In this edition, we’re briefing you on LI.FI.
Liquidity fragmentation has been a long-time problem in DeFi. Blockchain optionality has expanded, with new L1s, L2s, and L3s aiming to increase scalability. However, this innovation spreads liquidity thinner, making bridging and interoperability protocols more valuable than ever.
Learn how LI.FI improves dApp UX in DeFi by providing DEX and bridge aggregation solutions.
Over and out ⬇
News
Sam Bankman-Fried to Testify: The former FTX CEO, Sam Bankman-Fried, is set to testify on Thursday amidst speculations and defense challenges.
SEC's Gensler on Crypto: SEC Chair Gary Gensler reaffirms his stance on the crypto industry, highlighting concerns of "fraud, scams, bankruptcies, and money laundering."
Mike Johnson Becomes House Speaker: Lesser-known Rep. Mike Johnson (R-La.) is elected as the new Speaker, with crypto-focused lawmakers resuming prior roles.
Project Updates
Polygon's $POL on Ethereum Mainnet: Polygon Labs initiates contracts for its upcoming cryptocurrency, $POL, aligning with the forthcoming Polygon 2.0 upgrade.
LayerZero's Omnichain Token: LayerZero introduces a token to bridge Lido’s wstETH across multiple networks, aiming for easier cross-chain portability.
Arbitrum Integrates Celestia: Arbitrum will incorporate Celestia, a modular data availability network, into its software, enhancing Ethereum-based applications and reducing data costs.
Background on LI.FI
LI.FI is a decentralized bridge and exchange aggregator.
Overall, the protocol supports 20+ networks.
Cumulatively, the protocol has accrued $2B+ in volume across ~2.5 million transactions.
The protocol integrates with MetaMask and serves as a swapping and bridging solution for various platforms.
It has facilitated significant asset transfers, making LI.FI is an essential tool for interoperability.
Common blockchains involved in asset transfers on LI.FI includes Polygon, Optimism, Arbitrum, and BNB Smart Chain.
LI.FI CEO Philipp Zentner acknowledges the centralization challenges in layer-2 solutions like Optimism and Arbitrum.
Philipp says that layer-3 solutions are important to improve layer-2 scaling.
The nature of transaction patterns is dynamic, as it is influenced by new layer-2s and layer-3s.
Origin of LI.FI
LI.FI Founder and CEO Philipp Zentner worked for B2B software services before getting into blockchain development.
There is a need for a multichain solution for liquidity, so Philipp and his team decided to build LI.FI (originally called Li.Finance) to aggregate liquidity.
LI.FI's goal is to simplify asset access, transfer, and swapping across blockchains.
LI.FI’s cross-chain newsletter can be a valuable resource for staying updated on interoperability and related developments.
LI.FI Integrations
LI.FI has integrated with 25 chains, 19 bridges, and 28 DEXs.
Metamask Bridges has integrated both LI.FI and Socket to power bridge aggregation among L2s.
LI.FI is used to power it’s own Jumper Exchange, a dedicated DEX for crosschain swaps with gas transfer and fiat onboarding solutions.
Another feature of LI.FI is cross-chain zaps.
By partnering with Wido, LI.FI is able to provide cross-chain zaps for dApps, making them more accessible and improving UX.
As protocols in DeFi become more intertwined and build upon each other, using dApps can become more complex. From using looping strategies to depositing into LP token vaults, there can be a barrier between the intent of project users and actual execution.
Cross-chain Zaps can simplify this process and accommodate for expanding liquidity across different chains.
LI.FI SDK & Widget
LI.FI SDK:
The SDK allows access to the LI.FI API, to find the best cross-chain routes on different bridges and exchanges.
It allows all the bridge and DEX aggregation of LI.FI to be implemented, with a customizable UX.
LI.FI Widget:
The widget is fully customizable.
It provides smart and configurable routing across Bridges, DEXs & DEX Aggregators.
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