Crypto Family DEX Grant

The CFC team is rather new to this space. In contrast, the Liquidity DAO is based off of a multi year open-sourced project (Hummingbot) that is backed by investors and experienced wall-street traders who truly understands the operations of market making nuances, mapping it bridging arbitrage opportunities between DEX + CEX. I understand CFC’s proposition (bridging across multiple chains) doesn’t map directly to Liquidity DAO (arbitraging the same ONEs between markets)

It is true, today we don’t have enough routes between different chains (just try in to route from ONE to ETH), it’s a pain. 1/ Bridging across multiple chain is highly desired, supporting this :100: for sure, 2/ the fees are really high to bridge across multiple chains.
So, yes we need this and @EAOE identified a gap here that needs to be addressed. But the proposal has quite a number of gaps.

The promise of complete bridging between chains in 10 seconds is technically not possible nor secure, when bridging to ETH and BTC, due to the nature of those chains’ security. For example, there’s a 10 min confirmation time on BTC per block, and if the transaction amount is 37.5 BTC (or USD $250K), this is 6x larger than the block reward of 6.25 BTC per block, then the confirmation time should be 6 blocks ~= 1 hour. 10 seconds is just not possible.

I would propose that we hold off on approving this at this time in the current form. There’s still more work to do and funding it in this manner is insufficient to get this going while there are technical due diligence necessary to get this done. Tagging @ganesha here to hear his thoughts.


On the other hand @StakeIt.ONE you might wish to facilitate a discussion between some members of the VDAO to drill down on this to see whether this is going to be practical.

The reason being, eventually, to be able to execute this project, there needs to be a number of independent node operators to run this to bridge between LINK, BTC, ETH, CFC and ONE. The operation doesn’t come for free, and incentivized by the CFC tokenomics. Even if Harmony funds for this, it will not work without independent node operators participating.

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This is a great point @Jacksteroo and I will be sure to do that. One other validator and I have been helping to test their nodes and they require very minimal resources and are extremely easy to configure and run. Extremely efficient, fast, and secure, and I’m quite impressed with Crypto Family and their projects. Thanks for this suggestion and for bringing this to our attention. I’m sure we can get others to run nodes with no problem at all since they are so efficient and easy to run. I know my brother @AffinityShard will. So that’s another node operator right there.

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I believe these concerns of the Crypto Family Bridge security and time are due to a misunderstanding to how the structure of the CF Bridge is, the structure changed a lot since our last call and the bridge evolved from a tunneling protocol to a L2 chain that runs on EVM blockchains and links them, and this allows for almost instant and very cheap multichain transactions as if they are inside the same blockchain, and with the security of both the blockchain being transferred from and to and 50 nodes operating the bridge.

Maybe a call would be good to explain the latest changes and get you up to date with the latest changes around the CF Bridge.

Right, our last call was a while ago. If it’s not a L1 chain bridging, and in fact an L2 chain wrapper, I’m wondering how different CFC’s “bridge” is from existing DEXes like DefiKingdoms, Sushi, Viper, etc.? Essentially is it a DEX and not a Bridge per se?


No it’s purpose is still focused on providing decentralized, permissionless, fast, and cheap transactions for any tokens across supported EVM blockchains, projects can add their own tokens without even paying any fees, and are free to use the bridge for those tokens in a fully decentralized and permissionless fashion.

What I mean by L2 Bridge, is that the CF-Bridge has became similar in architecture to L2 blockchains such as Polygon, the Bridge has in fact become a blockchain that creates blocks and verifies them off-chain, but the finalization (final security checks and processing of token transfers) is done on-chain. This new structure has allowed us to make transactions much cheaper as they are grouped in blocks and submitted together, as well as made them faster as transactions finality time is now composed from off-chain verification by nodes (~1 sec) and on-chain processing of the block (~2 sec).

This allows for upmost security and performance, and the Harmony validators who helped us/are still helping us test saw how simple and lite it is to run a CF-Bridge node, and how multiple blocks were rejected by the Beacon contract of the Bridge when there were issues properly verifying blocks between nodes before submitting them, the bridge is as secure as a blockchain due to the security provided to it by it’s own nodes + the security checks made by the Beacon contract to verify that 80% of the staked power approved a certain block and that there was no double signing and no attempts of double processing transactions.

I know the bridge chain took a lot of time in development (1 year now), but it was worth it, we were always giving it our all, and it payed off, we were capable of increasing TPS to 500, decreased finality time to 1 sec + 1 blockchain block (total = ~3 sec), increased nodes capacity per Beacon from 21 to 50, decreased transaction processing cost, increased flexibility of adding tokens and development, improved performance of nodes till they became so lite you can run them on a phone and still process hundreds of transactions per second.

I know you’re a busy man, but I would love it if you can join us someday on testing and experience for yourself the work we have accomplished.


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