Understanding PicWe on Movement: Building the Optimal Full-Chain Liquidity Infrastructure

The native characteristics of chains are leading to excessive fragmentation, disconnection, and severe imbalance in the liquidity of the on-chain world. Statistics show that approximately 80% to 90% of liquidity is currently locked in EVM applications, which poses challenges for the establishment and development of emerging ecosystems, stifling innovation in Web3. Many emerging ecosystems are forced into a continuous liquidity competition due to the lack of good multi-chain interoperability solutions.

An obvious example is that every time a new Layer 2 and its related ecological applications anticipate airdrops and wealth effects, they can attract the attention of users in the circle, but the cost and threshold of entering a new public chain deter most users. These users mostly come from mature ecosystems like Ethereum and BNB Chain, but the high costs and barriers of traditional cross-chain bridges hinder most users from participating. In the post-DeFi era, the industry has been exploring how to achieve efficient, secure, and low-cost asset flow across multiple chains while providing users with a seamless experience.

The PicWe project is one of many explorers. This project is based on a series of technical solutions including the Omni-Chain Permissionless Bidding Orchestration Protocol (OPBOP), Dynamic Liquidity Matrix (DLM), and Programmable Token Transfer, and has taken the lead in launching the industry's first cross-chain trading model characterized by a bridge-less and trustless transaction mode (CATM) on Movement, aiming to create the next generation of full-chain liquidity infrastructure.

As an innovator in the cross-chain field, PicWe's solution has received widespread recognition in the market. It is reported that the project stood out among 2,100 participating projects at the "Battle of Olympus" hackathon held by Movement Labs, winning first prize in the DeFi track. At the same time, PicWe has shown remarkable growth momentum over the past three months. Since its launch, the project has attracted 727,000 users, processed 221,000 interactions from 163,000 unique addresses, and achieved a total transaction volume of up to $326 million.

As an outstanding representative of cross-chain solutions in the Movement ecosystem, PicWe has not only solidified its leading position within the Movement ecosystem but is also rapidly emerging as one of the optimal full-chain liquidity infrastructures.

How does PicWe achieve bridge-less cross-chain interaction?

In traditional cross-chain trading, cross-chain bridges usually play a significant intermediary role, typically helping traders achieve asset transfers across different chains through a series of methods such as locking and wrapping. Although traditional cross-chain bridges have made significant contributions to liquidity interaction in the early on-chain world, their drawbacks are also very evident.

In fact, a cross-chain transaction based on a cross-chain bridge usually involves a series of operations such as locking, minting, and redeeming, with each step typically requiring the user to pay a gas fee. Therefore, a single cross-chain transaction not only incurs relatively high friction costs for users but also adds many cumbersome transaction steps and higher transaction delays. Of course, traditional cross-chain bridges even exacerbate liquidity fragmentation, as some cross-chain solutions choose to have assets exist in the form of independent wrapped tokens on different chains, such as WBTC, which reduces the overall liquidity and availability of assets.

A more concerning issue is security. Many cross-chain bridges rely on centralized or semi-centralized custodians to ensure the safety of assets locked on the source chain, leading to extremely high single-point risks. Even with the introduction of some PoS validator groups, as liquidity on a single chain decreases, the cost of attacks can significantly drop, thereby increasing the risk of being targeted by malicious actors. In fact, a series of security incidents triggered by early explorations of interoperability are numerous, causing controversy and leading many to lose confidence.

Previously, Arjun Bhuptani, the founder of Connext, proposed the concept of the "interoperability trilemma," pointing out that it is challenging to simultaneously satisfy the following three characteristics when achieving interoperability between blockchains: universality (the ability to transfer any data between two chains), scalability (the ability to quickly deploy on heterogeneous chains), and trustlessness (minimizing trust assumptions).

It is evident that cross-chain bridges indeed play a very important role in the development of the industry, but they are merely a stopgap measure and certainly not the final state of cross-chain solutions.

Figure: The Cross-Chain Impossibility Triangle

For PicWe, instead of continuing to innovate based on the original cross-chain bridge concept, it has built a decentralized cross-chain interaction system that does not require intermediaries by introducing a series of solutions such as state channels and liquidity incentives. Users only need to verify on the source chain to achieve cross-chain transactions of assets across multiple chains.

Chain Abstract Transaction Model (CATM)

The PicWe cross-chain trading system is primarily driven by the Chain Abstract Transaction Model (CATM), which deploys contracts across multiple chains responsible for updating and coordinating transaction states. By constructing a unique Omni-Chain Permissionless Bidding Orchestration Protocol, it can serve different pairs of chains at any time.

In fact, the cross-chain liquidity of traditional cross-chain bridges mainly relies on locking sufficient assets on both the source and target chains to ensure counterparty security at both ends of the chain. When the asset reserves on the target chain are insufficient, cross-chain transactions become inefficient or even impossible. However, PicWe's CATM model does not rely on locking or minting assets to ensure liquidity; instead, it builds an incentivized LP system to "seek outward."

