Author: Chen Mo
Core point: Unichain aims to become the central hub of DeFi liquidity across the entire chain. A super application is building an application chain to recycle the value created by the protocol itself.
Built on OP Stack, its core innovations include:
Verifiable Blockchain Construction: Developed in collaboration with Flashbots to quickly process transactions, capture MEV and protect user transactions.
Unichain Verification Network: Solve the risk of single sorter centralization, achieve "verifiable sorting", and faster economic finality.
Intent-driven interaction model: Users only need to care about their own needs and intentions, and the system will automatically select the optimal path to perform cross-chain interactions, without having to worry about the complexity of the underlying execution between chains.
Super apps make it possible for tokens to capture protocol-specific value by building application chains.
Research Report
1/5 · Verifiable Block Construction
Unichain’s Verifiable Block Building process relies on Rollup-Boost, developed in collaboration with Flashbots. It solves three main problems:
Reducing MEV Risk
Increase transaction speed
Provide transaction rollback protection (reduce the risk of users paying high fees due to transaction failure)
How it works
Unichain separates the role of block construction from that of the sequencer, and Verifiable Block Builder is responsible for block construction. The builder runs in a trusted execution environment (TEE) (a secure hardware environment that can execute programs without exposing internal data and generate verifiable proof of execution), allowing external users to verify whether block construction follows specified rules.
The Flashblocks block pre-confirmation mechanism is equivalent to confirming in advance the set of transactions that will be included in the block. Each block is divided into multiple Flashblocks, which allows the block time to be compressed to 200-250 milliseconds, which is much lower than the block time of most current Rollups. In addition, the transaction sorting rules within each Flashblock will be enforced in the TEE environment, which means that users and applications can transparently know the execution order of transactions, thereby reducing the unfairness brought by MEV.
TEE provides Trustless Revert Protection, which detects and removes any transactions that may fail by simulating transactions during the block construction process. This can prevent users from paying unnecessary fees due to transaction failures.
In summary, two things were done. First, the two roles of block construction and sorting were separated, and Flashblocks blocks were built in an open and transparent environment (TEE), which enhanced verifiability, improved transaction efficiency and weakened MEV. Then, a "pre-confirmation" mechanism was introduced in the block confirmation process to include transactions in the block in advance, so that users and applications can know in advance, and make the final packaging confirmation after the pre-confirmation time window has passed.
Although pre-confirmation speeds up the confirmation process of blocks, it is not equal to final confirmation. It means that before transactions are packaged into the final block, users can know in advance that these transactions will be included, which helps to reduce transaction latency. The expected block time of Flashblocks is 200-250 milliseconds. This means that Flashblocks can pre-confirm transactions within this time period. But the actual final confirmation takes more time, because the block will eventually be merged and updated and submitted with other blocks to ensure the consistency of the state of the entire chain. Therefore, the pre-confirmation time window is manageable in theory, and its length directly affects the user's trading experience and the risk management of liquidity providers. A shorter time window means faster transaction confirmation, but it may also bring higher technical requirements and network pressure. In general, the pre-confirmation time window is set to strike a balance between speeding up transactions and ensuring network security.
2/5 Unichain Verification Network
UVN (Unichain Validation Network) is a decentralized verification system designed by Unichain to address the potential risks of a single sorter architecture. It combines Flashblocks and the trusted execution environment TEE to achieve "verifiable sorting".
How it works
Validators are node operators in UVN and need to stake UNI to become validators. Each validator has the right to participate in the verification process and receive corresponding rewards based on the amount of UNI staked.
Unichain's blocks are divided into Epochs of fixed length. At the beginning of each epoch, the current staked amount of all validators is recorded by snapshot, and the reward value of each staked token is calculated. Validators with the highest UNI stake weight will be selected into the active validator set, and these validators have the right to participate in the block verification of the current epoch.
Active validators running Unichain nodes need to stay online to validate blocks proposed by the sorter.
The validator verifies each proposed block and generates a hash signature of the block, which is published to UVN's service smart contract, which verifies these signatures and issues rewards based on the validator's staked weight. If the validator fails to validate the block within the epoch, or participates in the release of invalid block signatures, they will lose the current reward and may face penalties for staked tokens.
In summary, the risks of a single sorter are mainly reflected in the block uncertainty, unfair transaction sorting, and adverse effects on network security and fairness that may be caused by sorter centralization.
