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A Look at Gasp’s Features: Liquidity Pools, EigenLayer Security, and More

Gasp Team

• 6 min read
A Look at Gasp’s Features: Liquidity Pools, EigenLayer Security, and More

Gasp is a cross-chain DEX and protocol designed for exchanging cryptocurrencies between blockchains (including L2s), implemented as a Layer 2 (L2) on Ethereum using EigenLayer restaked security. 

Unlike other existing and less efficient options that suffer from centralization vulnerabilities and lack of chain abstraction stack, Gasp offers a truly decentralized and secure platform with a self-custodial approach that helps guarantee liquidity withdrawal through features like escape hatch mechanisms. This ensures that users have full control over their assets without relying on intermediaries, mitigating the risks associated with centralization. 

Ahead of Gasp’s upcoming launch of a cross-chain DEX that can scale with large amounts of capital and high-speed trading for enterprise and individual retail users alike, we are publishing a series focused on Gasp’s underlying technology — a series of deep dives into Gasp’s gas-free, secure swaps.

In this article, we are exploring in greater detail the main features of Gasp’s core stack.

Under the hood of Gasp’s design

Gasp stands out in the Ethereum ecosystem and across web3 as a native cross-chain DEX and liquidity protocol, especially in comparison to cross-chain bridges that suffer from centralization and require wrapped tokens, adding complexity and security risks. The network is powered by the GASP token, which not only facilitates transactions within Gasp through staking but also enhances operational continuity and transaction capacity based on the stake size.

Gasp leverages a number of technologies such as escape hatches (which enable users to withdraw their funds at any time)‚ zero-knowledge proofs, a Ferry Mechanism (described in detail below), and decentralized sequencers to offer gas-free, MEV-protected, and rapid cross-rollup swaps. Gasp incorporates features like cross-chain liquidity pools and immediate fund transfer mechanisms, making it the best platform for solvers, solver layers, projects building intents protocols, and token holders who need seamless cross-rollup communications.

Cross-chain Liquidity Pools and Vaults

Gasp maintains liquidity pools on both sides of each swap, ensuring that they are available to perform transactions. The pools consist of a number of different cryptocurrencies, including ETH and L2 native tokens, as well as tokens deployed on top of Ethereum, L2s, and rollups. They guarantee enough volume exists across the Gasp ecosystem through mechanisms like “ferries”, which essentially fastrack availability of funds between chains, to facilitate/execute trades as fast as possible — and with minimal price slippage or transaction delays.  

Liquidity providers play a vital role in the Gasp ecosystem. By depositing their assets into these pools, LPs earn staking rewards. The pools not only encourage LP participation but also reward loyal liquidity providers who stay longer in the pools, through a mechanism Gasp calls ‘time incentivized liquidity mining’. This design helps in easing provider risks such as impermanent loss, in which the value of deposited assets falls compared to when they were first deposited. Staking fees and dynamic fee adjustments (based on market conditions) help manage these risks for LPs.  

The vaults securely store and manage assets, strategically allocating liquidity to various pools to maximize returns while maintaining sufficient liquidity for user transactions. The vaults feature security measures like multi-signature schemes and automated smart contracts to prevent unauthorized access and ensure safe asset management.

Working in tandem via smart contracts, the liquidity pools and vaults support cross-chain swaps. This ensures fast transaction finality with minimal risk.

EigenLayer Security 

ZK-rollups are effective within their own Layer 1 (L1) environments but they lack the capability to validate transactions across different chains, such as ETH<>BTC swaps. 

For cross-chain swaps, a reliable, trustless verification mechanism is essential, which is why we need to use Ethereum to certify the integrity of Gasp. And this is where EigenLayer comes into play. 

EigenLayer provides Gasp with the strong economic security of Ethereum that is needed to deliver on our vision. 

With Gasp integrated with EigenLayer, executing cross-chain swaps is as straightforward as interacting with a smart contract on Ethereum or any other integrated chain. Not only does Gasp’s EigenLayer security integration simplify the process but also ensures robust, trustless transactions across diverse blockchain ecosystems.

