Introducing Gluon Reactor

“A DApp is a part of the whole – called by us as a ‘universe’, a part which is limited in time and space. The DApp experiences itself – its throughput and transaction speed as something separated from the rest, a kind of optical delusion of it’s own consciousness. This delusion is a kind of prison, restricting it to its own personal functions and interoperability for closely related or partnered ecosystems. Our task must be to free the DApp from this prison by widening its circle of openness to embrace all working DApps and the whole of DeFi universe in its beauty.”

― Albert Einstein, on Gluon Reactor

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FAQs

I’m Shanky, one of the Core Architects of Gluon. Considering the imminent release of our new protocol, Gluon Reactor, I’d like to take some time to outline what we’re bringing to the ecosystem. The following guide will let you know where we have come from and why we have engineered Gluon Reactor the way we have, exactly what we’re releasing, and how we envision Gluon Reactor improving on the emergent DeFi market – thus ushering in a whole new era of DeFi, which we like to call #UniversalFinance.

Current iteration and the history of Gluon

The current iteration of Gluon was revolutionary and required a lot of wrinkle-brained out-of-box thinking to achieve. The core team of developers managed to overcome the flaws that were inherent in the Plasma model of Layer 2 scaling solutions, and develop a product in Gluon that underpinned the high-speed, low-latency, derivatives DEX, Leverj.io.

The significance of this feat should not be brushed aside. After much initial excitement for Plasma technology in 2017, the flaws – deemed to be too flagrant to pursue further development, meant much of the Ethereum developer community gave up on Plasma in favour of Rollups. Undiscouraged, the Gluon Dev team strode on to produce a remarkable end-product which focused on delivering outcomes, not adhering to group think. So, I know what you’re thinking. Everyone realises Gluon makes the most sense for Layer 2 scaling, adopts it and the Dev team enters early retirement in the Caribbean while pushing minor updates every couple of months right?

Well, unfortunately, it didn’t quite turn out that way. Despite having a killer product, Gluon V1 failed to gain much traction as much of the mindshare for Layer 2 scaling was thoroughly sponged up by the various flavours of Rollups. It seemed Gluon – which was a blend of Plasma and Roll Ups, had failed to catch the imagination of users and developers had sadly missed the proverbial boat. As the industry tried to solve the Layer 2 scalability challenge and adopted many different solutions, one of the unintended outcomes being even more fragmentation of asset pools. User’s found they suddenly had bags across different base chains, Dapps and Layer 2’s causing a major UX snafu for the end-user.

Alas! All was not lost, as many valuable lessons were garnered from this period of time. Our Dev team spotted a new opportunity for Gluon to thrive in the increasingly splintered DeFi ecosystem. In fact we are so passionate about it we have coined an aspirational name for this – UniversalFinance – a system for unifying all your bags to co-mingle in the Defi Universe…total unity of chains, layer 2s and DeFi.

Improvements

The challenges that the team at Gluon sought to overcome and solve within the DeFi ecosystem as a whole were as follows:

  • Self Custodial: In the spirit of true DeFi, allowing users to control their own keys and never allowing the protocol itself to have access to user funds is at the core of the protocol.
  • Decentralization: Allowing the network to function without a single bottleneck of authority while maintaining robust security.
  • Interoperability: Allowing all of your ASSETS to participate in DeFi apps, regardless of the base chain they are native to, or in which ecosystem the Dapp is created. Allowing individual DeFi apps to converge in one place without users switching between protocols and chains.
  • Non-custodial: Bridges between chains have been predominantly custodial and operated by a single entity – that is far from ideal.
  • UX: A low-barrier to entry interface which allows complete beginners and grizzled DeFi veterans alike to interact with the protocol and have access to the entire DeFi ecosystem without cumbersome onboarding.
  • Speed: The ability to interact between different blockchains within one interface instantly.
  • Liquidity: Sophisticated multi-chain pooling enables liquidity to be provided via various chains/networks thus vastly improving upon previous models by attracting huge volumes.
  • Costs: Working within one ecosystem that connects the entire DeFi ecosystem brings down costs incurred by users who have to regularly chain-hop.
  • Consolidate Dapps: Industry being hyper fragmented, be it in different Dapps (Uni, Sushi, Balancer, Compound), different chains (BSC, ETH, Solana, Bitcoin), or even within Scaling solutions (Starkware, Polygon, Aribitrum, Loopring).
  • Incentives: fragmentation of liquidity pools leads to lower yields.
  • Developer skills: Niche issues require specialised skills to solve the myriad of complexities in the emergent field of blockchain tech and finance.

