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Glimpse: On-Demand, Cross-Chain Communication for Efficient DeFi Applications on Bitcoin-based Blockchains
Authors: Giulia Scaffino, Lukas Aumayr, Zeta Avarikioti, Matteo MaffeiAbstract:
Cross-chain communication is instrumental in unleashing the full potential of blockchain technologies, as it allows users and developers to exploit the unique design features and the profit opportunities of different existing blockchains. Solutions based on trusted third parties (TTPs) suffer from security and scalability drawbacks; hence, increasing attention has recently been given to decentralized solutions. Lock contracts (e.g., HTLCs and adaptor signatures) and chain relays emerged as the two most prominent attempts to achieve cross-chain communication without TTPs. Lock contracts enable efficient synchronization of single transactions over different chains but are limited in expressiveness as they only support the development of a restricted class of applications (e.g., atomic swaps). On the other hand, chain relays enable the development of arbitrary cross-chain applications but are extremely expensive to operate in practice because they need to synchronize every on-chain transaction, besides assuming a quasi Turing-complete scripting language, which makes them incompatible with Bitcoin-based and scriptless blockchains.
We introduce Glimpse, a novel on-demand cross-chain synchronization primitive, which is both efficient in terms of on-chain costs and computational overhead, and expressive in terms of applications it supports. The key idea of Glimpse is to synchronize transactions on-demand, i.e., only those relevant to realize the cross-chain application of interest. We present a concrete instantiation which is compatible with blockchains featuring a limited scripting language (e.g., Bitcoin-based chains like Liquid), and, yet, can be used as a building block for the design of DeFi applications such as lending, pegs, wrapping/unwrapping of tokens, Proof-of-Burn, and verification of multiple oracle attestations. We formally define and prove Glimpse security in the Universal Composability (UC) framework and conduct an economical security analysis to identify the secure parameter space in the rational setting. Finally, we evaluate the cost of Glimpse for Bitcoin-like chains, showing that verifying a simple transaction has at most 700 bytes of on-chain overhead, resulting in a one-time fee of 3$, only twice as much as a basic Bitcoin transaction.
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