Solving Ethereum's Multi Chain Fragmentation With a Single API

Transcript

[applause] >> Hey, hey. Thank you all for coming. We made it. Finance is coming on chain. I mean, we worked 10 years on getting here, right? Like 10 years at least of continuous efforts developing smart contract technologies, distributed ledgers, and now finance is coming. If you look at RWAs, it's already around 31 billion on chain. If you take into account stablecoins, we're looking at 400 billion dollars.

That is amazing. That is so much progress for this industry, and [snorts] we have worked so hard to come here. But, the big problem is that all of this is happening on so many chains. All of that money, all of that value is ending up in protocols across dozens of chains. And now it gets even more complex because these big banks BlackRock Franklin [snorts] Templeton, all of them are bringing their own permission systems. So, now the this fragmentation becomes even more complex on so many different levels.

But, no worries. We're going to figure it out. I think it's very important that we are just grateful that these things are happening. And I know that the DeFi space at the moment, oh, it's it's it's rough out there, right? There's this weird gap between DeFi and TradFi coming here, but it's not really here yet and it's trying to figure things out. But really uh we have all the means and we have all the intelligence to figure these things out. If you look at stablecoin fragmentation, 95% of that is happening um like all these movements are happening um on Ethereum L2s. And then 30% of that on base.

That's insane. It's the same dollar though. And if you look at stablecoin fragmentation, we're looking at hundreds of different stablecoins, and it's going to be even worse once other countries are jumping on this. Once other countries are finding their own regulatory frameworks, probably similar to genius act and Mika regulations to issue stablecoins and allow local financial systems to build on top of it. So, potentially we're looking at thousands of stablecoins across the globe. And this fragmentation comes at a cost.

It comes at a cost for builders in the first place. Builders, they choose a chain to deploy their smart contracts on, sometimes multiple ones, but really like in a go-to-market phase, you just want to pick one ecosystem, and that already is a huge bet, right? Picking the ecosystem because liquidity in DeFi at least has been mercenary. That capital rotation we have been seeing over the past 5 years, today it's abstract, tomorrow it's mega ease, the next day it's stables, next day it's plasma. There are so many chains that are hyped, and liquidity rotates, and the projects that deployed on the last hyped chains are left with just small bags essentially.

And this is not how it's supposed to be. So, builders then spend time improving their user onboarding so that it doesn't really matter where the user is coming from, where they hold their funds. They want to make it simple to use their dapp, um no matter where liquidity is uh sitting. And um that again takes time from building the actual product. User onboarding should be simple. Then the user pays it. The user pays it with time and money and dust. Um so, the user has to figure out which systems are there, how to bridge how to um >> [snorts] >> how to assess the risks when using

certain things. And I mean, whales I many whales I spoke to in the past few years they were like, "I'm not leaving Ethereum L1. I don't trust any bridge, not even the native one." Right? So, there's so much liquidity stuck in certain silos and it's not moving because that fragmentation spikes anxiety. And the user pays with so much time to research things. Luckily, there are like platforms like jumper.exchange where you can essentially swap and bridge in and out of any ecosystem, but still it's hard for users and often they end up with dust, which is like small little trails of money because they needed some random gas token for some random chain. And this is not

This is not great. And users are left with just one verdict, which is "Crypto is not ready yet." And now, institutions. Institutions are not going to deploy billions across 40 islands. They're going to pick their ecosystem and commit to it. Most likely they're going to have their own one because they want to retain the customer relationships they have built over the past 30, 40 years, right? So, there's a strong economic incentive to have not only your own stablecoin, but have your own chain.

And of course, this is reasonable in so many ways. Um but we need to solve the fragmentation from a user perspective. If you're using the internet, you just type in an address. You don't care about which DNS system, which ISP, which uh which infrastructure data center is in the in in between. You don't care. You just want something out of the internet. You are outcome oriented. And this is really all that it's about.