Specifically, the contracts deployed by PicWe, whether on the source chain or the target chain, can be understood as a full-chain liquidity pool, provided by LP roles to offer liquidity and incentives.

When users with cross-chain trading needs deposit assets into the source chain contract, it is similar to injecting assets into the liquidity pool of the source chain. They select the corresponding target chain, fill in the address, and complete the multi-chain payment request through a single-chain signature to generate an order via the Omni-Chain Permissionless Bidding Orchestration Protocol. After the contract records the user's assets, distributed relayers will be responsible for securely transmitting the user's transaction status from the source chain to the target chain, including information such as transaction date, ledger, and order details, achieving the transfer of state and data.

For the target chain contract, after verifying the validity of the source chain contract's signature and checking whether the source chain transaction meets the required number of block confirmations (delayed confirmations to prevent double spending, oracle manipulation, flash loan risks, etc.), the target chain contract pool will ultimately release assets to the user-specified address.

Most importantly, the CATM system continuously possesses the ability for liquidity rebalancing.

In the past, LP users could earn farming incentives by providing liquidity to contract pools on different chains to ensure that the contract pools or liquidity pools on different chains remain sufficiently liquid and dynamic.

When liquidity on the target chain is insufficient, PicWe seeks more assets from LPs or other liquidity providers through a Dutch auction mechanism, characterized by initially setting a price for a certain asset and continuously lowering the token price as liquidity becomes more abundant (the incentive effect decreases). For LPs, the liquidity difference represents an arbitrage opportunity; the greater the difference, the larger the arbitrage opportunity. Therefore, a Dutch auction transaction will instantly attract a large number of LP arbitrageurs to participate, ensuring that the target chain contract pool quickly restores liquidity while also ensuring the optimal cost of liquidity replenishment.

Based on this system, if a certain chain has insufficient liquidity, PicWe will also transfer assets from other chains to the liquidity-deficient chain through the aforementioned Rebalance mechanism to ensure sufficient and balanced liquidity across different chains.

Thanks to PicWe's cross-chain liquidity capabilities and the liquidity differences between different chains, liquidity providers can earn returns simultaneously on multiple chains, breaking through the limitations of single-chain liquidity pools. Similarly, investors can optimize returns by aggregating liquidity earnings from all supported chains.

Thus, we see that in the above process, PicWe's solution does not involve the native minting and redemption of tokens, nor does it require the custody of users' assets. PicWe itself directly transmits native asset information from the source chain to the target chain based on programmable token transfer technology, maintaining the integrity of assets in their native state and liquidity on both the source and target chains, maximizing the optimization of cross-chain efficiency and ensuring the entire process is completely decentralized.

"More, Faster, Better, Cheaper" Bridge-less Solution

Based on the aforementioned technical characteristics, PicWe's bridge-less solution is demonstrating advantages of "more, faster, better, cheaper."

More

Traditional cross-chain solutions are limited by the types of tokens provided by liquidity pools and cannot support cross-chain purchases of mid- to long-tail assets. For example, it is difficult to directly use USDT on the Base chain to buy PNUT assets on the Solana chain.

This is akin to shopping in a supermarket or warehouse, where users can only purchase specified goods (tokens) provided by suppliers (LPs). Due to the capital costs of holding inventory, the types of goods available in supermarkets and warehouses are limited. To purchase any goods, one can only do so through online P2P methods.

PicWe's Omni-Chain Permissionless Bidding Orchestration Protocol (OPBOP) is creating a decentralized "online mall" that allows users to buy any token on any chain, meaning that through PicWe, users can use USDT from any chain to purchase any asset on any chain.

Faster

Traditional cross-chain solutions require users to first convert assets on the source chain (such as USDT) into assets accepted by the cross-chain bridge (such as ETH) before proceeding with the cross-chain transaction. After the cross-chain is completed, they still need to convert the assets into the desired assets (for example, converting ETH into PEPE). The entire trading process involves too many steps and long chains, resulting in a poor user experience.

Through PicWe, the process of purchasing full-chain assets can be completed in one step on-chain, without the need for cross-chain swaps. Both EVM chains and heterogeneous chains can complete transactions within one minute.

Better

PicWe's bridge-less solution breaks the constraints of the cross-chain impossibility triangle. It achieves on-chain interaction of full-chain assets in a completely decentralized manner, avoiding the risks associated with past cross-chain protocols that could use and transfer user assets. This bridge-less solution "never touches" user assets, preventing both malicious actions by project parties and hacker attacks.

Cheaper

The bridge-less solution can save on cross-chain bridge fees, swap fees, and gas fees. The currently popular intent trading and chain abstraction solutions merely replace users in completing complex cross-chain operations, and the multiple swap, cross-chain, gas, and other fees incurred still need to be borne by users. Through PicWe, users essentially pay USDT and directly purchase tokens on the target chain, saving all intermediary fees, with each transaction cost controlled within 1 USDT.

