What is the Across Protocol and How does it Work?

Across Protocol is a cross-chain bridge for Layer 2s and Roll-Ups secured by UMA’s optimistic oracle. It is optimized for capital efficiency with a single liquidity pool, a competitive relayer landscape, and a no-slippage fee model. In this article, we will explore the history of Across Protocol, its key features, how it works, and its tokenomics.

What is Across Protocol?

Across Protocol is a decentralized platform that enables the secure and efficient bridging of assets between Ethereum and other blockchain networks. It is designed to facilitate seamless and low-cost transfers of tokens between different chains, providing users with a single point of access for cross-chain transactions.

Source: Across Protocol’s Whitepaper

Governance and ACX Token

The ACX token governs the decisions that affect the function of Across Protocol and manages the DAO’s treasury. It is an ERC-20 token that allows for decentralized ownership and control of the protocol. Governance was “turned on” at token launch, and the lifecycle of a proposal includes ideation, discussion, proposal, feedback, voting, and execution. Across Protocol uses Forum and Snapshot as its governance platforms.

In addition to governance, ACX also incentivizes liquidity providers and those participating in the Across Referral Link program.

History of Across Protocol, Origins, and Key Person on ACX

A group of seasoned blockchain developers and enthusiasts founded Across Protocol because they saw the need for a secure and effective cross-chain bridge in the developing DeFi landscape. The team collaborated with UMA and Snapshot to develop an optimistic governance tool, leveraging UMA’s optimistic oracle technology to ensure the security and integrity of the platform.

The project has since gained significant traction, securing strategic partnerships with key players in the DeFi industry and raising funds to accelerate its growth. The ACX token was introduced to govern the decisions affecting the function of Across Protocol and manage the DAO’s treasury, enabling decentralized ownership and control of the platform.

The ACX token will be used to govern the Across bridging protocol and ACX token holders will control protocol parameters and DAO treasury management.

The token will be airdropped based on criteria measuring early support, including strategic community support and liquidity provision. The Risk Labs foundation will work alongside the Across DAO to iterate on the bridge’s design and drive adoption. A Bridge Traveler program offers a chance for eligible addresses to join the airdrop before November 8, 2022.

How does the Across Protocol work?

Across Protocol operates using a single liquidity pool, which enables lower costs for users and higher yields for liquidity providers. The majority of liquidity provider (LP) assets are kept on the mainnet, where they are most secure, and the protocol uses bots to rebalance between designations using the mechanical bridge. The overall utilization of the assets in the single liquidity pool is what drives the interest rate fee model, which offers users more consistent pricing.

The platform utilizes third-party relayers who risk their funds to bridge assets, allowing for faster transaction times and increased competition. The relayers can move funds far quicker than the origin or destination chains’ finality times, enabling fast fills for users’ deposit requests.

Across Protocol also employs UMA’s optimistic oracle to confirm transactions on all chains and ensure their correctness. In the case of incorrect transactions, disputes are resolved by UMA token holders, requiring only a single honest actor to detect fraud.

The Universal Bridge Adapter (UBA)

Across has revealed its Universal Bridge Adapter (UBA), which enhances interoperability by enabling connections between any EVM-compatible blockchain using an incentivized rebalancing mechanism.

The UBA works by combining the best aspects of existing models, reducing the reliance on canonical bridges while retaining the ability to rebalance at the protocol level wherever they are present efficiently.

The product upgrade also opens up a fundamental shift for Across to push the boundaries on interoperability, enabling it to add support for any EVM-compatible chain at a much faster pace, rewarding depositors who bring the protocol closer to its target liquidity balance on each chain.

ACX Token Distribution and Allocations

The distribution of ACX tokens is as follows:

• 115MM ACX for Airdrop, including:
  • Community: 20MM ACX
  • Early Bridge Users (Bridged before July 19, 2022, at midnight UTC): 15MM ACX
  • Liquidity Providers (Provided liquidity before November 27, 2022, at midnight UTC): 70MM ACX
  • Bridge Traveler Program (Program ran from October 11, 2022, to November 8, 2022): 10MM ACX
• 250MM ACX for Strategic Partnerships and Fund-Raise, including:
  • $UMA token swap with Risk Labs: 150MM ACX
  • Strategic fundraise: 100MM ACX
• 100MM ACX for Protocol Rewards, including:
  • Referral program: 25MM ACX
  • Reward locking program to incentivize LPs: 75MM ACX
• 535MM ACX for Across DAO Treasury Reserve

Main Features of ACX

Capital Efficiency

Capital efficiency is a crucial aspect of cross-chain bridges, and Across Protocol’s single liquidity pool design, combined with the interest rate fee model, ensures lower costs for users and higher yields for liquidity providers. By keeping the majority of LP assets on the mainnet, the protocol ensures maximum security and efficiency.

Permissionless Relayer Ecosystem

Across Protocol’s permissionless relayer ecosystem enables third-party relayers to risk their funds to bridge assets, fostering a competitive landscape where relayers can take calculated risks and compete with each other on speed to fill users’ deposit requests.

Optimistic Oracle

The use of UMA’s optimistic oracle ensures the security and correctness of transactions on all chains. This technology allows for the resolution of disputes by UMA token holders, requiring only a single honest actor to detect fraud.

Rewards and Referrals

Source: Across Protocol’s Whitepaper

Across Protocol offers a reward-locking program and referral rewards for users, providing additional ways to earn ACX tokens and contribute to the protocol’s growth. The referral program’s duration depends on the ACX price and the volume of referral transactions, while the reward locking program incentivizes liquidity providers with ACX emissions.

Community Governance

Across Protocol’s governance model empowers the community to make decisions directly affecting the platform’s future. By using the ACX token, holders can participate in the ideation, discussion, proposal, feedback, voting, and execution phases of the governance process, ensuring that the protocol remains in line with the interests of its users.

Partnerships and Integrations

Across Protocol has established strategic partnerships with key players in the DeFi industry, further expanding its reach and functionality. Some notable partners include:

• UMA: Collaborating on developing the optimistic oracle technology that secures Across Protocol’s transactions
• Snapshot: Providing a platform for decentralized voting on Across Protocol’s governance proposals

As the platform continues to grow, additional partnerships and integrations will likely be established, further increasing the utility and adoption of Across Protocol.

Is ACX a Good Investment?

Across Protocol is a cutting-edge solution for secure and efficient cross-chain bridging in the rapidly expanding DeFi landscape. With a focus on capital efficiency, a permissionless relayer ecosystem, and the use of UMA’s optimistic oracle technology, the platform offers a comprehensive solution for users to interact with multiple blockchain networks seamlessly. By empowering the community through decentralized governance and rewarding participation with the ACX token, Across Protocol is poised to become a significant player in the world of decentralized finance.

How can you own ACX?

Going through a centralized cryptocurrency exchange is one approach to acquiring ACX. The first step is to create a Gate.io account and complete the KYC process. Once you have deposited money into your account, follow the instructions to purchase SPA on the spot or futures market.

News from Across Protocol

• May 2023: Optimistic governance is introduced to Across’s optimistic bridge.
• Apr 2023: Across focuses on bridge security design.
• Feb 2023: ACX token is now live.
• Nov 2022: A strategic partnership is established with Hack VC, Placeholder, and Blockchain Capital for a $10MM successful token sale. Across also introduces Reward Locking for liquidity providers.
• Aug 2022: Across launches referral program.
• Jun 2022: Across releases V2 and provides a sneak peek into V2.

Take Action on ACX

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