Choice of Methodology

Mapping out the current trajectory of DeFi, there was only one logical solution – unifying DeFi into a collective whole – solving the issues above and taking the ecosystem forward.

Ethereum, the pioneering chain of DeFi, was a victim to its own success, and simply due to the congestion on the network and often excessive transaction fees. Competitors such as Binance Smart Chain and Solana have emerged and captured a significant portion of the TVL as well as human capital. Subsequently new projects have to think carefully about which chain to launch on in order to maximize its profitability and adoption.

While competition is always a good thing, it has led to the siloing of chains. Users experience high levels of difficulty in migrating between chains and pockets of wealth can be left stranded when Gas prices are high. Such flaws lead to missed opportunities and a whole slew of other frustrations experienced by not only the protocols but the users as well.

Unlike pre-existing cross-chains that use bridges to port siloed blockchains to one another, Gluon Reactor uses gateways that are built into the underlying architecture. Bridges stand outside the connected systems and are susceptible to exploits or downed networks and require regular maintenance and up-keep. Building gateways into the existing architecture is not only a more elegant way to enable inter-functionality, the base security inherent in the Ethereum blockchain is untainted. It also supports scale. Gateways are typically built in a 1:1 manner, where as gateways support any coin on a chain transmuting to the another chain.

THE SOLUTION

The future of finance has the potential to be decentralized, fair and equal, but, we’re only part way there. Every project, big or small – is doing its part in working toward the future of finance, but in doing so the ecosystem has become fragmented. To avoid remaining on the fringe of the economy, much is to be done to synergize efforts across the Crypto landscape and embrace a hive mentality. Only in a coherent and cohesive environment will the razor’s edge of development soften enough to enable ease of onboarding for the masses.…

Gluon Reactor Diagram

Gluon Reactor seeks to solve these issues experienced in DeFi, by uniting the plethora of DeFi blockchains together thus becoming the rails of DeFi. Akin to higher level systems like oAuth, which has greatly enhanced the user experience of webapps, Gluon Reactor will become the rails for a universal DeFi ecosystem.

This means that not only will traditionally pro-DeFi blockchains like BSC and Ethereum along with their native Dapps be able to seamlessly interact with each other, but other somewhat DeFi-ostracized blockchains such as the Bitcoin blockchain, and its subsequent forks will have secure access to decentralized finance without the need for wrapping. We believe this could totally shift the current trajectory of DeFi, by adopting a more inclusive approach. Would this mean the end of Maxi-Wars? Probably not, but for those who are pragmatic, have assets on multiple chains, Gluon Reactor represents a step change toward bringing unity.

On the development side the team has been collaborating to incorporate pre-existing technologies with more newly-fangled innovations. Sometimes it is unnecessary to reinvent the wheel, and certain methodologies have been battle-tested and emerged as industry standards, such as using ETH as a base token and the Ethereum base chain for security. Other more emergent creations which enable Gluon V2 to cut through pain points and bottlenecks apparent in each isolated protocol across the industry have been innovated in accordance with the perceived challenges noted above.

Giving the choice back to end-users

Ultimately, our goal is to bring choice back to the end-user and allow flexibility. No longer do DeFi aficionados need to decide between chains, or be encumbered by high gas fees for trying to capitalize on arbitrage opportunities. The entire DeFi ecosystem can be accessed through one user-friendly application.

Besides removing friction inherent in the current DeFi landscape, an added advantage to Gluon Reactor’s development will be increased mainstream adoption by potential users who were previously turned off by high barriers to entry, in turn, the market grows as a whole, and as the saying goes a rising tide lifts all ships.

