Web3 ultimate tool for breaking barriers, a unified operating system

Author: Yudan.lens

With the rapid development of blockchain technology, the crypto world has entered an era of multi-chain coexistence. The "impossible triangle" of blockchain—security, scalability, and decentralization—has spawned thousands of tokens and hundreds of chains. From the L1-centric public chain narrative of the last cycle to the current cycle of Optimism and Arbitrum, Layer 2 is the future trend but has also led to fragmented liquidity.

According to data from the platform Defillama, there are currently 177 chains with a total TVL of $47.84 billion, and the total market capitalization of stablecoins on these chains is $133.08 billion. Maximizing the utilization of these assets and integrating information is crucial, as the interoperability between these chains ensures that different chains can communicate with each other and maintain global state and token liquidity.

Interoperability is key to enabling blockchain technology to achieve scalability and connectivity, allowing different blockchain networks to work together while each handles its own tasks, thus facilitating broader applications and better user experiences.

Interoperability Solutions

Based on the principles of interoperability, there are currently three common solutions. One of the most common methods is to establish a bridge between two blockchains, allowing users to transfer tokens and other information from one network to another. According to Defillama's platform data, the total TVL of cross-chain bridges and protocols has reached $11.5 billion, with 40 bridges and 24 protocols recorded.

The second solution acts as a connecting layer between different blockchains, serving as an intermediary chain that verifies and forwards messages between chains. The advantage is low cost, but it is vulnerable to single points of failure, which can lead to reduced security. Currently, two of the most notable protocols in this category are Polkadot and Cosmos. For Ethereum, they represent independent new ecosystems that adopt similar horizontal scaling approaches, aiming to create another blockchain universe. Their solutions for interoperability are fundamentally re-engineering from the ground up rather than addressing existing multi-chain coexistence issues.

The third solution involves running a light node on-chain. A light node is a type of node that only stores a portion of the ledger's transaction history and connects to full nodes to enhance validation. The on-chain light node approach is very secure but also costly. LayerZero and Wormhole are examples that utilize light node forms.

LayerZero

LayerZero is a full-chain interoperability protocol designed for the cross-chain transmission of lightweight messages. LayerZero introduces the concept of ultra-light nodes based on light nodes to provide the security of light nodes at a more cost-effective price, similar to intermediary chains. Users can operate seamlessly across multiple chains; using bridges to solve this problem requires establishing a separate bridge for each pair of chains, with each chain needing its own interface and code. With LayerZero, all chains can connect through a single interface and code, making multi-chain dApps much more convenient to use. The transmitted information is no longer limited to single assets; state sharing, bridging, lending, swapping, and governance can all be achieved.

As early as 2022, LayerZero raised over $100 million at a valuation of up to $1 billion and is currently developing rapidly. It is one of the most anticipated projects among those yet to issue tokens.

Currently, products based on LayerZero include Stargate. Stargate is a liquidity transfer protocol that utilizes LayerZero's universal messaging to achieve cross-chain liquidity transfer of native assets. It has currently captured a TVL of $447 million.

Source: defillama.com

The largest lending protocol on Arb will also directly use LayerZero's technology in subsequent iterations, with the V1 version still based on the Stargate protocol. This indicates that the technical development difficulty is still considerable. However, the current simple version has already captured $136 million, far exceeding AAVE V3's $65.14 million.

Source: defillama.com

Wormhole

Wormhole is a decentralized universal messaging protocol that connects multiple blockchains. Wormhole addresses this issue by monitoring messages sent by smart contracts on multiple chains. This is achieved through the Wormhole core layer, which deploys core contracts on each chain to route received messages to the target chain, which is the core function of the previously mentioned universal messaging protocol. Wormhole currently consists of a guardian network made up of 19 nodes. From the user's perspective, Wormhole's solution is relatively less smooth.

In addition to being a universal interoperability protocol, Wormhole is also an ecosystem and platform for developers to expand decentralized computing space. Wormhole consists of multiple modular exchange components that can be utilized independently and supports an increasing number of composable applications built by various teams.

Currently, Wormhole's TVL is $290 million. The ETH chain accounts for a significant portion, and the TVL distribution is quite uneven compared to STG.

