Decentralized perps suffer from low liquidity . To build the most liquid ETH perp we plan to bridge all yield generating ETH + USD across chains into our 80-20 vault strategy. By doing this, we can unify $50B+ of ETH+USD liquidity into our ETH perp.
Omnichain vaults allow users to deposit yield generating assets from Layer Zero compatible chains into Rage. The architecture of cross chain vaults have a few subtleties:
- Arbitrum (Host Chain): This is the chain the holds all the business logic of the perp and the vaults
- Other Chains (LP Chains): These are chains where LP collateral is held and managed.
Rage uses Layer Zero's cross-chain messaging protocol to pass messages to/from Host Chain and LP Chain. And we use Stargate to bridge USD PnL to/from the vaults. There are two core operations:
When LPs deposit omnichain liquidity the LP Chain (source chain) sends a message to the Host Chain (destination chain) to mint virtual liquidity into the Rage vAMM pool. The opposite happens when LPs withdraw liquidity from the vault.
When the vault needs to rebalance assets, the Host Chain (source chain) must send a message to the LP Chain (destination chain). In addition to the message, the source chain may need to send or receive assets (via Stargate).