gwormpikepythnad

We’ve been the only non-purple member of the Purple Ecosystem - but no longer.

Liquidity fragmentation in DeFi is increasing, both across EVM, and non-EVM ecosystems - but now’s the time to address it.

Introducing Pike Purple.

Cross-ecosystem liquidity.

Coming to Monad.

tldr:

• Pike Purple is a new product offering from Pike that will support cross-ecosystem lending, borrowing, swaps, and transfers - without need for bridging/wrapping

• Support for EVM and non-EVM ecosystems like Solana, Sui/Aptos, Cosmos and more

• Built on Monad to ensure performance and optimal user experience, with native cross-chain price feeds from Pyth Network, supporting NTT (Native Token Transfers) assets and enabled by Wormhole Messaging

• A new product offering, USDC+, will allow for token swaps and transfers across chains and ecosystems, without need for wrapped assets or bridges - enabled by USDC already supplied within Pike Purple for lending/borrowing

• Coming to Monad Public Testnet later this year, with development already underway

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What is Pike Purple?

Pike Purple is the next evolution of the Pike protocol - designed to combat fragmentation and low capital efficiency of liquidity across the entirety of DeFi.

Pike Purple is a liquidity hub that allows for lending, borrowing, swaps and transfers between multiple ecosystems and chains - without the need for bridging or wrapped assets.

Imagine supplying $SOL as collateral on Solana, then borrowing $USDC on Base against it - without needing to use asset bridge, or wrapped assets. Furthermore, you’ll also be able to transfer/swap assets between chains and ecosystems through Pike Purple, utilizing the universal USDC+ Pool - again, without bridges.

Pike Purple  will support ecosystems such as EVM, Solana, Cosmos, Sui, Aptos, and more - this will be enabled by Monad. It will also support alternative assets like LP tokens, LSTs, LRTs, etc from across DeFi.

Pike Purple will also leverage natively cross-chain price feeds from Pyth Network, and also utilize Wormhole Messaging, as well as support NTT-enabled assets - similar to the already existing support for Circle’s CCTP.

It serves as a foundation for our long term vision - a Universal Liquidity Protocol that provides a seamless cross-ecosystem experience, without the risks associated with asset bridges and/or wrapped assets.

This is a testament to Pike’s place within the Purple Ecosystem, and the protocol that unlocks maximum liquidity efficiency.

How does Pike Purple work?

Pike Purple will function with a Hub and Spoke architecture:

Each chain, regardless of ecosystem, will be home to a “spoke” deployment of Pike Purple - where all deposits/borrows/swaps/transfers are initiated (for that chain).

Whenever a transaction is initiated on a spoke, a message will be relayed to the “hub” deployment on Monad - which serves as the central processing center for all accounting and smart contract logic.

This message will be sent using Wormhole Messaging, and allows the hub to maintain universal accounting of all the assets available across all of Pike’s spokes, as well as user collateral deposits and outstanding debts.

When a user wishes to borrow on a spoke, it is the hub on Monad that determines how much the user is able to borrow based on the collateral they’ve supplied (on any spoke) as the hub is constantly updating the spokes every time a cross-chain transaction is initiated (which almost any and every transaction that occurs on Pike).

Monad will also have a spoke deployment of Pike, and this will operate like any other for users who wish to deposit collateral or borrow on Monad itself.

To get a feel for how the Hub and Spoke model operates, feel free to try the Pike Based beta which shares the same architecture design principles. Pike Based is currently live on Base, Arbitrum, Optimism and Ethereum.

Why the Purple Ecosystem?

Being friends with culturally aligned protocols is great, but at the end of the day, a product must stand on its own. Let’s explore why the other members of the Purple Ecosystem are not only inherently remarkable, but also the best solutions to enable the development of Pike Purple.

Why Monad?

For Pike to operate optimally, it requires performance above all else. With the Hub being the central place where accounting and smart contract logic occurs, this also serves as the brain for the spokes to interact with and as a result, if it’s slow - it can bottleneck performance of the entire protocol.

In the current deployment of Pike (hereby referred to as “Pike Based”) - we decided to utilize Base as the Hub primarily due to the fact that when it came to relaying messages back and forth between Ethereum and EVM L2s through Wormhole, it had the fastest performance, highest reliability and lowest fees. In some instances, it was actually faster to send a message from Chain A, to Base, to Chain B, than it was to send a message directly from Chain A to Chain B.

