Chain Abstraction Market Map and Ecosystem Overview

Chain Abstraction is the next logical evolution of the modular ecosystem.

While modular systems allowed us to independently optimize and scale specific components of the blockchain stack, this also created a fragmented experience for users of many new blockchains.

It's easier than ever to launch a new rollup or appchain with the rise of rollup frameworks and rollup-as-a-service providers. This has thoroughly reduced the average transaction costs on Ethereum L1, but the user experience on L2s feels much less unified than transacting on Solana or on Ethereum in 2020.

The lowered barrier to entry of launching new chains has resulted in more experimentation and an expansion of rollups, as seen below.

We believe that chain abstraction on the user facing level, powered by teams focusing in a collaborative effort at different parts of the stack, has the potential to be a massive breakthrough in the onchain experience. When coupled with highly performant, intents-based bridges, transport layers, and sequencing networks—the endgame of making Ethereum composable again feels achievable.

The combination of an abstracted wallet experience for all users, with lightning-fast interoperability behind the scenes, will provide the ecosystem with a Web2-like experience of browsing through websites (onchain apps) with little friction.

However, the chain abstraction narrative is muddled, and there’s still a significant gap in understanding. As early adopters in this space, we have a unique opportunity to shape its trajectory. To fully realize this potential, we must make the core ideas accessible to everyone. By simplifying the complexities and demonstrating practical applications, we can inspire broader adoption and drive the industry forward.

What, why, how, and when? 

At its core, chain abstraction aims to simplify the backend complexities of blockchain applications, particularly in the areas of cross-chain interactions and gas abstractions. A shared end goal of many in the community is to create apps that users might not even realize are crypto-related. However, many of the current users still care about knowing which blockchain they’re on, associating specific chains with unique communities and experiences. 

This brings up a key question: Is full abstraction what users really want? 

Instead of presenting chain abstraction as an all-or-nothing solution, we should frame it as a spectrum, giving users choice and flexibility. This provides a messaging which is aligned with optionality, a core ethos of modularity and crypto as a whole.

To make the chain abstraction idea resonate, we believe a shift from talking about potential use-cases to demonstrating tangible benefits with real use-cases should be the focus of our ecosystem. We believe the best way to do this is to simply focus on the first two core user pain points today: The fragmentation problem in multi-chain environments, rollup clusters, and bridging, as well as simplifying transaction signing and gas fees. 

Rather than overwhelming users with a full suite of abstractions and further blurring the definition of chain abstraction, the community could consider introducing newer ideas and solutions incrementally. The reasoning here is to build towards a more comprehensive chain abstraction stack over time. This approach ties into the idea of providing users with checkpoints or a roadmap for chain abstraction. By showing where we are now and where we’re headed, we can make the future of chain abstraction feel more tangible and less abstract, no pun intended.

We feel it’s  also crucial to manage expectations. We have heard promises about "solving UX" since the day Aave yield farming opened up across Avalanche and Polygon in 2020—yet the experience hasn’t fully materialized. Many people in the community have lost money on a bridge hack, sent funds to the wrong chain, forgot about gas money on a destination chain, or completely forgot about tokens on a chain where the RPC connection in their MetaMask wallet didn’t work properly.

In order to meme Chain Abstraction into existence, we need to focus on clear education, practical demonstrations across applications, and building solutions which require low friction for users to adopt. This isn’t about overwhelming users with everything chain abstraction can do; it’s about solving the problems they face right now while gradually introducing them to the broader potential of the category.

Our goal with The Chain Abstraction Market Map was to have a comprehensive view of the technology, tools, and standards solving fragmentation. This post will break down each category of the map, explaining our reasoning, and key projects building towards a chain abstracted future.

When we were putting this together, we realized several projects are able to fit into two, if not three of these categories. We knew there was going to be debate and discourse. As always, we welcome this and encourage pushback and constructive criticism.

1. Permissions & Orchestrations

Account Abstraction: Safe, Avocado Wallet, Turnkey, Kontos:

Account abstraction (AA) represents a fundamental shift in how users manage their blockchain interactions, simplifying account management and transaction signing. Traditional blockchain accounts often require users to handle private keys directly, posing a risk if these keys are lost or compromised. 

