📃Impact Litepaper
Lite Overview of Impact DEX/Bridge
Introduction
We have been proponents of SVM from the start and believe it is far superior to other VMs like EVM. As a leading chain, Solana has proven itself by demonstrating how low gas fees, parallel execution, and fast transaction finality can be revolutionary.
We think a multi-chain SVM future is upon us. New chains will adopt SVM for L2 and rollups where transaction efficiency and speed matter, such as in gaming, real-time asset transfer, and real-world assets.
As new SVM chains are introduced, they will need ample liquidity and essential dApps that can meet users' needs. We are building Impact with these new chains in mind, which will be the cornerstone of the ecosystem.
Since their inception in 2018, AMMs have grown to become the core infrastructure of DeFi, allowing anyone to trade and market make with a few clicks. However, although TVL and trading volume have shown exponential growth, the underlying technology has seen little improvement.
Issues such as capital inefficiency and high price impact remain unsolved, while creating a market, creating costs that are rarely seen in TradFi for both traders and liquidity providers.
We propose to solve these issues by
Concentrating liquidity
Creating a secure bridge across the SVM chains.
Developing an IDO platform, a bond market, and a staking mechanism. But let's not get ahead of ourselves.
The bridge will provide the functionality to transfer assets across different SVM chains at a fraction of the cost compared to other bridges.
Problems and Solutions:
New ecosystems need ways to obtain liquidity from other chains. For example, SOL from the Solana network could be wrapped and bridged to a new ecosystem, allowing it to be used in DeFi protocols or dApps.
Stablecoins are a very important part of any blockchain ecosystem. However, big and trusted stablecoin issuers are hesitant to issue stablecoins on new chains. Even if a chain is successful, it often takes a lot of time for this to happen. Wrapped versions of well-known stablecoins can be used instead, as they can be easily redeemed from the source chain.
If a project with a token on, say, the Solana chain could be easily bridged and used in the same way as the original token, reflecting its price action, it would benefit the new ecosystem. For example, a meme coin could be bridged to the destination chain, increasing its total value locked (TVL) and growing its community.
Solana and SVM chains need DEXs to enable fast, low-cost, and secure trading without centralized intermediaries. DEXs enhance liquidity and align with the decentralized ethos of blockchain technology.
Concentrated Liquidity
In the constant product model (x ⋅ y = k), liquidity is provided across the price range from 0 to infinity. In contrast, concentrated liquidity adds depth to a market by providing capital in a limited price range, thereby improving capital efficiency.
There are several methods of concentrating liquidity, but we take the simple yet unique approach of applying leverage to the value of k. This is achieved by simply multiplying k by the desired level of concentration, which determines the amount of liquidity provided:
Bridge Architecture
The Solana bridge uses smart contracts to lock assets on chain A and mint equivalent tokens on Chain B. Key components include:
Locking Contracts: Securely receive assets on the source chain.
Oracles: Decentralized oracles verify and relay transaction data between blockchains.
Minting Contracts: Mint new tokens on Solana equivalent to the locked assets.
Each transaction undergoes multi-step validation to ensure accuracy and security. Validators or oracles confirm the locking of assets before minting new tokens on Solana.
Supported Networks
The bridge supports various blockchains, ensuring seamless asset transfer across different ecosystems. This includes:
Solana
Eclipse
Axion
Yona
Bridge Use Cases:
Decentralized Lending and Borrowing: By bridging assets from chain A to chain B, users can utilize their tokens as collateral on DeFi lending platforms, which offer much better opportunities on chain B.
Multi-Chain Investment Strategies: Investors can diversify portfolios by multi-chain investment strategies facilitated by a seamless cross-chain bridge.
Cross-Chain Staking: Bridge is making the cross-chain staking and searching for different yield opportunities on different chains easier.
Trading on DEXs: Bridging assets allows users to access decentralized exchanges (DEXs) on different blockchains, enhancing trading flexibility and options.
Gaming and NFTs: Bridges enable the transfer of in-game assets and NFTs between blockchains, expanding their use and exchange in various gaming ecosystems.
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