Insights from the Journey of Composable Foundation, Picasso, and Mantis

The State of the Industry

The industry has seen multiple cycles and iterations, and we have come a long way since Satoshi’s vision was etched into a whitepaper after the fallout from the 2008 financial crisis, born from the cypherpunk era of the internet.

We built this industry from scratch, block by block. Now, we have TradFi investing, Fortune 500 companies holding BTC on their balance sheets, and presidential candidates debating their crypto policies for electoral votes. The original values and principles of full decentralization and financial sovereignty seem like only whispers, lost in the wind, to a time that does not presently exist, and drowned out by the loud noise of an on-chain, attention-economy-based, casino.

Nevertheless, despite all the changes and evolutions of the industry, the original ideals live on, forever eternal and immutable. They are still a North Star, a reason for being here, and a reason for continuing to build. We, the builders, still wrestle with solutions to familiar problems:

• User Experience

• Interoperability

• The Blockchain Trilemma

We whisper, ‘I’m in it for the tech,’ to bright screens, in dimly lit rooms, at late hours of the night, as we unironically try to figure out how we ‘muh onboard the next billion’ users to this great anarcho-capitalist arena.

In this way, a key challenge in this evolving landscape has always been the blockchain trilemma, which posits that decentralized networks can only achieve two out of three desired properties:

• Decentralization

• Security

• Scalability

Traditional blockchain networks like Ethereum have struggled to achieve all three simultaneously, often sacrificing scalability for security and decentralization. This has resulted in high transaction fees and slower processing times, creating a barrier for broader adoption and efficient use of the technology.

DeFi experienced rapid growth the previous cycle and has now somewhat stalled. 2019 transformed what was possible on-chain, creating decentralized platforms and new financial primitives. It was a Cambrian explosion of innovation and experimentation. The next frontier isn’t on chain like last time - it’s cross-chain. The DeFi Renaissance will be made possible by a new intent-based user experience combined with chain abstraction.

That early success led to increased fragmentation of liquidity and assets, revealing the limitations of traditional Ethereum’s first-generation Layer 1 network. Since 2021, there has been a significant migration toward scalable alternatives. This includes Layer 2 rollups that bundle transactions off-chain for settlement on the Ethereum mainnet, as well as high-performance Layer 1 solutions like Solana that offer quicker finality and lower costs within a single-layer architecture.

Blockspace, the limited capacity for transactions within a given block on a blockchain, is a crucial resource in each ecosystem/chain. The high demand for blockspace on Ethereum has driven up transaction costs, making it expensive for users to participate in DeFi activities. This economic pressure has spurred innovation, pushing the industry towards scalable solutions that can provide more efficient use of blockspace and reduce costs.

How the Industry Has Changed: Emergence of a Fragmented Blockchain Ecosystem

We have recently seen a growing interest in modular blockchain architectures that decompose the traditional monolithic blockchain structure into specialized modules. This includes consensus, data availability, execution, and settlement, to name a few. Each module focuses on a specific function for optimization and scalability enhancements tailored to each layer. This modular approach enhances overall efficiency and flexibility but also introduces challenges like potential centralization in the data abstraction layer.

Performance-oriented chains like Solana combined with the shift towards modular architectures aim to address scalability from different technical approaches. Solana optimizes within a single-layer system to achieve high throughput, whereas modular blockchains distribute functionalities across multiple layers or chains. This diversity in solutions contributes to a competitive, fragmented ecosystem as protocols vie for capital efficiency and blockspace. As the industry scales, there is a pressing need for easy cross-chain transactions that uphold the core DeFi principles of composability. This is critical to enabling secure and efficient value transfer across an increasingly diverse and modular blockchain landscape.Full interoperability and chain abstraction have always been the Holy Grail. It has always been the mission for us at Composable Finance.

Framing Application, Processing, and Settlement in DeFi

Understanding the critical components of application, processing, and settlement are essential to the modern DeFi space. These components are fundamental to the operation of decentralized systems and play a crucial role in ensuring that transactions are executed efficiently, securely, and in a user-friendly manner.

Effective application, processing, and settlement mechanisms are key to achieving true interoperability in a fragmented multi-chain and multi-layer ecosystem.Best execution is the goal. It can be optimized by building the full stack.

Application Layer

The application layer refers to the various Dapps that facilitate trading, lending, and other on chain financial services. These applications are the interfaces through which users interact with the blockchain. The challenge lies in ensuring these applications can function seamlessly across different blockchain networks, maintaining a user-friendly experience while handling the complexities of cross-chain interactions. User experience has always been clunky and messy.

Processing Layer

The Processing layer or execution layer, is responsible for the execution of smart contract logic and forms the backbone of decentralized applications. Users submit transactions and the layer verifies their authenticity and updates the blockchain state accordingly. The layer is essential to the whole ecosystem in the way that it also houses order matching, trade execution mechanisms, and the consensus algorithms needed to ensure network-wide agreement on the state.