Gas-Free Transactions

Gasp's application-specific chain architecture avoids the double charging typical in other protocols, providing gas-free swaps. There are also no fees for MEV or other hidden costs. This straightforward fee structure simplifies cost calculations and keeps expenses clear for users.

Typically, a blockchain user product and an automated market maker (AMM) product are deployed atop each, each with its own business model. Gasp, on the other hand, combines the offerings for blockchain users and automated market maker (AMM) users into a single, combined product. The result is that Gasp has greater control over every aspect of its platform including its fee structure, and allows us to be competitive in more creative ways, while sustaining growth and reliability for our network.

One of the ways Gasp achieves this is with a simple 0.3% exchange commission fee. This commission not only helps finance network maintenance, but also incentivizes liquidity providers to promote a healthy trading environment.

Another way the network thrives without relying on conventions like gas fees is through proof of liquidity, which is the only requirement to trade on Gasp. Traders must hold GASP tokens to conduct trades, but they are not required to spend these tokens. This requirement ensures that participants have a vested interest in the network’s success, aligning incentives and maintaining ecosystem health. It also helps reduce the potential for spam transactions and network congestion (which can be very costly to manage), as only committed participants can engage in trades. By holding GASP tokens, liquidity is provided by dedicated users, enhancing overall network security and stability while maintaining a frictionless trading experience for legitimate users. 

Simply put, the more tokens you hold, the more trades you can make.

Ferry Mechanism

With cross-chain transactions, there is an inherent delay between L1 interactions, like a deposit, and its processing in the rollup. This creates a dispute period that is unavoidable because the rollup has to take time to verify that the data from the L1 is accurate. What this means is that the rollup cannot immediately trust all actors. However, individual actors trust their own reads and expedite the deposit process for users. 

Enter: the “Ferry” — a means of accelerating L1 deposits in a rollup.  

With Gasp, when a user initiates a deposit on one blockchain, a ferry — typically an independent actor or liquidity provider — observes this transaction and takes on the risk of advancing the equivalent amount on the target blockchain before the deposit is fully confirmed. The involvement of "ferries" ensures faster finality by taking on the risk of transaction validity, allowing for immediate fund transfers.

Here’s how the Ferry Mechanism works on the Gasp network.

When a deposit is made on L1, it must undergo a dispute period. During this process, other participants can access the L1 data and verify the deposit’s authenticity and, if it is found to be invalid, potentially cancel it. Following this dispute period, the rollup verifies the deposit as legitimate, then releases the funds to the user.

A Gasp ferry can also verify a deposit by accessing the L1 state. With the assurance that the rollup will eventually release the funds after the dispute period, the Ferry can immediately release an equivalent amount of their own funds on the rollup, then reclaim these funds from the rollup once the dispute period concludes. What’s in it for the ferry? Compensation in the form of a commission for what is essentially a short-term loan to the user. 

MEV Protection

Gasp's MEV minimization eliminates the power imbalance that allows the possibility of reordering and censoring transactions in traditional blockchain architectures.  

Typically, malicious actors can exploit the mempool — where transactions wait before being included in a block — by scanning and reordering transactions to front-run or sandwich other users’ trades. This is called “MEV extraction” and creates significant power imbalances and undermines the fairness of the network. 

Gasp offers MEV minimization through a randomized ordering mechanism that eliminates this vulnerability by concealing transaction details until the moment of execution. As a result, it’s very difficult for malicious actors to predict and exploit transaction patterns to front run or sandwich trades.

Join the Gasp Community and Start Building

Whether you’re a prominent DeFi participant, an everyday user, or a crypto enthusiast, we invite you to become part of the Gasp community. There are numerous ways to contribute: you can support the network, provide liquidity, and help expand the Gasp ecosystem, paving the way for a more interoperable and scalable web3 experience.

We’ve also launched Gasp Natives: The Explorer, a new initiative that takes you on a journey through the Gasp universe. This is our way of thanking everyone who has participated in the Gasp testnet so far. If you haven’t joined yet, there’s still time to get involved and be part of this exciting venture.

Dive into the Gasp community today and contribute to the future of decentralized finance. 

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