Rollups are protocols designed to solve the expensive and time-consuming nature of the Ethereum network. They process transactions on a faster blockchain called Layer 2 and then transfer the data back to the Ethereum mainnet at a lower price. However, transferring assets from one rollup to another became tedious, leading to the birth of Cross-Rollup bridges.

Owlto Finance is a cross-rollup bridge created to improve the transfer of assets from one rollup to another. It simplifies the transfer of local assets from one protocol to another within the Ethereum network. This article will examine what Owlto Finance is all about, how it works, and what makes it unique.

What is Owlto Finance All About?

Source: Official Website

Owlto Finance is an L2 decentralized Cross-Rollup bridge built to exchange local assets in the Ethereum network safely. It facilitates the trade of assets from major networks like Arbitrum One, Arbitrum Nova, Optimism, ZkSync, Starknet, and other L2 Dapps.

The Owlto platform solves Ethereum mainnet’s scalability and cost issues through rollups, essential for providing speedy transactions. It delivers a high-performance, low transaction cost, secure, and reliable platform that is compatible with other networks. It achieves this by bridging rollups to each other, further boosting the ecosystem’s interoperability. With the platform, users can connect with users in the Ethereum, Bitcoin, and Solana ecosystems, fostering a more connected blockchain industry.

History of Owlto Finance

Owlto Finance was founded by Leo Ced in 2023. Since its launch, the platform has experienced tremendous growth, quickly becoming one of the top 3 bridges on Linea within the first year of its launch. In December 2023, the platform developed the first EVM inscribe tool, enabling instant minting inscriptions. It has also amassed the support of many networks, wallets, and tokens.

How Does Owlto Finance Work?

At the core of Owlto is its cross-chain communication mechanism that facilitates interactions between L2 networks and the Ethereum mainnet. It achieves this through Rollups, which help process several transactions before moving them in batches to the Ethereum mainnet for verification. This process greatly reduces the amount of data the mainnet has to process, leading to faster transactions at a cheaper cost.

Furthermore, the platform uses a two-way pegging mechanism to maintain consistency between the Rollup and Ethereum mainnet. This allows for assets to be locked on either the Rollup or the Ethereum Mainnet and later unlocked on either one of the networks. This is achieved through smart contracts that store the assets until unlocked on the other network.

Transactions are executed and processed through a hybrid approach to solving customers’ issues. It offers them a range of services that enable small—and large-scale transactions to be carried out swiftly, safely, and efficiently. It combines liquidity solutions with entry and locking smart contracts for smaller transactions to achieve fast, efficient, and cost-effective bridging transactions. By implementing these tools, the platform can ensure a steady supply of capital to facilitate these transfers.

The Owlto platform uses two major systems when handling bulky transactions. The first system is the integrated Circle’s CCTP, and the second is Chainlink’s CCIP, which ensures a safe and decentralized system. Additionally, the protocol is building a settlement network, relying on EigenLayer restacking and Ethereum’s Proof-of-Stake to ensure the protocol’s security and decentralization.

Regarding security, the platform protects itself from double-spending attacks by employing several techniques, including fraud-proof mechanisms and signature verification. Fraud-proof mechanisms detect and prevent invalid transactions by allowing users to present proof of fraud to the system to prove the validity of transactions. Additionally, the platform uses signature verification to ensure that transactions can only be initiated by the asset owner, thereby preventing foreign access and boosting asset security.

Owlto Finance also includes a hybrid cross-chain solution called Owlto Bridge-as-a-service. This solution supports a plethora of assets, both native and non-native. It is also available to Bitcoin and Ethereum L2 users, providing bridging solutions to various digital assets.

Features of Owlto Finance

Owlto Finance was created to bridge several rollups to ensure the smooth and safe transfer of assets across several blockchains. To achieve that goal, the platform has equipped itself with several features, including:

Wallets

Source: official site

Owlto Finance lets users link their wallets to the network through its official site. Through the platform, users can perform transactions between several networks without having the destination networks in their wallets. The wallet automatically guides users to the corresponding network when a cross-rollup transfer is initiated, reducing user burden.

