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There is a surge in on-chain activities across different blockchain platforms, such as L1, L2, and sidechains, as highlighted by DefiLlama. Each of these platforms offers distinct advantages, with some being more cost-effective or providing higher throughput. Notably, decentralized applications (DApps) are increasingly being deployed on multiple chains to broaden their user base; for example, Sushiswap (DEX) operates on 15 chains, and Beefy Finance (yield aggregator) on 12.
Despite the growing prevalence of multi-chain ecosystems, significant challenges persist in terms of user experience, Dapp development, and liquidity fragmentation. Users face intricate operations due to the exposure of lower-level processes, often lacking a clear navigation guide 🗺️. Additionally, the complexity of managing balances on different networks within crypto wallets contributes to a steep learning curve, hindering mass adoption.
Furthermore, the current state of multi-chain deployments results in fragmented liquidity and a lack of a "global state" 🌏 for DApps. Each deployment on a new chain functions as an independent copy without synchronization with counterparts on other chains, leading to varying user experiences and liquidity fragmentation. This fragmentation becomes apparent when users encounter disparate prices and slippages across different versions of the same DApp on various chains, necessitating complex processes like bridging assets between chains by the users.
To address these challenges, the concept of Omnichain/Cross-chain emerges. This approach envisions DApps with smart contract deployments across various chains to have seamless inter-communication between components. In simpler terms, users would no longer navigate multiple chains but instead transact and manage assets through a unified interface on a bridge. This would enable a more streamlined experience, offering unified liquidity across multiple chains, faster execution, and reduced capital costs.