Let’s Talk Cross-Chain: Multichain

Let’s Talk Cross-Chain is a series hosted by LI.FI where we interview founders and teams building key infrastructure for the multi-chain future.For this interview, we’re joined by the Multichain team. Multichain is a cross-chain router protocol with the goal to become the ultimate router for Web3.0. It is an infrastructure developed for on-chain asset interoperability through arbitrary cross-chain interactions.

Let’s dive in!

Interview

Welcome to the LI.FI’s Let’s Talk Cross-Chain Interview Series. First, please introduce the origins and development history of Multichain.

Multichain was born as Anyswap in 2020 July. At that time, Uniswap proved that AMM-based DEX was the way to go, as they gathered hundreds of millions in liquidity. However, most of the TVL across the chains was focused on Ethereum, which was already not the cheapest and the most efficient chain. Therefore, we decided to create a cross-chain DEX that could deploy on different chains and support any asset from any chain.

We had mediocre success as a DEX, but we saw potential in the bridging aspect, so we decided it was best to focus on it. That’s what we did in early 2021 when Anyswap removed the DEX function and focused on cross-chain bridge services. In order to provide users with better cross-chain services, Anyswap rebranded to Multichain at the end of last year.

Multichain now focuses on the Bridge and Router with Co-Mint feature to service the clear needs of different and diverse blockchains to communicate with each other. We provide a fast, secure, inexpensive, and reliable way to exchange value, data and exercise control between the chains. Recently, we launched our V4 product, anyCall, which enables sending cross-chain messages and call contracts from chain A to chain B with just one transaction. We are co-working with DeFi leading players on cross-chain Dapps and some of them have already implemented anyCall. The first anyCall use case is the Cross-chain Gauges that we’ve developed with Curve together.

Since your launch, what’s the growth been like? Can you talk more about the time since launch and how did it look inside Multichain? Would love to hear about your experience with raising funds as well.

We’ve talked a lot about our development history and product portfolio, let’s focus on our team. We are still a small team of roughly 30/40 people that come from all around the world but growing in size fast. We, like other blockchain teams, are a global organization.

Last December, Multichain raised a $60M financing round led by Binance Labs. Multichain primarily uses the funds to invest in the growth of the team and ecosystem to further the mission of routing the Web3. This includes expanding the R&D team, especially the research team on crypto algorithms, the audit team which focuses on security, and the service team that supports more users and more blockchain ecosystems to connect with Multichain.

The growth of a platform is dependent on community interaction. How does Multichain interact with its user base?

We agree with your opinion that the growth of a platform is dependent on community interaction. Like other platforms, Multichain is fully driven by its community and the DAO community is always welcome to participate in the organization of Multichain and its development. As seen by Telegram polls in our Multichain DAO, the veMULTI proposal was discussed and presented by many community members. To foster the long-term growth of multiDAO, we have announced the first veMULTI proposal and will launch veMULTI in Q2 2022, where proposal, voting, administration, and other functions will be operated in a decentralized manner.

Of course, users’ feedback is constantly valued by the Multichain team. We have a supporting team of 5–6 people that work 24 hours a day, seven days a week to service users. Our community managers are always available to reply to user queries and assist them in resolving their problems.

How important is decentralization to you? What measures do you take to ensure decentralization?

Multichain aims at providing a genuinely decentralized cross-chain infrastructure for Web3. Decentralization is made possible by non-custodial smart contracts and the secure Multi-party Computation (MPC) technology, which combined ensures the secure cross-chain transaction without any single point of failure across all links. For more information, navigate to Multichain security model mechanism.

Multichain’s MPC Network draws theoretical support from the GG20 thesis, which has gained international recognition for its theoretical and practical reliability and is technologically trustworthy. Multichain has undergone rounds of code audits done by multiple companies, launched a worldwide Bug Bounty program, and set up the Security Fund in the interest of users. From the official launch in July 2020 onward, Multichain records an accumulated trade volume of 75 billion dollars, accumulated transaction counts of 3.2 million, accumulated user number of 610,000, and an average of over $25K per transaction. These statistics are proof of the extensive use of Multichain and users’ increasing trust.

Multichain will roll out the new generation of fastMPC Network recently, which carries Multichain’s vision of further decentralization in MPC Network and thus further enhancing the network security.

How is Multichain able to offer low transaction fees to its users? What role does the capital efficiency of the network plays, if any, in determining the costs?

All users can benefit from low-cost cross-chain solutions provided by Multichain. For example, there is no cross-chain fee for users to transfer stable coins like DAI, USDT, USDC, WBT, etc. to Ethereum-compatible networks. In terms of transferring back to Ethereum, it costs around $40 for each transaction. One of the important reasons is that we want to give our users the best experience possible.