Settlement Layer

Settlement refers to the finalization of transactions. It ensures that the agreed-upon exchange of assets is completed correctly and securely. This layer is crucial for maintaining trust and reliability in the DeFi ecosystem by ensuring that transactions are irreversible and correctly recorded on the blockchain.

The Story of Composable Foundation

Composable has come a long way since it was first announced more than three years ago. However, its number one goal has always been to support DeFi users by improving the cross-chain DeFi space. We have evolved in lockstep with the industry in order to best deliver upon this mission.

Early Development in Dotsama

We began our journey in the Dotsama ecosystem. Gavin Wood described it as “layer zero”  that connects various blockchains (termed parachains) to its main Relay Chain. At this time  cross-chain message passing (XCMP) had not been fully developed. This created a strong need for an interim solution for cross-chain asset movement. We started building the new infrastructure and developer tooling needed to bridge this technology gap in interoperability.

Expansion to Cosmos

Building on our success in Dotsama, we expanded into the Cosmos network. This move allowed us to leverage the Cosmos SDK and IBC (Inter-Blockchain Communication) protocol, further enhancing our capabilities and expanding our reach across multiple blockchain ecosystems.

Pioneering IBC

We then pioneered the development and implementation of IBC to facilitate secure, censorship-resistant, and permissionless cross-chain communication. Our efforts have connected more ecosystems than ever before and broken new ground in blockchain interoperability.

We were the first team to extend IBC connections beyond the Cosmos network, successfully linking Ethereum and Solana via IBC. This groundbreaking achievement marked a significant milestone in cross-chain technology.

We introduced the concept of “IBC Everywhere” in February of 2023 through our Centauri project. We have since championed this initiative as a beacon of decentralization, tirelessly advocating for a truly interconnected blockchain ecosystem.

Picasso Network

We introduced the Picasso Network as part of our quest to enhance cross-chain interoperability. Picasso L1 Protocol enables secure asset transfers and Multi-Asset Restaking through cross-chain IBC.

Our novel concept of utilizing the most battle-tested asset transfer protocol, IBC, to power the Multi-Asset Restaking Hub, and utilizing the Restaking Hub to enable new IBC connections (new bridges to new ecosystems), bring Defi to a new composable state.Economic security can be drawn from all ecosystems and assets securing transfers seamlessly with no middleman and minimal attack factors.

Picasso remains the  #1 protocol for secure cross-chain asset transfer and restaking.

Mission and Vision of Composable Through Mantis, so what about LAYR?

Composable’s mission is to abstract away inter-ecosystem decision-making and maximize users’ and developers’ outcomes based on their unique goals. This vision remains central to their efforts as they continue to build solutions that enhance cross-chain interoperability. What was originally LAYR has evolved into Mantis. Today we are using the most cutting-edge tech stack led by our team of researchers. They are supported by partnerships with leading universities like Harvard and the University of Lisbon.

The Mantis Solution: The Stack for Chain Abstraction

While various solutions for chain abstraction exist, none match the comprehensive and opinionated approach of Mantis. The Mantis framework is built upon three fundamental layers:

Application Layer

Mantis will introduce its own application designed for socially oriented trading experiences. Beyond this, Mantis aims to become the backend engine for Telegram bots, AI agents, and wallets that offer user intents. Future plans include integrating with MPC wallets and other expression layer components, expanding the reach and functionality of the application layer.

Processing Layer

At the heart of Mantis lies a robust solver network capable of supporting various order types such as Coincidences of Wants (CoWs), Requests for Quotes (RFQs), and partial fills. These permissionless solvers will integrate with a wide range of order flow destinations, including games, decentralized exchanges (DEXs), lending protocols, and more. This multi-domain processing capability will support Ethereum, Solana, and other ecosystems connected via the Inter-Blockchain Communication (IBC) protocol.

Settlement Layer

Mantis emphasizes multi-domain settlement, initially focusing on settling transactions through IBC. Future developments include research into cross-domain Maximal Extractable Value (MEV) and combinatorial per-confirmations, aimed at introducing atomicity with synchronous composability. These advancements will enhance the efficiency and reliability of cross-chain settlements.

Vision for the Future

As we look to the future, our vision remains clear: to provide the best cross-chain experience possible, enabling secure and efficient value transfer across diverse blockchain ecosystems. Mantis and Picasso are poised for significant success, leveraging our innovative solutions and deep industry expertise to lead the way in the evolving DeFi landscape.

This approach aims to make cross-domain MEV resemble Payment for Order Flow (PFOF) in traditional equity markets. By adopting this model, Mantis ensures that users receive the best possible execution of their transactions while creating additional revenue streams for network participants. This alignment of incentives fosters a healthier, more efficient ecosystem, encouraging broader participation and innovation.

Join us on this transformative journey as we continue to build and expand, ensuring that our solutions not only meet, but exceed, the needs of the DeFi community.Sign up for the waitlist now! Get boosted rewards and early access to protocol features.