High Security

All smart contracts on the Owlto Finance platform are open-source. The platform undergoes frequent third-party audits and collaborates with security companies to ensure protocol security. Finally, Owlto operates without issuing tokens, holding assets, or compromising user asset safety.

Speed

Owlto can carry out transactions in record time through the Ethereum mainnet. Transactions are completed in seconds by dealing with Layer 2 networks, independent of Layer 1, greatly boosting transaction efficiency.

Low Cost

Owlto Finance can provide cost-effective transactions because it does not need confirmation from Ethereum Layer 1 for every transaction. The platform bunches processed transactions and moves them to the mainnet directly, cutting the transaction costs greatly.

User Friendly

Owlto is focused on making the user experience with the platform as seamless as possible. It provides a very easy product that almost anybody can operate. Users do not have to be professionals or have vast knowledge about the blockchain industry to use the platform’s products.

AI Agent

Source: official site

Owlto Finance uses AI agents to optimize user product experiences. With the AI Agent, Owlto can improve fund transfer paths, enhance product experience, and help users understand complex blockchain logic to enhance the decision-making process for users.

What Makes Owlto Finance Unique?

Each project in the Web3 ecosystem seeks to put itself above the others by equipping itself with certain characteristics and features that are different from those of competitors. Owlto Finance is no different and has the following unique characteristics:

Owlto Points Program

Source: official site

This is Olwto Finance’s way of rewarding customers for using their platform. The platform includes an incentive system that rewards customers for using their bridging service, referring new customers, participating in quests, and more. These customers are rewarded points differently according to their loyalty level and contributions to the platform.

There are four ways to earn points on the Owlto Finance platform. The first way is through bridging assets. Owlto Finance rewards users who complete bridging transactions on the platform. However, these users are not rewarded according to the amount of the bridged transaction but according to the destination chain of the transaction.

When bridging to the Ethereum network, users are rewarded with 300 points. For other networks on the platform, such as Scroll, Arbitrum, zkSync Era, Base, Linea, Zora, Optimism, BNB Chain, and many more, users are rewarded with 150 points. Lastly, when bridging wstETH/BNB/USD/MNT to other networks, users are rewarded with 100 points.

Finally, the program also has a multiplier system that rewards the users for completing more transactions on the platform. The multiplying of points is set in the following way:

• One to two transactions: 1X multiplier
• Three to ten transactions: 1.1X multiplier
• Eleven to Fifty transactions: 1.2X multiplier
• Fifty-one to One Hundred transactions: 1.3X
• Above A hundred transactions: 1.5X

Another way for users to earn points is by completing quests available on the platform’s site. This grants users extra points in addition to the basic bridging transaction points earned from bridging transactions. Users can also earn points by referring new users to the platform. These new users are then linked as your referee through your link and after completing their first transaction. Once the referee earns points, 10% of their total point is accredited to you.

Lastly, there’s a daily check-in system that rewards users with two points for checking in each day. On days when the users perform a bridging transaction, this reward is multiplied by five, summing up to ten points.

Fees

Owlto has a unique fee structure that comprises two parts: bridge fees and Destination TX Costs. Bridge fees are payments made to the platform and market makers. These fees are a percentage deducted from the transaction amount paid by the user. Destination TX Costs are dues paid to the market maker to cover the required fees needed when transferring assets to the destination chain.

The duo fee system ensures that transactions are carried out speedily and securely without abandoning the interests of the market maker. To ensure the interests of all parties involved are adequately catered for, the gas fees are adjusted based on the destination network’s Gwei (one-billionth of one ETH), keeping the fees below the average.

Deploy

With just one step, users can become developers by deploying smart contracts on the base network. This helps elevate the value of the user’s address and grants them access to airdrops on the platform. By deploying more smart contracts on the base network, users score more points. The higher the user’s score, the higher their chance of getting more benefits, especially if there is an airdrop.

Users who have launched smart contracts can check their scores through the special service called Onchainscore.xyz. By deploying one to five smart contracts, you can verify two developer roles officially recognized by the base network through Base Guild.

