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12 Mar 2024

3 min read

Catalyst - Case Study

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In the rapidly evolving blockchain space, the need for seamless interoperability and efficient asset exchange across different networks becomes increasingly critical as we are moving into a multichain future. Catalyst, a cross-chain Automated Market Maker (AMM) protocol aiming to unify liquidity across chains bears great potential to address this need. A major step forward is its strategic integration with Wormhole’s interoperability protocol, which further expands Catalyst’s functionality.

The Challenge

The blockchain ecosystem is an increasingly fragmented landscape, with a growing number of L1s and L2s all operating independently. The friction between these execution layers creates significant challenges for users and developers alike, particularly when it comes to the exchange of assets and information between different chains. The lack of interoperability not only hampers the flow of value across the ecosystem but also limits the potential for innovation and collaboration. In response to this pressing issue, Catalyst, with its cross-chain AMM, has embarked on a mission to bridge these divides and facilitate a more connected and efficient multichain future.

The Solution

To serve as a global liquidity layer in a multichain world, Catalyst integrates with Wormhole, a premier multichain interoperability protocol. Wormhole serves as an arbitrary messaging bridge (AMB), allowing for the secure and seamless transfer of data and value across its more than 30 supported chains. The integration enables Catalyst to leverage Wormhole's versatile multichain message-passing protocol, effectively broadening the scope of cross-chain swap capabilities to include a multitude of leading blockchains such as BNB Chain, Injective, and Solana.

The integration works by utilizing Catalyst's four core components: pools that store digital assets on-chain, an AMM for asset pricing across chains, a cross-chain message aggregator for state verification, and solvers for fast liquidity. When a user wishes to exchange assets between Ethereum and Polygon, they deposit their assets into a Catalyst pool, which then generates a Unit of Liquidity. This unit is crucial for the cross-chain swap process, as it is included in a swap message passed through Catalyst's aggregator and ultimately to the target chain, where the corresponding assets are released to the user.

The Result

By adding Wormhole to its cross-chain message aggregator, Catalyst can now deploy pools on any Wormhole-enabled chain, significantly enhancing the reach of its protocol. This enables a future where assets and information can flow freely across different networks. This significantly enhances liquidity, enabling users to execute swaps with unprecedented ease and efficiency. Furthermore, it paves the way for innovative applications across various sectors, from decentralized exchanges and governance to gaming.

About Wormhole

Wormhole is the leading interoperability platform that powers multichain applications and bridges at scale. Wormhole provides developers access to liquidity and users on over 30 of the leading blockchain networks, enabling use cases that span DeFi, NFTs, governance, and more.

The wider Wormhole network is trusted and used by teams like Circle and Uniswap, and to date, the platform has facilitated the transfer of over 35 billion dollars through over 1 billion cross-chain messages. To learn more about Wormhole, visit the Wormhole website, Twitter, Discord, or blog.

About Cata Labs

Cata Labs is a software development company that contributes to open-source technology, including Catalyst Protocol. Cata Labs is backed by prominent investors such as Spartan Group, HashKey, Polygon and Circle. Check out our website here.

Catalyst Protocol is an AMM purpose-built to connect all chains. Its mission is to empower individuals to acquire any asset on any chain. Using Catalyst, any chain can swap assets with major blockchains like Cosmos, Ethereum and its rollups. Catalyst Protocol is operated by Catalyst Foundation, based in the Cayman Islands. Find out more about Catalyst Foundation at its Twitter.

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