In the multi-chain landscape of the blockchain world, achieving safer and more convenient cross-chain interoperability has always been a challenging task. With increasing demand for cross-chain transactions among blockchain users, the challenges of cross-chain interoperability have become more prominent. The common challenges include:

■ Security: Security is one of the most common challenges in cross-chain transactions, as cross-chain bridge protocols that attract significant assets have become primary targets for hacker attacks in recent years.

Blockchain relies on validators to verify and execute transactions, and cross-chain bridge protocols also need trusted third-party validators to verify and process cross-chain transactions. In this process, if the cross-chain bridge lacks sufficient incentives, has a limited number of validators, or relies on an overly centralized trust model, hackers may exploit these weaknesses by attacking validators to compromise the bridge and steal assets. Additionally, vulnerabilities within the cross-chain protocol contracts often become entry points for hacker attacks.

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On the afternoon of August 6, 2024, the Ronin Bridge reportedly suffered a suspected hack, resulting in the theft of approximately 4,000 ETH and 2 million USDC, amounting to a loss of around $12 million. Notably, in March 2022, Ronin Bridge experienced what was referred to as the “largest loss in DeFi history,” when hackers compromised five out of nine validators, stealing a total of 173,600 ETH and $25 million in USDC, valued at over $600 million.

■ High Gas Fees: Cross-chain transactions tend to incur higher gas fees, as users must calculate the actual transaction cost based on the gas fees required for operations on both the originating and destination chains.

■Complexity: Each blockchain operates independently, with its own consensus mechanisms a nd protocols. This fragmented and isolated state between chains often requires relatively complex and cumbersome procedures for users transferring assets and data across chains. In cross-chain transactions, users with frequent trading needs are more susceptible to price slippage, increasing the difficulty of transactions.

To address these issues, Uniswap Labs and the interoperability protocol Across jointly proposed a new standard solution, ERC-7683, on May 20, 2024, aimed at making cross-chain transactions simpler, faster, and more secure through a shared execution network.

ERC-7683

The ERC-7683 standard is based on the CrossChainOrder structure, providing an ISettlementContract smart contract interface that allows for the implementation of a standardized API for cross-chain transaction execution systems.

The core technical proposal of the ERC-7683 standard is that all “cross-chain intents” follow a unified order structure, a method that significantly enhances the flexibility and user-friendliness of cross-chain operations.

As Uniswap Labs highlighted on their social platform X, the ERC-7683 standard provides a clear path toward unifying Ethereum.

△ Figure 1: Illustration of Cross-Chain Order Structure Under ERC-7683 Standard

Source: Uniswap Labs

Current Development and Application

On August 21, 2024, Layer 2 solution Optimism announced the adoption of the ERC-7683 cross-chain standard, aimed at enabling more efficient transfers of ETH and USDC on its Superchain and further promoting application-layer interoperability across the broader Ethereum ecosystem. Currently, Optimism has integrated the cross-chain solution provided by the interoperability protocol Across.

In May 2024, Uniswap Labs announced upon releasing the ERC-7683 standard that it would adopt this standard in collaboration with UniswapX’s cross-chain initiatives.

It is worth noting that the ERC-7683 standard is merely a standard API for cross-chain transaction execution systems, ensuring consistency in user experience at the implementation entry point. However, even with the ERC-7683 implementation, a common challenge in cross-chain transactions remains: securing adequate cross-chain liquidity.

The effectiveness of the ERC-7683 standard implementation depends on cross-chain liquidity. Insufficient liquidity could mean that the standard struggles to attract enough active “Fillers” (refer to Figure 1 in the text) to support users’ “cross-chain intents.” With too few Fillers, user intents may not be able to secure optimal costs or improved experiences through competitive mechanisms.

This indicates that implementing ERC-7683 will require a network effect — more use cases adopting the standard, more users using it, leading to more Fillers, which ultimately enhances the overall efficiency of cross-chain transactions.

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▶ Learn More About ERC-7683

Visit: https://www.erc7683.org

▶ See Uniswap Labs and Across’s Joint Ethereum Improvement Proposal on Ethereum Magicians Forum

Visit: https://ethereum-magicians.org/t/erc-7683-cross-chain-intents-standard/19619

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Support from Ethereum’s Founder

Public reports reveal that Ethereum co-founder Vitalik Buterin expressed specific support for the development of the new cross-chain transaction standard ERC-7683 via social media. He noted that operations following the ERC-7683 standard could include batch transactions, Merkle proofs, and other on-chain activities, exemplifying how ERC-7683 will function. He stated,

“With the ERC-7683 standard, users can paste an ERC-7683 address into their wallet and, with a single click, seamlessly transfer assets on any chain to another account.”

A multi-chain environment is an inevitable development in the Web3 era. For the further progression of the Web3 world, optimizing and simplifying cross-chain transactions and unlocking additional liquidity are crucial challenges. The ERC-7683 standard addresses key pain points in cross-chain transactions, significantly enhancing blockchain interoperability, and its application will have a far-reaching impact on the blockchain world. At present, users can expect that the improved user experience brought by the ERC-7683 standard will directly benefit more DeFi projects, injecting more liquidity support and accelerating growth.

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