Now while that’s fine when specifically operating on Ethereum and its Layer 2’s, when it comes to doing the same with non-EVM ecosystems such as Solana, Sui or Cosmos - there is a huge discrepancy between performance between ecosystems. The reason this is important, is because the Pike Purple Hub is constantly receiving and relaying messages from countless chains, ecosystems and users, and must account for all of them - in real time. Combined with the gas costs the hub will have, this will require a high level of performance that is not common in general, let alone on EVM.

For example, let’s take Solana which will usually operate between 800 and 3000 TPS - depending on where you source this data (which can change depending on how it's calculated). On the other hand, within the EVM ecosystem, Binance Smart Chain is regularly the fastest EVM-based chain, however averages at around 50 TPS. Monad has a great explanation of TPS that can be read here.

This introduces a dilemma - do we establish the Pike Hub on a chain like Solana? We could, but it can result in a reliability hurdle, not to mention, potential performance bottlenecks with how Solana interacts with other non-EVM ecosystems like Cosmos and so on. On the other hand, EVM is still the main hub of DeFi (both in terms of liquidity and users), and so inter-EVM communication is far more well established, and by extension, EVM to non-EVM interactions as well, but can result in a compromised UX for users familiar with far more performant environments.

Monad is the only chain that addresses the trilemma of dilemmas - compatibility, access to EVM-based liquidity and performance that non-EVM users are familiar with. Combined with the aligned culture of Pike of “growing the pie” and inclusivity, regardless of what chain you call home - Monad is the obvious choice.

Why Pyth?

Pricing of assets is extremely important, and must be available for assets across any chain - regardless of where the price feeds themselves originate. As a result, Pike  leans heavily on the functionality provided by yet another member of the Purple Ecosystem - Pyth Network which supports real time prices for over 400 assets on 40+ blockchains.

For example, if you were trying to get a price feed of $SOL on Ethereum, you would be forced to use a local feed for Wrapped SOL. While fine for most applications, pricing is exceptionally important for a lending market where positions are managed constantly for liquidation reasons by users.

As a result, the price feed for local Wrapped SOL on Ethereum will inherently be less reliable than native SOL on Solana due to the lower liquidity, volume, and security concerns due to it being a wrapped asset.

Pyth Network is unique in that its price feeds are available anywhere, regardless of where they originate. Due to this, the spoke deployments of Pike (as well as the hub itself) are able to source clean, reliable data for the native assets.

In this same example, since $SOL is native to Solana, and no other ecosystem, the hub on Monad would be able to access price feeds that are derived from activity upon Solana itself (since that is where most of the on-chain volume exists) through Pyth from Day 1.

This is invaluable since Pike Purple will be supporting multiple ecosystems, and as new assets or chains become available on Pyth (and integrated within Pike), every single spoke (and the hub) will be able to access this data immediately.

Why Wormhole?

Finally, a key infrastructure which Pike Purple uses is Wormhole, with their Messaging product - and this is a team we personally have a long history of working with both personally and from the perspective of a solution provider. Wormhole facilitates cross-chain messaging by enabling dApps to transfer assets and source chain data between networks, allowing them to provide services on different destination chains - without the use of asset bridge.

With Wormhole Messaging, Pike Purple has a robust and reliable way to keep track of balances between each of its spoke chains, without needing to develop a specific solution internally. This enables Pike to verify  users’ collaterals on any spoke chains within Pike’s smart contracts. The hub then produces a verified message which is sent back to any spoke chains. Once this is completed, the user can borrow on any spoke chains.

Now of course, Wormhole isn’t the only infrastructure provider that offers this kind of solution, however they are the only provider that has the ethos of growing the pie and inclusivity. The very first product Wormhole launched was the first bridge connecting EVM and Solana - back in 2020, and is a testament to ideals of connecting ecosystems from day 1.

This culture has only been reinforced as the years have gone by, with Wormhole offering connectivity between the most number of ecosystems from the Move-based chains to Polkadot and this has been a deliberate focus for the team. As a result, not only is Wormhole aligned with Pike from a Purple Ecosystem perspective, but also with the vision of streamlining DeFi by lowering the hurdle from EVM to non-EVM ecosystems.

What is USDC+?

Stablecoins are the lifeblood of lending markets, and Pike Purple is no different. Leveraging CCTP, the USDC+ Pool is a universal liquidity pool within Pike that contains native USDC from all the supported chains and serves as a central source of this asset.

Since this exists as a single universal pool, it can be used to send USDC from one chain to another simply through Pike, without needing to bridge (which results in wrapped/bridged versions of USDC), or even having to use CCTP.