How To Use Owlto Finance Cross-Rollup Transfers

Owlto Finance boasts a user-friendly system that facilitates easy cross-rollup transfers. Below is a step-by-step guide to using the platform.

Step 1

To be able to perform transactions, the first thing you need to do is connect your wallet.

Source: Owlto Finance Docs

Owlto Finance enables transfers between Ethereum and Layer 2 projects like Arbitrum One, Optimism, zkSync Era, and many more. It also supports transfers between Bitcoin Layer 2s and other networks like Solana.

However, users do not need to add these networks to their wallets in advance. The platform is designed to direct the user to the right network if it has not been added to the wallet before. Also, if the correct source network has not been selected, the network guides the user to switch to the appropriate one.

Source: Owlto Finance Docs

Step 2

The second step is transferring tokens across chains. Here, the user can decide which two networks to use for their transfer. The cross-rollup page will inform the user of the cost of the transaction and the time it will take.

Source: Owlto Finance Docs

Step 3

The next step is transfer confirmation. To ensure no mistakes are made, rather than carrying out the transaction immediately, the platform draws up a confirmation page that displays the transfer information, such as the destination TX cost, the destination network code, the total amount, and the amount the destination address will receive. The user also has the chance to go back and modify whatever issue they find. Once satisfied, the user can confirm and send the transaction.

Once confirmed, the wallet will execute the transaction, and a small ETH gas fee will be deducted to complete the transaction. The transaction could fail if the gas fee rises due to an increase in Gwei (one-billionth of one ETH) or if there is a network issue. This can be easily solved by simply trying the cross-rollup transfer again.

Step 4

After completing the rollup transfer, the user must go to the cross-rollup transfer status page to access the transaction’s situation. Once the transaction is deemed successful or is still ongoing, the user can go to the previous page and initiate another transaction without affecting the ongoing transaction.

Step 5

The final step is the History page. The platform has a cross-rollup transfer History page where you can check each transaction record, including the time, amount, and the selected network used in the cross-rollup transfer.

Roadmap of Owlto Finance

Owlto Finance provides solutions to cross-chain asset interoperability by connecting different Layer 2 solutions. To accomplish its goals smoothly, the platform developed the following roadmap.

Phase 1: Product Release

The product release stage includes the launch of the Cross-Rollup bridge, which facilitates the exchange of assets from different Layer2 networks. It also includes the design and development of the user interface, the launch of smart contracts, and the introduction of cross-chain verification and asset mapping. By doing so, the platform creates a safe, easy-to-use, and efficient asset interoperability experience, leading to better interoperability between different Layer 2 networks in the Ethereum ecosystem.

Phase 2: Community Building

After its release, Owlto will proceed to work on its ecosystem and community building. This phase will include improving product features, boosting user experience, and promoting the platform’s services to more L2 scaling solution providers. The platform aims to support the majority of the Optimistic and ZK Rollup network’s cross-chain needs, boosting interoperability and enhancing the flow of assets.

Phase 3: Ecosystem Expansion

Once Owlto has gained widespread adoption, the platform’s next step is to expand its application scenarios within the ecosystem. This involves working with De-Fi, NFTs, Gaming, and other industry fields. By doing so, Owlto will become a household name that promotes asset flow and interoperability across different chains.

Phase 4: Technological Innovation

With the growth of blockchain technology, Owlto realizes the need to keep up with the times. The fourth phase of their roadmap involves continuous optimization and upgrade of protocols and technology, as well as the development and application of new technology, to provide their services in the best way possible.

Phase 5: Global Promotion

The final step in Owlto’s Roadmap is Globalization. This includes promoting the market, building the community, and partnering with international bodies to boost the platform’s global application, thereby increasing asset interoperability and flow worldwide.

Is Owlto Finance A Good Investment?

Owlto has tasked itself with ensuring the smooth and speedy flow of transactions between rollups. It greatly enhances the interoperability of the Web 3 ecosystem by bridging the gap between different chains, granting users several networks all from one platform.