Gitcoin
Category :
Research
Date:
Mar 20, 2024
Project duration :
4 Weeks
Project link :
Problem
GitCoin Grants sought to improve the user experience for cross-chain donations while adhering to strict decentralization and cost-efficiency principles. Raid Guild was tasked with researching and testing bridging solutions to meet these goals.
The primary challenge? Balancing low trust assumptions, low costs, and multi-chain support while maintaining transparency and ease of use for donors.
Project Constraints
After discussions with key stakeholders, the following constraints emerged:
Cost-Effectiveness: Bridge and transaction fees must be minimal to ensure accessibility for all donors.
Trust Minimization: Solutions should not rely heavily on centralized entities.
Multi-Chain Compatibility: Support for all AlloV2 chains (except PGN) was a must.
Native & Stablecoin Support: Prioritize widely used tokens to maximize adoption.
Transparency: A mechanism to accurately track donor information (e.g., `msg.sender`) is required.
Process
Phase 1: Research
The team evaluated multiple bridging solutions to identify candidates that met the project constraints. Solutions considered:
Connext: a base protocol bridge
Li.Fi: a bridge aggregator
Decent: a bridge aggregator
Solutions excluded:
CCIP (chain limitations)
LayerZero (bridging only, no liquidity support)
Stargate (partially integrated via Li.Fi)
Key Insight: While all shortlisted solutions had potential, none were a perfect fit without trade-offs. For instance, Connext lacked Fantom support, a significant gap.
Phase 2: Testing
To thoroughly evaluate the solutions, the team simulated cross-chain transactions using a structured testing environment:
1. Mock Contracts:
A **CrossChainAdapterContract** and a **MockAllo Contract** were deployed across Arbitrum, Polygon, and Optimism.
These mimicked the core donation functionality.
2. Simulation Tools:
Tenderly Forks: Used to replicate the chain environments and ensure consistent testing.
CLI Scripts: Automated API calls for bridges using fixed transaction data to reduce variability.
Data Analysis: Results were logged in Google Sheets for comparison.
Real-World Data:
Test datasets from a grants round were used to simulate actual transaction patterns.
Findings
Solution Comparisons
Recommendations
Short-Term Solution
Connext:
Lowest costs and straightforward integration make it ideal for immediate implementation.
Potential to operate a custom router for additional fee revenue.
Li.Fi:
Excellent for diverse chain support and advanced features like routing preferences.
Recommended for projects prioritizing token flexibility and insurance options.
Long-Term Considerations
Explore xERC20 token standards to streamline cross-chain transactions with minimal slippage.
Monitor Decent’s development for future adoption as its ecosystem matures.
Learnings & Next Steps
API Maturity Matters: Connext’s mature APIs enabled faster integration, while Decent’s gaps caused delays.
Layer 2 Optimization: Gas costs and transaction speeds were more predictable on L2s, emphasizing the need to focus there.
Granular Testing: Future efforts should expand test datasets and refine automation to capture more nuanced cost and performance data.