HurricaneSwap: enables CEX transaction experience and empower DeFi applications in the real world

The emergence of DeFi cryptocurrencies has made traditional financial institutions feel threatened. Because in the decentralized environment, users don’t need to worry about malicious attacks or malfunctions as they do in CEXes, there is no threshold or permission requirement to conduct financial activities, which has greatly improved the inclusiveness and efficiency of financial activities, and thus greatly unleashed the asset liquidity.

The advantages mentioned above have boosted DeFi’s fast development over the past year and made DeFi one of the dark horses in the blockchain field. The ever-increasing innovations of blockchain protocols and the record-breaking lock-up volumes of DeFi are the best signpost to this phenomenon. At the same time, such rapid growth of DeFi has also attracted attention or even applications of the society.

Despite these dazzling performances, DeFi only has a short history of 3 years and is still at its infant stage. It is, therefore, no surprise that DeFi has certain problems. For instance, DeFi does not support cross-chain transactions. If investors trade on different chains, such as converting Bitcoin to ETH, they still need to go to CEXs.

Despite the public chains launched by exchanges such as BSC and HECO, which seem to successfully solve the issues of cross-chain transactions, their security still begs a question. Tokens withdrawn from exchanges to these public chains are actually mapped assets, and the real assets are still in the hands of exchanges, which may be a huge hidden danger and cause over-issuance of tokens as long as the cross-chain solutions, lock-up information, and protocols remain undisclosed.

Vitalik, the founder of Ethereum, also raised his concerns on Twitter: “I continue to be worried about the fact that these wrapped BTC bridges are trusted…”, which implies his doubts about the “decentralization” and security mechanism of various wrapped BTC tokens on Ethereum.

To complete cross-chain transactions in a decentralized environment requires an open and transparent solution with sound security, a problem that the blockchain industry has been trying to solve since its birth. The current main solutions are as follows:

• Custody + centralization (such as cross-chain CEXes, WBTC, etc.)
• Custody + POA (Proof of Authority)
• Custody + PoS (Proof of Stake, such as Matic, xDAI)
• Custody +MPC (Multi-Party Computation, such as Thorchain, Anyswap)
• Self-custody (Non-custodial) + MPC（Multichain）

Custodial and centralized methods, however, have certain risks and self-custody should be the research direction.

HurricaneSwap, a decentralized exchange (DEX) based on Avalanche, provides a completely open and transparent cross-chain solution and realizes the interoperability of LP Token and thereby supports multi-chain asset transactions.

HurricaneSwap uses Roke Protocol to achieve the decentralized cross-chain of LP assets. Roke Protocol will form the Verification Node Alliance which is comprised of essential participants in the Avalanche ecosystem, including well-known wallet service providers, asset trust, DEXes, etc. Each of these verification nodes will be in charge of partial private key of the lock-up address to ensure the decentralization of the lock-up protocol. It uses multi-signature to implement the mapping of cross-chain assets, building the mechanism to mint and burn the cross-chain assets.

HumanicanSwap creates a Station on the source chain to lock LP tokens, and sends the locked transaction hash to Avalanche. After verification, it will mint the same number of LP tokens on Avalanche. In this way, the assets contained in LP tokens are transferred to Avalanche as mapped tokens which are then used to establish the liquidity of HurricaneSwap on Avalanche.

Taking the cross-chain of BSC assets as an example. The cross-chain minting process is as follows:

a. User A applies to create a BNB/USDT liquidity pool base on the BNB price on BSC Station, injects the corresponding amount of BNB and USDT and stake LP tokens, then sends a minting request on Avalanche;

b. Once the Verification Node receives the request, it will verify the funds;

c. When the transaction on BSC is completed and confirmed, the verifier will verify whether the corresponding amount of BNB and USDT has been locked;

d. Once the minting request is verified, the Verification Node will confirm the minting request and broadcast it to other nodes;

e. Each Verification Node will independently sign and confirm the minting request. Once the verification node exceeds 2/3 of the total number of nodes, the Alliance will execute the minting request.

f. Mint the corresponding amount of aBNB and aUSD, and create a liquidity pool of aBNB/aUSD.

The transactions involved can be easily searched through a blockchain explorer, and the multi-signature system can guarantee the security of multi-chain assets.

The Roke Protocol of HurricaneSwap can carry out such seamless cross-chain transactions on any blockchain networks; therefore, users can buy any assets on any chains through HurricaneSwap, just like trading at CEXes. What HurricaneSwap currently needs is to attract more liquidity. Avalanche can confirm transactions within one second and handle over 6000 transactions per second, which are already very attractive to users. Enabled by liquidity mining, HurricaneSwap stands a good chance to solve the liquidity and transaction depth problems, so as to provide the best DeFi transaction.

In the future, when companies start issuing cryptocurrencies instead of stocks, HurricaneSwap will serve as their decentralized exchange, thus truly enables DeFi application in the real world.