New version — Flash Trade on swaps.io (demo)
Greetings from Kinetex!
In the last post, the team shared their exciting results from the ETHGlobal hackathon in Lisbon, Portugal. The hackathon was backed by several prominent DeFi ecosystems such as Polygon, Metamask, Aave, 1inch, and Gnosis Chain. These ecosystems recognized and awarded exceptional products and developments that utilized their technologies.
The Kinetex team achieved remarkable success and won multiple prizes from the 1inch Network, Gnosis Chain, and Scroll for their innovative product, Kinetex Flash. Let's delve deeper into this award-winning model and the main technologies behind it, including light clients and Zk proofs.
The team has implemented a solution based on zero-knowledge technology to validate transactions and ensure security. Firstly, the team forked the LightClient implementation from Succinct Labs, making the required changes and optimizations for cross-chain trading. Consequently, instant cross-chain transfers and gas optimization became possible, allowing the team to reduce gas costs to 60-90k gas units on all supported networks.
Furthermore, the team incorporated into the project’s overall architecture several technologies from the sponsors, including 1inch's Fusion technology, Aave's Flash Loans, and the Uniswap protocol.
Firstly, the simplified version of a Kinetex resolver uses Fusion technology to settle orders on-chain, thus allowing for the most profitable deals. Secondly, Flash Loans are used to close the market maker's debts and release the asset to the user while retaining the liquidation profit. Thirdly, the Uniswap protocol is used for on-chain asset exchange during order liquidation. Finally, the team has added the Gnosis Chain as a network through which Kinetex can provide Zk proofs.
Blockchain ecosystems depend heavily on clients and nodes that run them. Clients are software that enables users to securely and decentrally access and interact with a blockchain in a secure and decentralized manner. Nodes are computers that run such software, facilitating the operation of a blockchain.
The Ethereum network originally only had full nodes, meaning each node got a complete copy of the blockchain. Running a full node is the most secure, decentralized, and censorship-resistant way to interact with the Ethereum network because constant copying and synchronization help ensure no manipulations or malfunctions. However, as you can imagine, running a full node requires a significant amount of computing power, memory, time, and so on, making it highly impractical for everyone to use those nodes 24/7.
Light nodes arise as a possible solution to this problem. They may be inferior to full nodes regarding security but gain significant performance improvements, firstly enabling users with less powerful computers to join in and secondly allowing for faster and cheaper transfers. Instead of keeping local copies of the blockchain data and independently verifying all changes, light clients request the necessary data from a full node (or an intermediate provider). Then, the client verifies data to keep up with the head of the chain, only occasionally downloading the actual block contents.
Note that the lightness of nodes may vary depending on the client software they run. For instance, a combination of a light execution client and a light consensus client will be the lightest, and a combination of a full execution client and a full consensus client will be, consequently, the fullest. However, most often, you can meet a combination of both.
Zero-knowledge proofs (Zk proofs) are a groundbreaking cryptographic technique used in Kinetex. They allow one party to prove to another that a statement is true without conveying any additional information except its validity.
In Kinetex's ecosystem, Zk proofs will be used to verify token transfers between different blockchains and facilitate liquidation processes. For instance, if a market maker chooses to fill an order but fails to send required tokens to a user, a Zk proof of the failed trade will be created. This proof can be used to initiate a refund from the maker's collateral, guaranteeing the security and integrity of every transaction.
Zk is also utilized in Zk Light Clients, which are on-chain entities regularly updated by Kinetex protocol maintainers, forming a decentralized network. The stake provided by the participants guarantees the network's proper functioning. For instance, if a Protocol Maintainer (one of the four vital roles in the Kinetex protocol; learn more about this and other roles here) fails to provide proof and update the Zk light client, their stake may be reduced, ensuring honesty and integrity within the system.
Kinetex can provide an innovative, secure, efficient platform for swapping tokens across blockchains. By combining instant p2p transfers with professional market makers, collateral that ensures the decency of market makers and secures user funds, Zk proofs that facilitate the liquidation process, and Zk light clients that provide the system's robustness, Kinetex will be able to take cross-chain swaps to the next level.
The Kinetex team is incredibly proud and satisfied with how well Kinetex Flash was received at the ETHGlobal in Lisbon and cannot wait to continue working on this innovation! Stay tuned for further updates!
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