The last six months have been a whirlwind of furious research and development for the Wanchain team. It may be the understatement of the century to say that a lot has happened since January 2020 and, as a result, our vision has become sharper and more focused. Today we update our community with a new development calendar and roadmap that reflects this shift in strategic direction. We’re more excited than ever about what lays ahead of us, but to understand where we are going, you need to have some idea about where we’re coming from…
The Genesis of Cross-Chain DeFi
The Wanchain dev team has had their noses to the grindstone for the last 6 months, laying the foundations for a world of truly decentralized Cross-Chain DeFi. While DeFi has been a buzz word for quite while, the DeFi ecosystem is still in a relatively early stage of development. As young as DeFi is as a movement in the blockchain industry, Cross-Chain DeFi is in an even more nascent stage.
Cross-Chain DeFi’s Early Building Blocks
One of the earliest cross-chain concepts was that of the atomic swap between two different blockchains. While this innovation allowed for the creation of simple cross-chain use cases, it was limited in its utility and did not allow for the creation of complex financial applications.
The launch of bitBTC on the Bitshares exchange was one of the first attempts to represent a native blockchain asset (BTC) on another blockchain as a placeholder token for use in a financial application. The bitBTC token was meant to establish a price peg between bitBTC on the Bitshares blockchain and BTC on the Bitcoin blockchain. This concept had the potential to unlock a whole world of new use cases since it allowed for the representation of multiple different tokens representing assets from many different blockchains. Real world assets such as USD or CNY could even be represented using this mechanism. These price-pegged tokens interacted directly with each other through smart contracts simultaneously on a single blockchain. Due to serious problems in the design of bitBTC and other similar Bitshares-based assets, bitBTC was unable to keep its peg price. Unfortunately, bitUSD and bitCNY suffered the same fate and the initial promise of cross-chain decentralized assets never really took off.
Cross-Chain DeFi Evolved with 1:1 Exchangeable Assets
The real beginning of cross-chain DeFi was around late 2018 / early 2019 with the introduction of the original ERC20 WBTC on Ethereum. WBTC stands for “wrapped BTC” and, similar to “wrapped ETH” or WETH, the “wrapped” part refers to a simple smart contract that wraps around the core digital asset so that the crypto asset can function in the world of interlinked smart contracts that is the DeFi world of today.
While Wanchain does maintain its own version of “wrapped” BTC as a WRC20 token, the ERC20 version of WBTC has taken off, largely due to its ability to guarantee a 1 to 1 swap with actual BTC held on the Bitcoin blockchain. This conversion mechanism, combined with increasing depth of these fungible assets, has largely eliminated the price pegging issue that doomed bitBTC. The relatively recent integration of Ethereum WBTC into pioneering DeFi applications such as MakerDAO, Compound, and others — marked the beginnings of the widespread use of cross-chain value in DeFi applications. Today, there are 11,505 WBTC on the Ethereum blockchain, representing more than $105 million of value wrapped into Ethereum smart contracts. In total, according to BTConEthereum.com, more than $140 million of value denominated in bitcoin rides on the Ethereum blockchain.
With a total BTC market cap of more than $168 billion and few use cases that utilize that value besides HODL, that number is set to explode upward in the near future. Right now we have less than 0.1% of the value of BTC on Ethereum. That’s how early we are.
One of the biggest criticisms of WBTC is that in order to make the 1 to 1 exchange of BTC to WBTC or vice versa, one must pass through a centralized service provider. Obviously, this mechanism is completely contrary to the decentralized and permissionless ideals of cryptocurrency in general. As a result, a number of alternatives to WBTC on Ethereum have emerged, most notably renBTC and pBTC. However, their current combined value pales in comparison to WBTC. Due to bandwith or mechanism design or simply just community awareness, a clear winner has yet to emerge.
It is not unreasonable to expect a 100-fold increase in the number of bitcoins wrapped on Ethereum. That number does not include any potential increase in the value of BTC itself. We are still just so early in this cross-chain movement of value. It’s a problem that Wanchain engineers have puzzled over for years. We now think we have an elegant solution that we can share with the world!
