for the blockchain abstraction business expanded to the point where I needed to get involved immediately. The gears of fate turned into place, and I joined Particle Network. As a researcher, I was also responsible for the overall construction of the Chinese community.
Two rebuttals: The theory that chain abstraction is useless is wrong, and the theory of quick victory is also wrong.
My research process at Particle Network began with the "Misunderstanding Clarification" series. This is because although chain abstraction is already a mature system in the West, a large amount of research content has not been systematically spread to the Chinese area, which has led to many misunderstandings derived from the literal meaning. To this end, I wrote 4 articles in a row, pulling out nine major misunderstandings about chain abstraction (vs cross-chain bridges, intentions, multi-chain wallets...) and giving a formal definition.
(Common misunderstandings about "chain abstraction" (1))
(Common misunderstandings about "chain abstraction" (2))
(Common misunderstandings about "chain abstraction" (3))
(What exactly is the chain abstraction? A formal definition)
Source: ForesightNews
Refuting the "theory that chain abstraction is useless"
These articles later became the opportunity and motivation for me to open up and participate in chain abstract discussions. As expected, the promotion of the new narrative of chain abstraction when the market as a whole is indifferent to narratives first attracted a wave of negative voices saying that "chain abstraction is useless". The views of these people are nothing more than what I mentioned in three common misunderstandings. As summarized and analyzed: I understand chain abstraction, isn’t it just xxx...old wine in new bottles...there is no need...
The reason why "chain abstraction is useless" is wrong because their understanding of chain abstraction is from a one-sided, mechanical, and static perspective. They simply equate chain abstraction with things they have seen and are familiar with before. Without understanding In the case of track evolution, we refuse to see the innovative points and progressive significance of chain abstraction.
This can be broken down into two types of errors:
One type is a fundamental error, which means a systematic bias and blindness. The most representative one is the belief that Web3 will only have one or two chains in the future. The response to this kind of error is simple - you can't build the entire Web3 on a state machine. But it is difficult to correct this kind of view, because he fundamentally refuses to see other possibilities besides his own position.
There is also a type of accidental errors, such as confusing chain abstraction with multi-chain wallets, cross-chain bridges, and intentions. This type of error can basically be solved by reading my article. This is also the main significance of our continued popularization of chain abstraction. .
Refuting the "quick-win theory of chain abstraction"
With the advancement of the chain abstract narrative and the progress of chain abstract product delivery of leading projects such as Near, Uniswap, Safe, and Particle Network, chain abstraction has successfully attracted the attention of more CEX and CEX users, and set off a wave of excitement by the end of 2024. Wave chain abstract hot. Overnight, it seems that chain abstraction is the future and it has become a consensus among the people. However, we have seen another layer of crisis under the hype - "chain abstraction quick victory theory".
Specifically, some people underestimate the objective technical difficulty of realizing chain abstraction and ignore that chain abstraction is a complex and systematic project that involves the re-architecture and optimization of infrastructure, intermediary software, application layers, etc. In essence, they still hold the backward concept that "chain abstraction is just a repackaging of xxx", so they have unrealistically optimistic ideas about the popularity of chain abstraction - xxx project can also be done, but it has not been done yet. Really It’s quick to make.
There are also some people who admit that chain abstraction is a track with thresholds, but they are too pessimistic about the players in the current market, so they turn to hope that the exchange's wallet team will "end" and "dimensionality reduction strikes" and quickly unify market. They do not understand that chain abstraction is never an isolated infra narrative, nor is it a simple stack of features. Instead, it has traces as AA, modularization, solver network, AltVM, Appchain and other infrastructure are brewing and maturing. It is a mature track that follows the ground, and the top players here have a deep accumulation.
To summarize the problem:
Is the chain abstraction useless? --no. This kind of thinking is a short-sighted mistake, blinding one's vision. Chain abstraction will eventually be implemented.
So can the chain abstraction win quickly? --cannot. This kind of thinking makes the mistake of farsightedness again, thinking that you are in a superior position. The transformation of the on-chain transaction paradigm represented by chain abstraction is a protracted battle.
Stage analysis: Why is the transformation of on-chain transaction paradigm a protracted battle?
The universality and particularity of contradictions
Let us first analyze the universality of contradictions. Like all forms of transition from old to new, the penetration of chain abstract applications takes time, and the migration of on-chain transaction paradigms takes time. In this process, we will see that the old, fragmented multi-chain ecosystem is unsustainable, and the development of applications built on it will face increasingly obvious bottlenecks, and more and more dApps that adopt chain abstract architecture will gradually emerge. , unknowingly chain abstraction has become the standard configuration of almost all on-chain scenarios, and there must be a certain scenario where the potential of chain abstraction + dApp will completely explode.
After talking about universality, let’s discuss the specificity of chain abstraction + on-chain transactions. Why do we think the transaction scenario is an opportunity for the explosion of chain abstraction? Because this scene is just like the porn industry of Web2, it is the first destination for all emerging technologies (VR, AR, mobile network, AI). The reconstruction of Web3 trading scenarios is the most anticipated native narrative in 2025. The biggest opportunity here is the possibility of CEX on the entire chain brought by chain abstraction. Permissionless DEX assets + self-custody accounts + CEX-level liquidity experience = next generation on-chain trading platform. All three requirements are indispensable.