Also, compared with other cross-chain solutions, such as those based on optimistic validator or multi-signature scheme, Multichain’s underpinning technology is MPC. MPC technology can significantly increase the efficiency of data transfers and decrease the times of interactions between blockchains. There exists a decentralized MPC network, validating and computing the bulk of data, which has a substantial impact on capital efficiency.

Why did you choose the MPC model for Multichain?

Today, multi-signature and MPC are two of the most used technologies for securing private keys, however, MPC is more suited to today’s challenges. MPC, as opposed to multi-signature, is protocol-agnostic and provides operational flexibility.

Multichain is secured by a network of nodes known as the Secure Multi-Party Computation (SMPC), which is the key of Multichain security model and mechanism. These nodes are independent entities that can collectively sign transactions. Using a Distributed Key Generation algorithm, each node independently owns part of the private key. The complete set of private keys will never appear, let alone the possibility of being revealed. This avoids single points of failure, ensuring decentralization and security. Recently, We’ve released MPC 2.0 — fastMPC, which has improved security and performance. Its testnet is now open to our community and partners.

There are many bridges in the ecosystem. How do you see the competition playing out?

First of all, the competition can indefinitely prompt our improvement in features, functions, UX, and other deterministic aspects. And we believe the friendly rivalry is beneficial to the long-term development of the whole cross-chain field, as we share the same vision for a multi-chain future.

The proliferation of multiple bridges in the ecosystem will make genuine decentralization more possible since users are provided with more cross-chain bridging options, and thus will enhance the security level in the cross-chain field. But meanwhile, as we mentioned above, such competition also brings confusion to users and more importantly, the liquidity fragmentation issue which may cause inconvenience and even impermanent loss in some cases to users. Therefore, we believe the cooperation or communication among cross-chain bridges is also very essential to the development of the whole field. That’s why we launched Co-mint, which enables multiple bridges to co-mint the same assets. We’ve already had Conflux Network, Rei Network, and Orbit Chain joining in.

In a word, we are working on striking a balance between competition and cooperation among bridges existing in the ecosystem, since we always put superior UX and security as our priority.

What are your views on bridge aggregators such as LI.FI?

We adhere to the same belief that the future is multi-chain and cross-chain bridging solutions will play a major role in the future. The thriving multi-chain ecosystem is attracting more bridges to the market, which are all equipped with unique features. The diversity of cross-chain bridging solutions brings both surprise and confusion to users and project developers. The emergence of bridge aggregators assists users and developers to find out the optimal route and the cross-chain bridging provider in terms of speed, cost, security, etc. according to their own cross-chain needs.

As a trend leader among bridge aggregators, LI.FI is dedicated to providing seamless cross-chain any-to-any swaps service. We believe LI.FI is in a good position to push the adoption of cross-chain bridging solutions up another notch and we can promote mutual growth through collaboration. And with new co-mint features and anyCall functions added to Multichain, we hope the two of us will seize more cooperative opportunities to bring the multi chain a step forward.

What are the biggest challenges you’re facing currently?

There is no IT system completely immune to risks at the technical level, such as vulnerabilities, hacking, system failure, etc. Regarding this, Multichain has conducted a comprehensive review and has prepared for them. Firstly, we have set up a Security Fund to collect vulnerabilities that may exist in Multichain’s own systems and to pay out for the losses incurred by users due to the problems with systems. We have also established a Bug Bounty to reward those who submit bugs and find out solutions.

Secondly, we have further expanded the scope of cooperation in the field of security and established long-term business rational relationships with a number of security companies in the blockchain field. For every system upgrade and product launch, we will ask each security company we cooperate with to conduct code audits separately. Finally, the technical team has been significantly expanded. The tech team will focus on cryptographic theory and technology, network and information system security, and other areas to ensure Multichain systems are constantly running at a high level.

Although Multichain has become a leading player in the cross-chain sector, there is concern that the blockchain business is changing swiftly and that every company will be pushed out by the market. As a result, the most essential strategy to secure future success is to provide superior service to our business partners, users, and community. To that aim, multichain has expanded its technical and operation teams, making it a top priority. In addition, Multichain would expand its business scope including the partnership with newborn businesses including GameFi, SocialFi, and web3.

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Disclaimer: This article is only meant for informational purposes. The projects mentioned in the article are our partners, but we encourage you to do your due diligence before using or buying tokens of any protocol mentioned. This is not financial advice.