Flare's FAssets: Innovative Cross-Chain Solution

The Bitcoin ecosystem is迎来新的发展机遇，这不仅包括比特币本身，还涵盖了如cross-chain比特币等创新应用。在这一背景下，Flare作为一个独特的Layer 1解决方案脱颖而出。它不仅支持以太坊虚拟机（EVM），还提供了官方的cross-chain桥和预言机服务，从根本上增强了这些关键基础设施的安全性。

On November 30, 2023, Flare's important feature FAssets began testing. The core value of this feature lies in enabling non-smart contract assets (such as BTC and DOGE) to be utilized on the Flare platform. Furthermore, with cross-chain bridges like LayerCake, these assets can also be transferred to other blockchains. In a market where centralized Bitcoin cross-chain assets dominate, the decentralized solution provided by Flare may bring new application prospects.

FAssets: Trustless Cross-Chain Bridge

In the blockchain ecosystem, security is crucial. Generally, the market value of the native tokens of public chains is higher than that of dApps on the chain because dApps rely on the security of public chains. However, most assets are currently concentrated on Ethereum, and other public chains need to rely on cross-chain bridges to bring in these assets. This means that the security of assets on public chains is again built upon cross-chain bridges.

Many public chains attempt to develop cross-chain bridges on their own, but these bridges often rely solely on multi-signature systems to ensure security, which is somewhat centralized. On the other hand, public chains that choose to collaborate with third-party cross-chain bridges have their asset security completely dependent on these external bridges.

FAssets is a cross-chain solution specifically designed for Flare. It allows tokens on non-smart contract chains to be securely used in smart contracts on Flare without relying on trust. The minting process of FAssets involves a strict collateral mechanism: minters need a 1:1 collateral, and the agent responsible for minting also needs to over-collateralize. Agents can use a basket of mixed assets as collateral, such as stablecoins, BTC, ETH, and Flare's native token FLR. If the value of the collateral is insufficient, the agent will face liquidation risk.

Flare's innovation relies on two core components within its network: state connectors and the Flare Time Series Oracle (FTSO). State connectors enable information from other blockchains to be used in Flare smart contracts without trust, while the FTSO provides real-time price feeds for Flare, ensuring that the collateral value in FAssets is sufficient.

Minting Process and Participants

The minting process of FAssets involves transferring assets from non-smart contract chains to the Flare network. This process includes the following steps:

1. The user selects an agent and pays the fee.
2. The user sends the underlying assets to the agent.
3. The agent uses Flare's state connector to verify that the underlying assets have been deposited into a specific address.
4. After successful verification, FAssets are minted on Flare.

The entire system involves four types of roles: minters/redeemers, agents, liquidators, and challengers. Agents need to be over-collateralized, and if the collateral is insufficient, liquidation will occur. Challengers are responsible for verifying whether agents' funds are properly stored, ensuring the security and decentralization of the system.

Cross-chain BTC Solution Comparison

The main cross-chain BTC solutions currently on the market include BitGo's wBTC, Threshold's tBTC, and Ren Protocol's RenBTC, among others. While wBTC has the best liquidity, it is centrally issued. tBTC is used more frequently in DeFi applications, but it has faced scrutiny over transaction censorship. RenBTC has suspended minting due to funding issues within the team.

In contrast, FAssets provides a trustless way to mint cross-chain BTC. The official claim is that the collateral in the agent and community pool is over 200% of the issued FAssets. Although this system is more complex, it may require more time to launch on the mainnet due to considerations of security and decentralization.

Follow-up Development of FAssets and Recent Updates on Flare

FAssets is currently running on the Coston testnet and will launch on the Songbird network after several rounds of testing, eventually integrating into the Flare mainnet. The testing is divided into 7 phases, and it is currently in the second phase. The official announcement states that after the official launch, rewards will be distributed to FAssets cross-chain users through a cross-chain incentive pool.

Recently, Flare has made several advancements in project development, including the launch of the second phase of Flare staking, the destruction of 2.1 billion FLR tokens, and the preparation of FTSO developer tutorials. At the same time, Flare has also established partnerships with multiple projects and participated in the ETH London hackathon.

Summary

Flare's FAssets provide an innovative, trustless cross-chain solution that allows assets from non-smart contract chains to be transferred to Flare for use. Although this mechanism is relatively complex, it theoretically achieves trustlessness and decentralization. With ongoing testing and the mainnet launch, FAssets is expected to bring new possibilities to the cross-chain asset market.