Wanchain’s Cross-Chain Solution
Years ago, Wanchain pioneered an alternative model for generating cross-chain tokens that makes use of secure multiparty computation and threshold secret sharing (TSS) to allow for a group of nodes called Storeman Nodes to perform the cross-chain exchange of BTC to WBTC on Wanchain. Simply put, this novel design allows for the exchange between BTC and wrapped BTC to happen without any centralized party managing the transaction. The cross-chain exchange is permissionless, trustless, and decentralized — which has clear advantages over other centralized solutions. We already have this working on Wanchain.
Today, we’re happy to announce that we intend to introduce this design to the Ethereum blockchain. We are happy to introduce you to wanBTC, an Ethereum-based wrapped bitcoin solution, that we will be rolling out soon.
Wanchain 5.0 Will Enable True Cross-Chain DeFi
Until recently, Wanchain cross-chain implementations have focused on building Storeman Node based bridges to bring assets from other blockchains to Wanchain. Now that we have perfected our cross-chain technology, we aim to extend it to not only bring cross-chain tokens to Wanchain, but also to other blockchains, primarily Ethereum for the near future. But this could be applied to any blockchain that we support, which for now is BTC, ETH and EOS but we will be integrating more chains shortly.
Wanchain 5.0 introduces the concept of “two-way bridges.” Two-way bridges use the same Storeman Node technology used to bring cross-chain WRC20 assets to Wanchain to bring cross-chain ERC20 versions of assets such as BTC, EOS, and WAN to Ethereum. In the near future, new blockchain integrations will enable more cross-chain tokens from other chains to be brought to Ethereum.
We will first focus on integrating additional Ethereum and Bitcoin forks. ETC and LTC combined, for example, represent about $3.5 billion of economic bandwidth that currently cannot participate in the DeFi protocols that have recently brought the cryptocurrency market back to life.
Building two-way bridges to bring Wanchain’s cross-chain assets to Ethereum is one important part of our plan, but perhaps equally important is actually moving enough of those assets over to Ethereum to ensure that there is sufficient liquidity for each asset to make them useful. Our first priority will be to ship over large quantities of cross-chain ERC20 WAN for usage as collateral in our Storeman Nodes which will form the bridges connecting Ethereum. We will also work to promote the integration of this new ERC20 WAN token, wanWAN if you will, into a variety of Ethereum DEXes, AMMs and other DeFi products.
Note: This new cross-chain ERC20 WAN token that will serve as a placeholder for the native WAN coin that lives on the Wanchain blockchain will be a new and separate smart contract with a new address that is completely different than the old ERC20 WAN fundraising token issued during the original Wanchain ICO. That original ICO version of ERC20 WAN is no longer a valid token for any purpose.
Our second priority will be to bring over a large supply of cross-chain ERC20 wanBTC and use it to enhance liquidity on a variety of Ethereum DeFi applications. As we intimated earlier, we believe that the limiting factor of DeFi on Ethereum will soon be the lack of available economic bandwidth. We expect DeFi user growth to outpace the growth in value available in native Ethereum assets. Therefore, we think a truly decentralized method for importing valuable assets from other chains for use as Ethereum tokens will provide tremendous value to WAN token holders and the DeFi movement in general.
Our initial focus will be on providing wanBTC to wrapped BTC pools which aggregate a variety of different ERC20 BTC versions into a single pool. Later, we will expand our focus to promote the use of our cross-chain wanBTC in a variety of different DeFi applications including DEXes, lending applications, derivatives, and liquidity pools such as Uniswap and Curve. The fantastic part about this strategy is that we can also facilitate the transfer of these bridged assets to other chains should DeFi prove to be constrained by the increasing costs of Ethereum gas usage.
The next step would be to enable the trustless transfer of assets from other blockchains such as EOS and other future integrations as cross-chain assets on Ethereum. Think wanEOS, wanLTC, wanETC, and so on — a family of wanTokens ripe to significantly enhance the economic bandwidth for DeFi applications. After bringing a sufficient supply of cross-chain tokens, we will promote their integration into a variety of DeFi applications in addition to our cross-chain WAN and wanBTC .
Dual DApps Initiative
As a part of this strategy, we will release and promote dual versions of DeFi DApps on both Ethereum and Wanchain. The pilot DApp to be launched under this Wanchain ecosystem initiative is the FinNexus FNX Options platform, which currently operates on Wanchain but will soon operate on both Wanchain and Ethereum from the same webpage / wallet interface. This first Dual DApp will be followed by others. We will promote the use of our cross-chain assets within these applications on Ethereum, while also promoting the use of the Wanchain versions of each Dual DApp to users who would like to take advantage of Wanchain’s far cheaper gas fees and much faster transactions.