Pike does this by simply:

• User wants to send USDC from Chain A to Chain B and inputs 100 $USDC

• 100 $USDC on Chain A enters the USDC+ Pool

• This information is relayed to the Pike Hub on Monad

• The Pike Hub then tells the spoke on Chain B to release 100 $USDC

• User can receives 100 $USDC on Chain B, extremely quickly and without need for wrapping or bridging

The USDC in this pool is simply what is supplied on each of the supported chains (which is used for borrowing) that is used as either collateral or to earn supply APR and/or incentives - and as a result, doesn’t require a dedicated liquidity pool that may be the case within typical bridge solutions. This functionality actually already exists within Pike Based however its true potential reveals itself once cross-ecosystem is included.

Because of this, it actually unlocks an even larger capability within Pike Purple as a cross-chain and cross-ecosystem token transfer protocol - without needing a bridge, and simply leveraging features that already exist within Pike by default.

As a result, Pike Purple can easily integrate swap aggregators on either end of this flow, regardless of the ecosystem - and allow for swaps from any local asset on a supported chain, to any local asset on another. Furthermore, due to the speed and low costs associated with this, this entire flow can also be integrated into cross-chain transfer aggregators like Rango Exchange and Li.Fi or tools like Wormhole Connect.

For example:

• User wants to send $SOL from Solana, and receive $ARB on Arbitrum

• Pike Purple then uses a Jupiter Exchange call to swap $SOL for native $USDC

• This $USDC is then deposited within the USDC+ Pool on the Solana spoke

• The Pike Hub then releases $USDC on the Arbitrum spoke

• The $USDC is then swapped to $ARB using 1inch

• The user then receives $ARB on Arbitrum without any bridging or (un)wrapping involved and in a single user flow

Roadmap

• Pike Purple will first launch on Monad’s public testnet as a V1

  • User testing and feedback

  • This will include performance testing of Monad Hub with all possible message routes between chains/ecosystems

  • This will support multiple chains/ecosystems with native assets i.e. $SOL, $SUI, etc

  • Preliminary support for the USDC+ pool

• Testnet V2 on Monad’s public testnet will then result in heavy auditing and due diligence

  • User testing and feedback

  • Supporting cross-ecosystem transfers/swaps through the USDC+ pool

  • Support for alternative assets that require more stringent pricing and risk analysis

    • Pendle PTs and LPTs

    • Liquid Staking Tokens e.g. wstETH, jitoSOL, etc

    • Liquid Restaking Tokens e.g. rswETH, rsETH, etc

    • Synthetic assets

• Pike Purple Mainnet launch alongside Monad Mainnet launch

What about the current Pike deployment?

We are committed to continue building on the Base ecosystem and have been doing so since before it’s mainnet launch. As a result, “Pike Based” will continue to operate, focused on Ethereum and the L2s - tailored for it’s security and culture, and will involve further increasing deposit caps as security confidence increases as we continue to work with Ottersec.

Furthermore Insights from the capped beta phase highlighted concerns regarding high ETH deposit/withdrawal fees. To address this, Pike Based will introduce an ETH+ pool module to support ETH on mainnet and L2s.

This module aims to reduce mainnet fees and enhance cross-chain liquidity, complementing the existing USDC+ pool to facilitate over 90% of cross-chain liquidity relocating and swapping use cases within the Ethereum ecosystem.

Additionally, we’ll be adding a number of UX improvements both on the front end and within the protocol such as gas fee optimizations to make the protocol far cheaper to use.

These additions and improvements are slated for Q2 and will be accompanied with heavy auditing and due diligence both internally and with auditing partners.

Pike Based will underscore our commitment to the Base and Ethereum ecosystem, while we develop our cross-chain deployment and strategy on Monad.

gwormpikepythnad🫡

About Pike:

Pike is a Universal Liquidity Protocol; it is designed to unleash utility for native assets by aggregating liquidity across blockchain networks.

Pike’s vision is to become a universal liquidity layer that enables frictionless movement and accessibility of native assets across ecosystems. Pike is built on top of Wormhole’s Cross-Chain Data Messaging and Circle’s Cross-Chain Transfer Protocol (CCTP), and utilizes Pyth Network’s Price Feeds.

One fundamental primitive of Pike is to enable users to supply native assets on source chains and borrow native assets destination chains without interacting with cross-chain bridges and handling wrapped assets.

Learn more at: https://www.pike.finance/

Join the Discord at: https://discord.gg/pikefinance