Cross-Chain via Connext

What is Connext?

Connext is a modular protocol for securely passing funds and data between chains. Zero-G Finance has worked closely with Connext in order to integrate native cross-chain restaking to various layer 2 networks that include the following but are not limited to:

  • Base: Base is a Layer 2 blockchain developed by Coinbase and built on the Optimism technology, designed to extend Ethereum's capabilities by offering a scalable, secure, and developer-friendly platform. It operates with lower transaction fees and faster speeds than the Ethereum mainnet, aiming to foster a more accessible and efficient environment for building decentralized applications (dApps). Leveraging Optimistic Rollups, Base maintains high security and decentralization standards while promoting a seamless user experience for both developers and users, supporting the broader Ethereum ecosystem's growth and innovation.

  • Optimism: Optimism is a Layer 2 scaling solution for Ethereum, enhancing transaction speed and reducing costs through Optimistic Rollups. These rollups process transactions off the main Ethereum blockchain while retaining its security, by assuming transactions are valid unless proven otherwise. This approach minimizes on-chain data and utilizes fraud proofs to verify transactions only if they're challenged, ensuring integrity without the need for complex computations for each transaction. This method streamlines the validation process, offering a balance between efficiency and security for Ethereum's network.

  • Arbitrum: Arbitrum is a Layer 2 scaling solution designed to expand Ethereum's capacity by enabling faster and more cost-effective transactions without compromising on security. It employs a unique take on Optimistic Rollup technology, processing transactions off the Ethereum mainnet to alleviate congestion and reduce gas fees. Transactions on Arbitrum are executed and recorded off-chain, with only a summary posted to the mainnet, ensuring compatibility and security rooted in Ethereum's robust ecosystem. This approach allows Arbitrum to significantly increase transaction throughput, making it an attractive platform for developers looking to build scalable decentralized applications (dApps) and for users seeking quicker, cheaper interactions on the Ethereum blockchain.

Holders of Ethereum (wETH) now have the opportunity to restake their assets on premier layer 2 networks allied with Zero-G, streamlining liquidity and access while alleviating the intricacies often found in conventional restaking approaches. Looking ahead, Zero-G's collaboration with Connext will extend this restaking capability to LSTs on layer 2 networks. Through a strategic partnership with Connext and leveraging Chainlink's Cross-Chain Interoperability Protocol (CCIP), Zero-G delivers an authentic cross-chain restaking experience, ensuring user interactions are fluid and intuitive.

The process unfolds as follows:

  • Initiation: Users kickstart the procedure by transferring wETH to the xZeroGDeposit smart contract on the L2 Arbitrum network.

  • Token Minting: In return for the wETH or LST deposits, the xZeroGDeposit smart contract issues zgETH tokens.

  • Token Distribution: These newly minted zgETH tokens are then allocated to the user.

  • Bridge Activation: The xZeroGDeposit contract intermittently activates a bridge transaction via Connext, channeling all wETH deposits to the xZeroGBridge contract on the Ethereum mainnet.

  • Bridge Processing: Upon receipt, the xZeroGBridge contract’s bridgeDeposit() function converts the wETH back to ETH and channels it into the RestakeManager.

  • Token Wrapping and Minting: Subsequently, the RestakeManager forwards the minted zgETH tokens to the Lockbox contract for wrapping, which then issues zgETH tokens on the layer 2 network in return for zgETH on layer 1.

  • Token Burning: The xZeroGBridge contract annihilates the received zgETH tokens.

  • Price Updates via CCIP: The xZeroGBridge contract, at intervals, updates the zgETH to ETH pricing via Chainlink's CCIP, ensuring the zgETH token valuation remains current.

Depositors may experience slippage, which is determined by the amount of ETH or wETH directed into the bridge deposit contract. Nonetheless, the savings on gas fees could balance out the costs associated with slippage, depending on the amount of the deposit.

Advantages of Native Restaking:

  • Enhanced User Experience: By eliminating the need to navigate the complexities of bridge transactions and associated fees, native restaking offers a more straightforward and appealing staking process.

  • Reduced Costs: Direct restaking from layer 2 networks or EVM-compatible layer 1 chains significantly cuts down transaction expenses, thereby making participation more accessible and appealing.

Last updated