AA platforms address this by offering more user-friendly account management solutions. These platforms leverage smart contract wallets or ‘smart accounts’, where private keys are abstracted away, providing a seamless and more secure experience for users. By focusing on security and ease of use, these tools are pivotal in onboarding the next wave of blockchain users who won’t need to learn how to manage private keys.

Commerce Automation: Halliday, Fun.xyz, Decent:

Commerce automation platforms are designed to streamline and automate the various processes involved in blockchain-based commerce. These platforms enable businesses to automate payments, settlements, and other commercial transactions, reducing the need for users to go through multi-step checkout processes. This not only speeds up transactions but also reduces the potential for human error. By integrating with crypto and fiat providers, these platforms enable faster checkouts on apps and smoother purchasing UX so that commerce can flow smoothly across any chains. 

Wallet Abstraction: OneBalance, NEAR Protocol, Mycel, Particle Network, Socket Protocol, Orb Labs, Light, Intentify, XION, Arcana Network, Okto:

Wallet abstraction platforms, sometimes referred to as account-level chain abstraction, focus on simplifying the user experience by abstracting away the complexities of managing multiple balances and wallets across different blockchains. These platforms provide a simplified wallet UX with token balances aggregated in one place. Users can have a unified experience without needing to manually bridge and swap tokens to manage assets between different chains. 

Orchestration: NEAR Protocol, Orb Labs, Light, Intentify, Okto, Klaster, Aarc, Shogun, Agoric, Infinex, Li.Fi:

Orchestration services, or application-level chain abstraction protocols, coordinate activities across multiple blockchains, ensuring that multi-chain operations are executed efficiently. These projects provide tools for automating and managing various underlying execution platforms and blockchain infrastructure like RPCs. For instance, an orchestration platform might coordinate transactions that involve multiple steps across different blockchains, such as swapping tokens on one chain, bridging them to another, and then staking them in a DeFi protocol. By automating these processes, orchestration creates a single-click experience for users, reduces the risk of user error, and ensures that operations are executed in the most efficient sequence.

2. Orderflow Sources & Auctions

Catalyst, Socket Protocol, Uniswap, Aori, Across, Router Protocol, Synapse, Orbiter, Arrakis, Shogun, DLN, Li Fi, Sprinter, Squid, Anoma, Relay Protocol, CoWSwap, Essential, Espresso, Decent, Jumper:

Orderflow sources are where user intents originate, and an essential component of the DeFi ecosystem. Auctions facilitate the execution of orderflow so trades execute at efficient prices. Platforms specialize in managing order flows and conducting auctions. For example, UniswapX routes trades through multiple off-chain and onchain liquidity sources to ensure the best execution for users. 

Cross-chain liquidity is a vital aspect of the multi-chain ecosystem, and these platforms help enable seamless asset transfers across different blockchains. These platforms often operate as liquidity routers, connecting various DEXs and liquidity pools across multiple networks. By facilitating cross-chain liquidity, they ensure that users can trade assets and move funds between blockchains without facing liquidity constraints or significant slippage.

3. Solver Networks

Enso, Khalani, Aori, Valantis:

Solver networks are specialized platforms that focus on solving complex computational challenges within the blockchain ecosystem by leveraging third-party agents, known as solvers. Solvers fulfill user intents and perform tasks such as transaction validation, price discovery, and other decentralized operations that require significant computational resources. These platforms optimize the performance and efficiency of blockchain networks by distributing these tasks across a network of solvers.

4. Solvers

Wintermute, Amber, Propeller Swap, Anera Labs:

Solvers are offchain actors who specialize in optimizing various blockchain functions, such as transaction batching, arbitrage, cross-chain liquidity provision, and fulfilling user intents. In cross-chain usecases, solvers fill a user’s intent on the destination chain quickly, but incur finality risk from the canonical bridge. For example, Wintermute is a well-known market maker in the DeFi space, providing liquidity and ensuring smooth trading experiences on decentralized exchanges. These solvers are a critical component of the intents paradigm that’s shaping much of the chain abstraction discussions in the ecosystem.