The basis and stages of protracted war
Then someone may ask, how long will the protracted war last? The logic of chain abstraction is so smooth, when will it explode? ——No one can give an accurate prediction here, but we can analyze the many parties involved and observe the changes in their power.
We must first admit that the transformation of the on-chain transaction paradigm requires the continued prosperity of new assets and new users on the chain. Since the inception of Pump.fun in this cycle, on-chain assets have exploded. Memes and AI agents have provided enough hype points and benefit opportunities, and users have begun to migrate from CEX to on-chain. At this time, the main contradiction becomes the contradiction between the people's significantly growing trading needs after the explosion of assets and the inability of the centralized exchange's "Editor's Choice" currency listing model to cover hot spots in large quantities and in a timely manner. In terms of the appeal of spot business, Trading Bots, DEX aggregators, in-wallet trading functions, etc. have all taken a share of the pie from centralized exchanges below Tier 1.
But at this time, it is still too early to badmouth exchanges and believe that DEX will completely replace CEX. The spot business of Tier1 exchanges still enjoys currency listing credit and deep liquidity, and perp is also an important source of income for most CEXs. Obviously Binance Square users do not need to be converted into on-chain P-juniors to make money, this is one.
Moreover, as fat applications gradually replace fat protocols, more and more applications will choose to launch via Appchain or App Rollup in the future, and a multi-chain future is a foregone conclusion. The current fragmented multi-chain environment has greatly hindered users from exploring and managing multi-chain assets. Although there is progress in AA and interoperability protocols within each ecosystem, user education, developer education, and product adoption are not One day's work, this is two.
Therefore, although the assets on the chain are extremely abundant, users are migrating to the chain, and the general direction of multi-chain future is certain, the situation in the process is constantly changing. However, as long as we analyze the trends, we can clearly find the foundation of chain abstract products - to seamlessly connect and explore the potential of the multi-chain world, including liquidity, users and developers. For example, UniversalX’s most fundamental competitive advantage lies in the liquidity layer. By grasping this, we can lock in the most potential multi-chain transaction user groups and transform them into Universal How many times have I experienced "I can't go back after using UniversalX" (similar user feedback).
Source: ForesightNews
Chain Abstract Exchange as Endgame
Let’s talk about why time is finally on the side of the chain abstract exchange represented by UniversalX? Why not multi-chain wallets, trading bots and aggregators?
The first is the non-custodial attribute, which is compared to Trading Bot’s custodial wallet. We are not saying that custodial wallets should not exist or will disappear, but we are saying that it cannot exist alone. Users will eventually have to transfer assets to a non-custodial wallet. As on-chain security awareness increases, we believe there will be more and more products that insist on non-custodial attributes.
The second is the abstract property of the chain, which is relative to multi-chain wallets and aggregators. The current multi-chain wallet only "connects" to multiple chains and plays an aggregation role. Although many wallets have also launched some optimizations on gas payment, essentially the user's assets are still scattered on different chains and are not connected. During use, it is still necessary to manually switch between different chains and transfer assets across chains. But we cannot require every user to be familiar with the knowledge from private key management to new chain cross-chain. I have done a science popularization of multi-chain wallets before, and its complexity is quite a headache even for a self-proclaimed professional user like me. . As for aggregators, most of them currently only support single chains, while a few support multi-chains. The range of assets they cover is also quite limited, which is far from achieving the effect of "opening up multiple chains".
Source: ForesightNews
Finally came the specific competition stage. The market for products traded on the chain will most likely repeat the three-stage formula:
competing demands;
rate competition;
Business model competition.
The current endless emergence of new tools and new products proves that we are still in the first stage of demand competition, but specific product functions such as smart money, address monitoring, chip analysis, etc. are already showing signs of commercialization. When user needs are almost satisfied by the products on the market, the second stage will be entered, which is the stage of rate competition. In order to seize the market, products will engage in "price wars" until they reach a relatively stable state. The last stage, which is also the most testing of the project’s long-term operational capabilities, is business model competition.
UniversalX meets the needs we have analyzed before - firmly grasping the foundation of multi-chain seamless liquidity without affecting the integration of increasingly commoditized advanced data functions.
The more confirmed the multi-chain trend is, the clearer the need for UniversalX will be; the clearer the need for UniversalX will be, the more confirmed the multi-chain trend will be. This positive spiral will give UniversalX different bargaining power from non-chain abstract products, giving it an advantage in the rate competition stage.
In the final stage of business model competition, UniversalX’s answer is also clear – L1+ infrastructure + flagship application. L1 Particle Chain is a public chain business model, the chain abstract infrastructure Universal Account is a B2B2C business model, and UniversalX is a typical 2C exchange model. Each layer is clear and mutually supportive.
Source: ForesightNews
in conclusion
At this point, my discussion is almost over. This is a long article but not a casual article. What I hope to convey is nothing more than two points:
As builders, we never lack for struggles and doubts, but always choose to believe and move forward.
The implementation of chain abstraction is a protracted battle, and the transformation of the on-chain transaction paradigm has just begun.
My research and opinions have their own shortcomings, and I hope to receive your corrections and additions. Looking forward to your attention and hope for the third consecutive year!
This article is reproduced with permission from: (ForesightNews)
Original author: HelloLydia¹³
"2025 Chain Abstract Situation Analysis!" How to transfer the paradigm of on-chain transactions from concept to practice? 』This article was first published in "CryptoCity"