The solution that has appeared in the market is to introduce a decentralized sorter and design an incentive reward and punishment mechanism for it, such as Metis. Unichain combines decentralized verification (UVN) and a transparent sorting mechanism (verifiable block construction), and has both verification capabilities and openness and transparency of sorting, which alleviates these problems caused by centralization. The two have their own characteristics, and the difference lies in the balance between efficiency, cost and security. I will not make too many comparisons here.
There are some problems that we often encounter, such as: a single sorter has the power to sort transactions and can decide which transactions are packaged into the block first when packaging transactions. This power may give the sorter the opportunity to extract the maximum extractable value (MEV), that is, to gain benefits from other users' transactions by reordering or inserting its own transactions.
3/5 Intent-driven interaction model
The white paper mentions intent-based cross-chain interaction (ERC-7683: Cross Chain Intents), which converts users’ transaction needs into executable “Intents”, and then the system automatically selects the optimal path to complete these intentions without the need for users to manually operate between multiple blockchains.
A user can submit an intention to transfer 100 USDC from Unichain to the Ethereum mainnet to purchase NFTs. The intent-driven model will automatically identify the intent and select the best path to automatically complete cross-chain interactions and other operations. This design makes the cross-chain transaction process automated and decentralized without the need for trusted intermediaries, reducing the risks of third-party dependence and manual operations, while also achieving the ultimate goal of chain abstraction - separating the complexity of blockchain interactions from the end-user experience. Users only need to care about their own needs and intentions, solving the problem of liquidity fragmentation and the fragmentation of inter-chain interaction experience.
4/5 · Ultimate goal: to become the DeFi liquidity center
Unichain has chosen the OP Stack camp, and can use Superchain's native interoperability to deeply integrate with mainstream L2 externally, such as Base, Mode, OP Mainnet, etc. Between these chains, Unichain can easily utilize the intent-driven model.
As for chains that are not in the OP camp, the standardized design of ERC-7683 enables Unichain's intent-driven model to interact with other non-OP Stack chains. This is achieved through standardized interfaces and smart contract structures (such as CrossChainOrder and ISettlementContract interfaces). As long as different chains follow this standard, or as long as some cross-chain bridges are compatible with this standard, they can parse and process cross-chain intents and participate in Unichain's cross-chain order execution process.
Ultimately becoming an important connection point in the full-chain DeFi ecosystem, providing users with broad and fast access to liquidity.
5/5 UNI’s Value Capture
From the current information, $UNI will be used as collateral for UVN network validators and receive rewards. Its value capture may come from the following aspects:
A possible transaction fee switch (this has been controversial for a long time and has not been turned on yet, and is also facing pressure from various aspects such as supervision)
Blockchain node staking rewards (obtain block rewards by completing node verification work)
MEV capture and distribution: Unichain is built on the UVN verification network and verifiable blocks, and has control over transaction ordering, so it can capture a large amount of MEV, including MEV generated by intention-based cross-chain transactions (for example, by optimizing the execution path of cross-chain orders to ensure that orders are completed at the lowest cost and highest profit when transactions occur). However, these MEV values are distributable and can be returned to users or distributed to validators who stake UNI.
Cross-chain interaction fee capture: Unichain’s ultimate goal is to become the DeFi liquidity center, and the key factor to achieve this goal is ERC-7683, which allows users to interact between multi-chain liquidity without feeling, close to the effect that chain abstraction wants to achieve. This cross-chain transaction and intent-driven interaction model requires the participation of fillers and validators to complete transactions. These roles can benefit from the order fees or settlement fees when processing cross-chain orders and settlements.
ERC-7683
Compared with ordinary L2, Unichain captures additional value in 3 and 4. Before the launch of Unichain, the MEV generated by Uniswap was captured by Ethereum validators and L2 sorters. With the launch of Unichain, this part of the value will be transferred to Unichain. The cross-chain interaction fee will depend on the transaction volume of Uniswap in the entire chain, and whether the transaction scale will increase when such multi-chain transactions can be smoothly interconnected. The fees that originally need to be generated through the cross-chain bridge will also flow into Unichain itself. (Of course, the above does not take into account the potential governance value and the value brought by future ecosystem growth, which are unpredictable) This is a unique way for super applications to recycle the value created by the protocol itself by building application chains.