Stay tuned for important updates on the road to unifying the DeFi universe.

GLUON REACTOR FAQ

Gluon Reactor is a pathway that brings together L1s and L2s. It is the next step in the evolution of Blockchains that aims to function as an overarching cross-chain highway that seamlessly unifies the fragmented chains and pockets of liquidity across the DeFi ecosystem.

Reactor offers a high-speed, low-cost, permissionless and frictionless environment for DeFi users to interact with the myriad of available blockchains, DApps and Assets in one simple, user-friendly environment. We aim to allow you to easily swap assets between chains. It will make custodial bridges and wrapped tokens obsolete and greatly increase the network effects of assets in any DeFi ecosystem.

Ultimately, the goal is to bring choice back to the end-user and allow them Universal access to DeFi.

  • For a wrapped token, like WBTC, the process consists of: a protocol takes an asset, stores it safely, and then mints a corresponding asset such as WBTC.
    Here we are relying on the protocol to ensure the fidelity of the product. In this method, it runs chain by chain. For example, WBTC runs on Ethereum.
    If we want the same thing to run on BSC, they too need to undertake the same custody, storage, and minting actions. To change back, you need to burn the minted asset and you can get back your original asset.
  • A bridge provides a connection that allows the transfer of tokens or data, from one blockchain to another, it is bespoke and customized – a point to point contact between two chains. It’s specific from one chain to another, in the number of assets it can support and specific in the input/output capabilities, only certain assets can get through – it is highly customized and therefore extremely limited in its ability to scale.  It is also subject to a certain amount of custodial risk as Bridges are normally controlled by a single party.
  • A Gateway is connected at an inter-network level. This means that no matter what blockchain you are on or which assets you have, you can transfer it seamlessly and repeatedly to other blockchains. Tokens are no longer pegged or wrapped, they are “unified”, which make them available across all blockchains.
    • There’s no permission state on Gluon. When an asset passes through the gateway, you will get a synthetic in that chains native standard. You don’t need a new address or key pair.
    • There’s no predetermination – the gateway doesn’t need to know about any one token per se, instead, it is built to deal with token standards – BEP 20, ERC 20, etc. It is like converting a .doc to a .pdf, it doesn’t matter what kind of doc you are using, it’s agnostic and the content is still the same. Input is whatever type of file – output is a pdf. 
    • Gluon is also more efficient – transactions and overhead costs are kept as low as possible. Gateways are highly automated which allows for lower transaction costs.

And finally, speed. A lot of wrapping or bridging goes through a primary chain. Let’s say you want to move DAI from Ethereum to BSC and then decide to move it to Polygon. You can’t move it directly between BSC and Polygon, instead, you would have to move it from BSC back to Ethereum using that bridge, and then use a second bridge from Ethereum to Polygon. The reason is that bridges are built from the source. This is inefficient and incurs additional costs as you have more transactions and fees.

Once a token is on one chain it is as secure as any asset in that underlying chain. Whatever chain it is sitting on.

When passing through the gateway, a TSS scheme is governed by the Gluon validators or signers. These validators witness an asset being deposited. The native asset is then locked in a smart contract while on the other side of the gateway the same number of synthetic assets is created – we call these U tokens or universal tokens. These are created in that chain’s native standard and able to be traded or farmed on that chain’s Dapps. When the asset arrives back at its native chain, the portion (whole or partial) is unlocked and then can be traded.

For example – if I want to send 10 ETH to the BSC chain. These 10 would be locked on Ethereum while 10 uETH would be minted on BSC. If I traded badly on BSC and lost 2 uETH worth, and then repatriated them back to Ethereum via its gateway to invest them in another opportunity, 8 ETH would be unlocked for me.

Taking this further – the remaining 2 uETH – say 1 of these were burned in someone’s farmonomics, the account holding the last 1 uETH could then move them to Ethereum via the gateway and unlock that ETH. The burned uETH would be perpetually locked as it is now gone.