We need to understand that it's not about one chain winning. It will not be one chain for physical reasons alone. Um and also it's not about um one chain winning because uh there's a strong economic incentive. So, it is going to be multi-chain. Um and here is really where we are switching the paradigm from user has to pick a certain solution and has to own a certain token in order to get from A to B. We make it outcome oriented. We make it intent-based where we really simply say I want X and this is the capital I have and then it happens. This is not only important for users, by the way, also

for the next wave of users, which are AI agents right? They going to get user journeys typed uh because we're talking LLMs and so we need a way to communicate on chain or with a chain um by using natural language. And this is exactly what we've been building with Li.Finance. Li.Finance spent 5 years aggregating everything that's responsible for accessing assets and moving them, um swapping them um the best bridge to find the best route, the best DEX to get the best price. Um all of that has been made available and

we have over 1,200 applications using us across any type of use case. There are wallets, there are liquid funds to rebalance their portfolio, there are payment solutions, neo banks. For all of these types of applications, we have abstracted away that system, um these complex systems that are out there and now we essentially not only um provide not only provide access to all these different trading venues and bridges, we also open up that space, open up that supply side of trading venues to market makers and solving system and other trading venues to plug themselves in, provide their liquidity, provide their capabilities, and our system is so modular that we are able to not only

serve DeFi like we have been in the past 5 years, but we are actually able to serve TradFi because the whole system is modular, and if you need something more compliant, if you need custom liquidity, if you have certain service level agreements, um outcome guarantees, best price execution, uh whatever it is, we can help you out and plug these individual modules in the system and provide exact exactly that auto flow execution you need for your use case, and that is what is so special. And that's not where we stop. I think having access to all the trading venues, all of that is is great, but what we really need is, again, to what I

said before, right? We need to be able to talk to the chain. Need to make it very, very simple, and we shouldn't write custom smart contract code just to get our users from A to B, just to use LiFi. Um we want to have something more simple, and this is why we have developed composer. Composer is an absolute innovation in this space. It is a virtual machine that runs on chain. It expresses a domain specific language in TypeScript, so you can type end-to-end user journeys just in TypeScript, and it's getting compiled into bytecode on chain and atomically executed.

So, this is really a game changer because now we really don't have to care about chains anymore, or infrastructure, or gas tokens, or wrapping, unwrapping, whatever it is. All of this is abstracted away to a point where we can literally type user flows and just get it atomically executed. And this is really the game changer here, and this allows to essentially, if you are a vault provider, um let users take any asset they have they have on any chain and simply we swap, bridge swap, and deposit it right into the vault. Um if you are a payment solution provider, if you are a card provider, if

you're Visa, if you're MasterCard, and you need uh pre-funding, you can allow the users to take any asset they have on any chain and pre-fund the card in one transaction. So, users journey user journeys become seamless, and this is really the next step of what this industry needs in order to find larger adoption. And we do all of that on infrastructure that actually scales. We have processed over $80 billion over the past 4-5 years, uh over 90 million transactions. Um we have been growing 7x last year. Uh and over 1,200 partners used us just in May this year. So, it's not the 1,200 applications that ever signed up.

There would have been couple of thousands, but many in the industry died over the past few years. 1,200 partners transacted with Li.Finance multiple times last month alone. And most likely all of you have already used us. Amongst these 1,200 applications, there is MetaMask, there's Phantom, there's Rabby, there's Binance, Kraken, Coinbase, there's Circle, there's Hyperliquid, there's Pendle, there's Brave browser, Fireblocks, you name it. All of these big applications, somewhere in their stack, are already using us.

And now I want to go back to that fragmentation problem for a second again. If we see how many billions in value come on chain, and on how many chains that is happening, that should make you realize how big that tax our industry is paying really is. This fragmentation tax is growing exponentially. So, my only ask here is instead of trying to reinvent the wheel, use the marketplace we have built over the past years. No matter if what you're supplying, come to us. We have the distribution power already. If you are somehow dealing with issuing, come to

us. We have the distribution and we can make all your assets available day one in over 1,000 applications. Um and if you're building an application, come to us. Don't reinvent the wheel. If we keep on reinventing the wheels, you're getting busy with not only implementation and research, you're getting busy with maintenance. Homogenizing the data, making sense. It's not only about implementing APIs, it's about thousands of edge cases. It's about billions of open telemetry data points we have collected over the past 5 years to optimize the routing globally. And you don't want to reinvent that.

Um focus on building kick-ass applications. Focus on your users. Focus on your market share. Um and build on Li.Finance. At the end of the day, we all want this space to grow. So, it's important to focus what matters. And that's us building applications that shows the world that DeFi has a raison d'être. It it makes the life better. It makes finance more accessible. And yeah, let's stop paying the tax. Um find us on Li.Finance, find us on @lifiprotocol on Twitter.

And thank [snorts] you so much for staying here, listening to me. And uh see you next time. >> [applause]