5. Clearing

Everclear:

Clearing platforms are responsible for ensuring that transactions are settled correctly and efficiently across different blockchains. A decentralized clearing service ensures all parties involved in a transaction meet their obligations and efficiently rebalance asset inventory. 

6. Standards

ERC-7281, ERC-7683, ERC-4337, EIP-3074, EIP-3370, EIP-7579:

Standards are the backbone of the blockchain industry, ensuring that different platforms and protocols can coordinate and interoperate. Each of the standards mentioned plays a unique role in coordinating these chain abstraction systems:

• ERC-7281: This standard enables token issuers to bridge tokens across multiple blockchains while retaining control over the bridging process. It allows bridges to set rate limits on mint and burn bridge actions. The main goal is to avoid concentration of funds and ensure open competition among different bridging solutions.

• ERC-7683: Standardizes an interface for solvers and settlement of cross-chain intents. It proposes the ‘CrossChainOrder’ struct and the ‘ISettlementContract’ interface to streamline how cross-chain orders are handled and settled. This standard aims to connect different blockchains by creating a universal filler network.

• ERC-4337: Introduces account abstraction, enabling more flexible and easier interactions with dApps. Users can pay transaction fees with tokens other than ETH and utilize enhanced smart contract wallet functionalities. Despite support for account abstraction standards, there is more research being done about upgrading existing EOA wallets to smart contract accounts.

• EIP-3074: This proposal aims to abstract gas from the user experience by allowing for sponsored transactions. This means that users can have their transactions sponsored by another account, making it easier to pay transaction fees and interact with applications.

• EIP-3370: This standard proposes adding a prefix to signal chain-specific addresses. For example, arb:0xAbc123.. would represent an address on Arbitrum One. This would help eliminate confusion and user error of sending tokens to an incorrect network.

• EIP-7579: This standard proposes upgrades to the current account abstraction implementation to enable a cross-chain user experience via modules. The proposal outlines the minimally required interfaces and behavior for modular smart accounts and modules. 

These standards are critical in ensuring that the blockchain ecosystem can grow and evolve in a cohesive manner. Several more standards are in the research and implementation phase to improve the experience of accounts, wallets, and cross-chain transactions for complete chain abstraction.

7. Settlement & Infra

Transport Layers: Layer Zero, Axelar, Union, Wormhole, SEDA, Polymer Labs, IBC Protocol, Omni, Hyperlane:

Transport layers are responsible for facilitating the transfer of data and assets across different blockchains. These projects provide the infrastructure that enables blockchains to communicate. Latency in these protocols scales with security, meaning cross-chain messages are more secure but slower to transport. Users use the transport layer less frequently than the quicker, intents-based counterpart.

For example, LayerZero is known for its general messaging protocol that allows dApps to interact with multiple blockchains. These transport layers are essential for creating a truly interconnected blockchain ecosystem, where users can move assets and data across networks.

Fast Finality: Nuffle, Aligned, ZKV Protocol, Hyle:

Fast finality solutions focus on speeding up the settlement of transactions, making blockchain networks more efficient and user-friendly. Platforms offer technologies that reduce the time it takes for a transaction to be considered final and irreversible. This is particularly important in high-frequency trading or real-time applications where delays can lead to significant losses. Fast finality solutions improve UX and application efficiency so that blockchain networks can compete with traditional financial systems in terms of speed and reliability.

Rollup Clusters: Optimism Superchain, Arbitrum Orbit, ZKsync Elastic Chain, Caldera Metalayer, Initia, Dymension, Polygon AggLayer, Astria, Espresso, Nodekit, Radius:

Rollup clusters are groups of rollups that share liquidity and infrastructure for network effects. By working together, these rollups can handle a larger volume of transactions, making the cluster more scalable and capable of supporting a broader range of applications. There is ongoing research to make interoperability within clusters and among external clusters more efficient through a combination of transport protocols and an intent-centric cross-chain approach.

The future of blockchain will likely see even more integration and abstraction as these technologies continue to break down barriers between different networks, and more projects form to improve the onchain experience.

If modularity was the great unbundling, chain abstraction is the great re-bundling.

To listen to leaders of Chain Abstraction discuss the map and implications for the future of this space, check out the full recording of our Chain Abstraction ecosystem discussion here