We also recognise that you will want to know more about the role of $L2 in this new ecosystem. There will be a Governance function within the Gluon Reactor Network, so rest assured that $L2 does play a role. However, we want to be clear that the exact Tokenomics are still a work in progress

Having said that, at this stage we believe that $L2 tokens will play a similar role to that of REN tokens in the Ren Network. Therefore we plan for $L2 to be used as collateral for validators and apps on this new network or be used for voting on these apps.

With Gluon Reactor you can build and use the current apps and add more, the $L2 token holders will benefit from it not only from the accrued value derived from the utility but also for those staking, as small fees, incurred by interacting with the network, will be aggregated in the staking pool.

As we said, the final tokenomics are still being worked through, although we don’t foresee a need to increase supply.

The funds are actually held using Threshold Signature Scheme (TTS). The testnet nodes collectively control the access to the funds. Unlike Thor, whose funds are not separate, cash is controlled by a single node. Here everything is controlled by the nodes. It is fast and safer as there is no risk of one node with its personal basket taking the network hostage or anything like that.

The way the nodes are selected is completely decentralized. The nodes have to stake a predetermined amount of assets to act as a bond and the network picks the participants from that smart contract.

That’s the beauty of our system – we use the same keys and wallet address so that you can interact with each protocol as if the assets were native to that protocol.

In that sense, keeping track of your assets takes no extra getting used to. If you are looking at a holistic interface to track your portfolio, something like Zapperfi is a good option and will display all transactions taking place over any network you choose to interact with.

Both, you could choose to have one address or many depending on your demands. Just as you could when interacting with any single chain.

Yes, we will launch equipped with interoperability between Fantom Network, BSC and Ethereum. Eventually, Polygon, Bitcoin and its myriad of long-lost cousins will be added. We plan to continue building partnerships with blockchains across the industry to unify the ecosystem.

Indeed it does. Bridging maintenance is costly and susceptible to exploits from either side of the bridge. Our system architecture removes the need for bridges and networks to be ported innately. Much infrastructure cost as well as time-saving is achieved from this elegant architecture.

Nothing has been finalized as of yet, but we want to keep fees to a minimum. It is currently quite costly to send assets cross-chain, but we aim for it to cost no more than a simple asset swap on a protocol like Uniswap or Sushiswap.

There are already sufficiently well-established AMMs across all chains in the industry. It makes no sense for us to compete with such stalwarts, so we don’t plan on attracting liquidity by building our own AMM. Instead, we have concentrated our efforts on developing a product where participants can freely move their liquidity wherever they deem fit.

We unlock liquidity as opposed to attracting liquidity.

Let me give you an example. Currently, less than 1% of total BTC is in WBTC. Despite being a great innovation – wrapping is costly and because it uses bridging, and leaves the BTC somewhat susceptible to security vulnerabilities, which is probably why a relatively small amount of BTC has been wrapped – compared to ETH for example. Our network will enable BTC holders to interact in DeFi natively – without wrapping their tokens. Think about that for a second – the amount of liquidity unlocked by allowing BTC to interact in DeFi. Imagine the hoards of fanatic DOGE holders who will be looking to put their DOGES to work and earn yield. The use case is clear, and we are here to unlock the whole next wave of innovation in DeFi.

Yes, that is correct. We want the user experience to be as familiar as possible.

Security will be equivalent to that of the underlying chain. If you are interacting on Ethereum, then you will have Ethereum’s security privilege and the same goes for every chain.

Gluon Reactor’s ability to port to different networks lies in gateways that are innate to the system architecture. It is not a point to point connection akin to that in a network bridge.

It is more like being inside a house, where the red door at the end of the hallway always leads to the kitchen. In other words, you don’t have to walk across a bridge to get to the kitchen with the Gluon Network.

Agreed. We are in talks with Polygon and hopefully, they will be added to the network sooner rather than later.

Register for updates

We are specifically looking for submissions for improvement of Gluon core code base, migration to the chain, and interoperability. If you have a novel idea on how to improve or utilise Gluon please fill out our submission form, on the developers page.