Currently, PicWe has taken the lead in practicing this solution on the Movement stack, supporting users to seamlessly trade assets on any blockchain based on the Movement network, such as traders using USDT on the Movement network to purchase any tokens on other chains, including BTC on the Bitcoin blockchain.

PicWe's Capital Efficiency

Through the unique Dynamic Liquidity Matrix (DLM) technology, PicWe has a significantly advantageous capital efficiency in cross-chain transactions compared to traditional cross-chain solutions. The LP pools provided by PicWe are no longer traditional single trading pair pools; their USDT pool continuously provides liquidity for different trading pairs. Moreover, it is provided on demand; only when users submit a request for trading a certain token does the pool's USDT provide corresponding token liquidity, greatly enhancing the returns of the LP pool.

In the above image, the left side shows a traditional liquidity solution, while the right side shows PicWe's solution.

In the example of the traditional liquidity solution, the total liquidity is $18B, but this liquidity is dispersed across different chains and bridges. Each chain (such as Chain A, Chain B, Chain C, Chain D) has $4B in liquidity, and the bridges (such as Bridge AB and Bridge CD) hold $1B in liquidity each. Each chain has multiple assets (Token1, Token2, Token3, Token4), with each asset having $1B in liquidity.

We can intuitively see that the liquidity of traditional cross-chain bridge solutions is extremely fragmented, and the liquidity between chains and bridges cannot interoperate, leading to low capital utilization. When the liquidity on a single chain or bridge is insufficient to meet large transaction demands, it easily causes price slippage, and the assets on each chain are independent of each other, making it difficult to integrate and utilize.

In contrast, in PicWe's solution, the Dynamic Liquidity Matrix abstracts the chains and integrates the dispersed $18B liquidity into a single pool that can be called across chains. The assets (Token1, Token2, Token3, Token4) on each chain achieve interconnectivity through the PicWe system. Once liquidity is unified, users on each chain can share the overall liquidity, avoiding transaction failures or high slippage caused by insufficient on-chain assets.

At the same time, based on the CATM trading system and the Dynamic Liquidity Matrix, PicWe does not need to inject ineffective liquidity for each chain, significantly optimizing capital allocation while allowing liquidity providers to earn up to 30% APY through PicWe's protocol. Currently, the LP returns offered by mainstream DEXs usually do not exceed 10%, and due to the long-term abundance of liquidity, there are not many substantial LP arbitrage opportunities.

PicWe's earnings stem from liquidity differences, and the liquidity gaps between different assets and chains are likely to persist long-term, which means PicWe will consistently provide substantial arbitrage returns for LP users, ensuring the efficiency of the cross-chain system while meeting the needs of multiple roles.

B2B2C

From the perspective of C-end users, PicWe can be a good tool for asset cross-chain, cross-chain trading, and yield generation, but PicWe is not just To C; it aims to pursue a B2B2C route.

In fact, PicWe is not merely defined as a tool but more as an underlying cross-chain liquidity facility. It opens up SDKs to allow all on-chain applications to integrate with it and gain the capability for full-chain expansion through its technical solutions.

For example, a DEX can integrate with PicWe based on PicWe's SDK, enabling the DEX to further provide users with cross-chain trading capabilities and even offer some innovative trading products and derivatives, enhancing platform functionality and capturing users through higher potential returns. For PicWe, by becoming an underlying facility and serving B-end applications, it can indirectly bring the users of these collaborators into the ecosystem and accelerate the large-scale adoption of its solutions.

Conclusion

PicWe is reshaping the cross-chain interoperability system, creating a new solution driven by the CATM-powered cross-chain architecture. Its bridge-less architecture not only minimizes liquidity fragmentation but also enhances security and significantly reduces the costs of cross-chain interoperability. At the same time, leveraging the OLBC model, PicWe provides a robust mechanism to maintain network stability and incentivize liquidity contributors.

As a brand new cross-chain interoperability system, PicWe not only breaks through the "interoperability trilemma" but also provides a scalable alternative to traditional cross-chain bridges. Additionally, through new expansion and combination methods, it redefines the paradigm of cross-chain interoperability, providing a new foundation for the on-chain world to move from fragmentation to unity.

About PicWe

PicWe relies on a series of technical solutions, including the Omni-Chain Permissionless Bidding Orchestration Protocol (OPBOP), Dynamic Liquidity Matrix (DLM), and Programmable Token Transfer, to launch the industry's first cross-chain trading model characterized by a bridge-less and trustless transaction mode (CATM) on the Movement platform. This initiative aims to build the next generation of full-chain liquidity infrastructure.

By constructing this full-chain liquidity infrastructure, PicWe hopes to drive innovation in decentralized finance and bring infinite possibilities to the B2B2C market.

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