Source: wormhole.com

In February, a draft proposal regarding the launch of Uniswap V3 on the BNB chain sparked a debate about which tools should be used to achieve cross-chain governance and messaging between Ethereum and the BNB chain. A dispute arose between Wormhole and LayerZero, aside from the underlying VC interests. Technically, LayerZero claims that their architecture is more decentralized, allowing Uniswap to have autonomy in controlling messaging between chains, while Wormhole relies on 19 validators, which poses risks of collusion and malicious attacks. The debate is quite fascinating; for more details, refer to ++Review of the Uniswap Proposal Controversy: A Battle of Interests Among Top VCs++.

In addition to the aforementioned technical solutions, there is another direction worth exploring, which is the operating system direction.

An "Operating System" to Simplify Operations

Infrastructure like LayerZero addresses the issue of multi-chain interaction for assets. However, from an operational perspective, user interactions remain cumbersome, requiring a basic understanding of Web3 to engage. Therefore, DappOS proposes a solution to handle cross-chain operations between public chains, DApps, and users in a more convenient manner.

What is DappOS?

According to official sources, DappOS is inspired by mobile device operating systems and aims to become the operating system that aggregates multiple chains for Web3.0. It is positioned for public chain virtualization, helping users manage the operation protocols of numerous dApps. Through SDKs, virtual wallets, and dApps, the integrated platform not only allows developers to achieve one-click multi-chain deployment but also helps users easily access any dApp, making dApps as user-friendly as Web 2.0 apps. The construction philosophy of this protocol is to create a channel between users and crypto infrastructure (such as public chains and cross-chain bridges). Users only need to learn how to use DappOS, and DappOS will handle all the complex operations involved in interacting with crypto infrastructure.

Unlike other infrastructure solutions, DappOS introduces the concept of account abstraction, helping users automate operations and further simplifying cross-chain interactions.

In the DappOS ecosystem, users can create a unified account that can be used across different blockchain networks without needing to understand the details of these networks. DappOS also provides developers with one-click multi-chain deployment through SDKs, virtual wallets, and dApps.

In summary, DappOS helps users more easily use blockchain applications by introducing account abstraction and automation features. DappOS works in conjunction with other cross-chain bridge protocols to provide users with a better experience.

DappOS is also one of the projects selected for the fifth season of the Binance Labs incubation program.

How DappOS Works

DappOS V1 mainly consists of two parts:

• DappOS Account is an implementation of an account abstraction layer that virtualizes and unifies all accounts, allowing users to easily manage virtual wallets while ignoring the complexities of multi-chain experiences. It also includes a feature to recover accidentally deleted mnemonic phrases, enabling users to reset their accounts through other devices or even third-party KYC services.
• DappOS Network is a distributed network that helps users interact using their DappOS accounts. Users can use it to conduct transactions on different chains, bridge assets, and pay fees for using the DappOS network.

The entire process typically includes the following steps:

1. Users create an order by signing it, which includes interactions on one or more blockchains, asset bridging, and fees for using the DappOS network.
2. DApps send the order to the DappOS Network via JSON-RPC.
3. The DappOS Network delegates the order to one of the permissionless nodes, ensuring that the order can be successfully executed; otherwise, the node will compensate the user for any losses.
4. The selected node executes the order and sends the result back to the DappOS Network, which then forwards it to the DApps. If the order executes successfully, the DApps will receive the result and perform the necessary actions. If it fails, the DApps can choose to retry the order or report the error to the user.

The Forward-Looking Nature of DappOS

One of the forward-looking applications of DappOS is to allow users of chains like BNB and Ethereum to directly use applications on other chains through multi-chain connectivity. For example, by connecting a BNB wallet, users can trade on the DEX platform GMX on Avalanche or open positions on the Perpetual platform on Optimism. Understanding this layer opens up immense possibilities.

The concept of DappOS's virtual wallet coincides with the account abstraction concept mentioned in the BNB chain's 2023 technical roadmap. Account abstraction and wallet services can provide users with higher privacy and security in transactions, as there is no longer a need to connect wallets directly, allowing users to seamlessly access Web3 with Web2 usage habits. In addition to enabling wallet social recovery, it also features small transactions, significantly reduced GAS fees, and batch processing of transactions. DappOS will also achieve multi-chain aggregation based on this foundation.

