🐸What's OMO?

Orders Made OmniChain!

1. Introduction

OMO is a cross-chain aggregation protocol with no liquidity constraints and zero slippage. It is also an innovative and open cross-chain solution. Based on CCTP (Cross-Chain Transfer Protocol), OMO is able to burn native USDC on the source chain and mint the same amount of native USDC on the target chain. For traders, it not only reduces the cross-chain transaction loss to 0, but also breaks through the limitation of liquidity pools. For the protocol, it not only reduces the security risk of cross-chain assets, but also greatly improves the utilization rate of funds. In addition to bridging USDC on different chains, it will also directly aggregate as many DEXs as possible to give users the optimal route, allowing users to have more asset choices on the source chain and the target chain (for example: allowing users to swap $ETH on Ethereum for $ARB on Arbitrum).

2. Background

Most of the current cross-chain bridges and cross-chain relay networks have the following problems:

  1. Liquidity constraints: The effectiveness and viability of cross-chain bridges and cross-chain relay networks depend on the liquidity on the different networks they support. Insufficient liquidity can lead to issues such as transaction delays, failed transactions, excessive slippage, and low transaction volume. Lack of liquidity may limit users' cross-chain experience, affecting asset transfers and interoperability of tokens.

  2. Low capital utilization: The volume of most transactions is small compared to total liquidity, and the capital utilization rate of the liquidity pools they delve in and out of is far too low.

  3. Relay network security risks: Cross-chain bridges and cross-chain relay networks involve asset locks and transfers, making security a very important consideration. If the cross-chain bridge or cross-chain relay network has security vulnerabilities or is attacked, it may lead to asset loss or theft.

3. What is CCTP?

3.1 How CCTP Works:

1. USDC is burnt on the source chain: The user initiates the transfer of USDC from one blockchain to another in the DAPP and specifies the recipient wallet address on the target chain. The App facilitates the burning of the specified amount of USDC on the source chain.

2. Obtain signature proofs from Circle: Circle observes and validates the burning on the source chain. The App requests proof from Circle, who provides authorization to mint the previously specified amount of USDC on the target chain.

3. USDC is minted on the target chain: The App uses the proof to trigger the minting of USDC. The specified amount of USDC is minted on the target chain and sent to the recipient wallet address.

3.2 CCTP Service Framework Diagram

The figure above shows that there are three smart contracts to jointly complete the burning and minting of USDC

  1. TokenMessenger: The entry point for cross-chain USDC transfers. Burns USDC on the source chain and mints USDC on the target chain.

  2. MessageTransmitter: General messaging contract. Sends all messages on the source chain, and receives all messages on the target chain.

  3. TokenMinter: Responsible for minting and burning USDC.

The main advantage of the above system is that there is no need for any user asset liquidity (liquidity is provided by Circle or by a trusted third party). Most cross-chain protocols reward participants for providing liquidity in liquidity pools, and users are incentivized to lock assets on the cross-chain bridge or cross-chain relay network. The utilization rate of these funds is often very low, and if the cross-chain bridge or cross-chain relay network has security vulnerabilities or is attacked, it may lead to the loss or theft of assets.

4. What is OMO's solution?

4.1 Application Layer

Swap: Users can cross-chain swap assets here

Widget & SDK & API: Provide developers with a convenient and standardized way to integrate OMO, simplify the development process, and integrate corresponding cross-chain functions with other decentralized applications.

4.2 Protocol Layer

CCTP: Different chains have deployed contracts that trigger burning and minting on the source and target chains.

Aggregators: Aggregate liquidity pools of DEXs on each chain, provide a variety of tokens for swapping, and find the most efficient and cost-effective routes.

OMO CCTP As A Service: Created by the OMO team, the CCTP technical solution has evolved into a general-purpose service infrastructure, which can support more blockchain networks and asset types more conveniently and quickly, and break the connectivity and interoperability barriers between chains that Circle currently did not.

4.3 Liquidity Layer

AMM Pools: The aggregator integrates the liquidity of various DEXs to help users swap between different assets.

Circle (CCTP): Cross-chain transfers can be performed without pooling USDC liquidity, which improves capital utilization and avoids fees charged by liquidity providers. The exchange ratio is 1:1.

Others: Access to the liquidity of other authorized and trusted third-party institutions in the future.

4.4 Networks

The current model theoretically enables connectivity and interoperability between all EVM networks. With the integration of more trusted third-party institutions in the future, we will support more EVM chains in a short period of time.​

5. How OMO CCTP As A Service works?

OMO has designed the CCTP technical solution as an infrastructure service (OMO CCTP As A Service), which will make it possible to connect networks that are not supported by Circle, and can quickly integrate EVM chains in a short period of time.

5.1 Framework

The framework is outlined in the diagram below:

5.2 Key Features

5.2.1 USDC -> USDC

  • User bridges USDC from source chain

  • OMO Attestation Service requests proof from CCTP and generates OMO proof

  • OMO Relayer verifies the proof

  • After verification, OMO Relayer will trigger CCTP contract to mint USDC on target chain

5.2.2 USDC -> X Token

  • User bridges USDC from source chain

  • OMO Attestation Service requests proof from CCTP and generates OMO proof

  • OMO Relayer verifies the proof

  • After verification, OMO Relayer will trigger CCTP contract to mint USDC and goes through DEXs to swap USDC to X Token on target chain

5.2.3 X Token -> USDC

  • User bridge X Token from source chain

  • OMO contract swaps X Token via DEXs to USDC and triggers CCTP contract to bridge USDC

  • OMO Attestation Service requests proof from CCTP and generates OMO proof

  • OMO Relayer verifies the proof

  • After verification, OMO Relayer will trigger CCTP contract to mint USDC on target chain

5.2.4 X Token -> X Token

  • User bridges X Token from source chain

  • OMO contract swaps X Token via DEXs to USDC and triggers CCTP contract to bridge USDC

  • OMO Attestation Service requests proof from CCTP and generates OMO proof

  • OMO Relayer verifies the proof

  • After verification, OMO Relayer will trigger CCTP contract to mint USDC and go through DEXs to swap USDC to X Token on target chain

  • If the swap fails due to insufficient liquidity on the target chain or any other reasons, USDC will be returned to the user on the target chain

5.3 Transfer From Ethereum To OtherChains

(Lock -> Mint -> Burn -> Mint -> AddLiquidity)

  1. Lock X Token via vault contract, and mint an equal amount of Pegged X Token

  2. Burn Pegged X Token to mint an equal amount of Pegged X Token on the target chain

  3. Add Pegged X Token based liquidity on the corresponding DEXs of the target chain

5.2 Transfer From OtherChains Back To Ethereum

(RemoveLiquidity -> Burn -> Mint -> Burn -> Release)

  1. Remove relevant liquidity

  2. Burn Pegged X Token, mint an equal amount of Pegged X Token on Ethereum

  3. Burn Pegged X Token via vault contract, then release and return an equal amount of X Token

We have yearned for continuous improvement and innovation in the DeFi cross-chain field, and are committed to promoting the development of the cross-chain eco with institutions that offer secure and efficient cross-chain information transmission and liquidity solutions.

6. Reference

7. Risks & Disclaimer

Caution should be exercised when interacting with any smart contract or dApp. While risks are attempted to be mitigated through testing, audits, and bug bounties, there is always a risk of vulnerabilities in smart contract code.

This doc is for general information based on OMO's development. It should not be considered professional financial investment advice and used in the evaluation of making any investment decision.

New updates and changes might not be updated immediately within this doc. The latest product updates and information are subject to the Official Twitter announcement.

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