That, in a nutshell, is our strategic response to the DeFi boom. Wanchain was founded on the principle of providing the infrastructure that connects the decentralized financial world. It’s even written on our website. We believe this pivot is, in fact, more aligned with our original vision than what we’ve been doing recently. We’re incredibly excited to set out in this new bold direction and play our part in the explosion cross-chain DeFi to come.
And now, without further ado, we present our updated mid-year roadmap.
Presenting the Updated 2020 Roadmap:
Roadmap Updates Reflect Changing Priorities
As a close observer you may have noticed several important changes to the 2020 roadmap, which we outline below.
All of the newly added roadmap items support the new Cross-Chain DeFi vision laid out above. They fall into several categories:
- Cross-chain infrastructure enhancements
- Promoting the use of WAN
- Enhanced decentralization
- Ecosystem building
Wanchain 5.0, for example, falls into a number of these categories. The most important part of Wanchain 5.0 is the enhancement of Wanchain’s cross-chain infrastructure to bring cross-chain assets to Ethereum. Another important aspect of Wanchain 5.0 is the implementation of Open Storeman nodes. This initiative opens up Storeman Node membership to any node operator who would like to participate. Anyone can run an Open Storeman node without permission, and all node operators are kept in check by on-chain economic incentives and punishments. This change should greatly increase the capacity for decentralization of the Storeman Node system, and makes it truly permissionless and trustless. Wanchain 5.0 will also include an upgrade to the cross-chain process in order to allow for faster cross-chain transactions.
Promotion of the WAN token in both its native coin and ERC20 token forms is one of the key priorities of the roadmap updates. The establishment of more and more Storeman Nodes used to power 2-way bridges will require a large amount of additional staked WAN to serve as collateral. Multi-asset collateral will be implemented so that other assets besides WAN can be used, but WAN itself will be heavily promoted for use as collateral. This new feature of our token economy will in turn offer new opportunities for Wanchain community members to delegate their WAN to Storeman Nodes in order to contribute to securing the cross-chain bridges.
The release of reserved Galaxy Consensus mechanism slots to the public is a massive step bringing Wanchain closer to 100% decentralization.
The newly launched DApp Store is a key element in our ecosystem building plan. The DApp store makes it easy for developers to let Wanchain users access their applications and perform cross-chain transactions within the same interface.
Our support in the launch of DApps built by Wanchain ecosystem projects is an important element of our above mentioned strategies as these DApps will form the basis of the Dual DApps to be launched on Ethereum after the implementation of 2-way bridges.
Other Important Changes
New cross-chain blockchain and token integrations with Wanchain have been postponed until after the implementation of Wanchain 5.0. The purpose of this change is allow for the faster development of two-way bridges to bring our current menu of cross-chain tokens to Ethereum. The postponed blockchain and token integrations will take place after the two bridges are established, and will be used to bring a wide variety of different cross-chain assets to Ethereum.
Proofs of concept and new standards have been labeled as “decreased priority” in order to let us focus more on Wanchain 5.0, the development of 2-way bridges, bringing more cross-chain assets to Ethereum, and development and promotion of more Dual DApps.
Sharply Focused on the Way Forward
The second half of 2020 will be a very exciting time for the Wanchain community! It will see the launch of new cross-chain assets on Ethereum, dramatically increased decentralization of low level infrastructure, and an expansion of our DApp ecosystem. In addition to the core roadmap items we have outlined above, don’t be surprised if you also see a variety of important enhancements to both general user and developer facing applications. You may see enhancements to our mobile, desktop, and web wallets, as well as developer facing tools which make adding cross-chain functionality to DApps and wallets as easy as including just a few extra lines of code. You may also see improvements to a variety of Wanchain ecosystem websites and tools such as blockchain explorers, documentation websites, and possible homepage enhancements as well.
But let’s revisit the most important announcement in this mid-year update:
Say hello to wanBTC!
Here’s looking forward to another six months of buidling!
Wanchain is the infrastructure connecting the decentralized financial world. Wanchain’s live cross-blockchain solution is EVM-based, includes optional private transactions, and provides a decentralized, permissionless, and secure approach for interoperability. Wanchain has employees globally with teams in China, the USA, and other team members around the world in Asia, Africa, and Europe.