Web3 identity will become a key part of the underlying infrastructure, allowing users to have a smooth experience in using Web3 dApps through identity verification services. This will help expand the Web3 user base by allowing customizable user settings and supporting Web2-style social interactions, thereby lowering the entry barrier for new users.

As Michael Li, Vice President of Data at Coinbase, commented on DappOS, "DappOS creates a universal platform to connect technologies between different blockchains, providing a better experience for developers and users in the Web3 world."

DappOS compensates for some of the shortcomings of current interoperability solutions from a certain perspective. Below, we take the collaboration between DappOS and GMX as an example.

How a Unified Operating System Boosts the Derivatives Sector

BNB Chain: Derivatives are expected to be crucial for the development of the DeFi sector this year.

In 2022, the story of decentralized derivatives began to gain popularity, shifting classic operations from off-chain orders to fully on-chain. Decentralized spot and perpetual exchanges like GMX have stood out remarkably.

Since GMX launched on AVAX in 2022, it has maintained steady and strong growth. It achieved remarkable results in 2022, with its LP token GLP providing stable returns of over 20% in ETH terms. According to data from Defillama and TokenTerminal, its current TVL has reached $662 million, with an average of 2,490 active users over the past 30 days. GLP synthetic assets will play an important role in DeFi, with 28 projects based on GMX Lego covering vaults, lending, social trading, options, and more.

Source: defillama.com

The expansion of the derivatives sector is driven by two fundamental factors: assets and users. How can a large amount of off-chain assets be brought on-chain? Although the overall TVL of DeFi has reached $49.7 billion in locked value, there is still significant room for expansion compared to real-world assets. Bringing real-world assets (RWA) into the DeFi market is an important topic.

From the user perspective, on January 31, DappOS collaborated with GMX to launch a pilot version supported by DappOS. Users can directly access GMX deployed on Avalanche using the BNB OP Polygon network. As shown in the figure below, the BNB network has 1 million daily active users, allowing GMX to capture users from the BNB network without needing to deploy contracts on it. Users can use GMX directly with their BSC wallets.

This is just the initial version of DappOS, which will gradually iterate to allow direct use of virtual wallet accounts, ignoring the existence of chains. By simplifying various operational steps for users, DappOS makes DeFi intuitive, enabling seamless cross-chain access to GMX. A good user experience will further drive GMX's development, allowing GMX developers to focus more on enhancing their product features.

Source: tokenterminal.com

Currently, by staking GLP through DappOS's activity page, users can earn a 3x APY return,++https://gmx.dappos.finance/buy/glp?ref=yudan++.

In addition to GMX, Makerdao, Avalanche, Perpetual, Quickswap, Polygon, USDT, and Optimism have also begun collaborating with DappOS to simplify the difficulty of using dApps.

In the era of multi-chain connectivity, how large is the demand that DappOS can cover?

Cross-chain protocol TVL of $11.5 billion (with an annual growth rate of over 10%)

Total DEX trading volume of $100 billion

Active wallets of 120 million (distributed across multiple chains)

These figures are continually growing, and the number of Dapps based on multi-chain connectivity will increase, with developers becoming more active. Overall, the potential demand for DappOS will be astronomical.

Conclusion

As more and more developers contribute to the development of Web3.0, we can see the entire ecosystem becoming more complete. On one hand, there are solutions like MultiChain and LayerZero addressing asset interoperability; on the other hand, DappOS is solving the user experience and operational difficulties for developers in multi-chain deployment.

However, the infrastructure and applications are still not fully mature and comprehensive, and entering the crypto world still requires a high level of understanding and barriers, making it difficult for many users to easily enter. Therefore, in addition to technological improvements, product optimization and enhancement of user experience have also become very important. As an operating protocol, DappOS will play a significant role in bridging the relationship between DApps and users, bringing hundreds of millions of users into the Web3.0 world and powering the entire ecosystem.

The next popular king-level application may emerge in the multi-chain DEX field. If DappOS can achieve the vision it describes, it will be highly anticipated.