Building Autonomous Multi-Chain DApps Using Cross-Chain Automation Powered by Gelato

In the presentation below, Hilmar Orth, founder of Gelato Network, presented on the evolution of multi-chain applications and the impact autonomous cross-chain dApps would have on the ecosystem. 

Below are some highlights from his presentation. 

What Is Gelato? 
Gelato Network is web3’s decentralised backend that enables projects to augment their smart contracts by being able to leverage smart contrat automation, gasless transaction relaying and off-chain data and computation. Gelato is currently the largest decentralized protocol used by projects such as MakerDAO, Optimism or Yearn Finance to automate their smart contract executions across all Ethereum Virtual Machine (EVM) compatible blockchains. It was founded in 2019 by the developer duo Hilmar Orth and Luis Schliesske

Gelato aims to accelerate the adoption of web3 by providing DeFi, NFT and gaming applications with reliable and decentralised backend services which enable them to operate their web3 apps without a single point of failure. Gelato supports all major EVM blockchains, including Ethereum, Polygon, Fantom, Arbitrum, BNB Chain, Optimism and many more. A smart contract platform that operates on a blockchain compatible with the Ethereum Virtual Machine (EVM) can facilitate exchanges on the Ethereum network. EVM compatible platforms allow developers to create decentralized applications (dApps) that are similar to those that run on Ethereum.

Evolution Of Cross-Chain Applications 
Before we discuss the impact that autonomous, cross-chain dApps could have, we must understand how decentralised applications (dApps) have evolved so far. 

The first generation of decentralised applications was powered by Ethereum and had no cross-chain capabilities. These dApps could only be used by native users of the chain and were limited in functionality. Soon, the idea of multi-chains developed, and other blockchains, like Polygon, Avalanche, BNB chain etc., emerged by forking from Ethereum. Forking refers to a decision to branch off and generate a new blockchain with features or updates unavailable on the previous chain. This move enabled developers to redeploy their smart contracts on a different network, enjoying advantages like scalability or cheaper costs while remaining compatible with the previous ecosystem. Still, the protocols on other chains had very little communication, dissimilar interfaces and were not always managed by the same team.

With the rise of blockchain bridges, this situation eventually improved, and now we have multi-chain networks which can communicate with their instances on other chains. This works by triggering cross-chain messaging, which bridges to the other chain and performs the requested transaction.

Cross-chain messaging protocols utilise smart contracts to allow information to flow freely between blockchains that are otherwise isolated within the confines of their networks, making them similar to oracle networks as they both feed data across various chains. Multichain networks are an impressive development, but users still have to initiate the process and deal with the usual time delay that occurs. 

Hilmar believes that the next stage in the evolution of dApps  is the establishment of autonomous cross-chain applications. Autonomous cross-chain dApps  are revolutionary because users will no longer need to initiate the cross-messaging between chains. Instead, the smart contracts will automatically connect to the other chains when required. 

The two components required for this seamless setup are a cross-chain messaging protocol and an automating network like Gelato. With these two combined, smart contracts can be deployed autonomously across multiple chains. Abracadabra protocol is a practical example of an autonomous cross-chain dApp.  

Abracadabra Protocol 
Abracadabra is a DeFi lending platform that allows users to convert interest-bearing cryptocurrencies into its pegged stable coin, $MIM. The protocol’s native governance token is SPELL and is used for staking purposes and earning sSPELL, which grants voting rights and other returns on the platform.

Abracadabra Money is blockchain-agnostic and has launched lending markets on networks such as Ethereum, Arbitrum, Fantom, etc. The protocol utilises the Gelato network to manage the payment systems of SPELL across these networks. 

Three times a week, Gelato takes a snapshot of how much SPELL is distributed on each chain, aggregates the amounts, and then sends this information back to Ethereum using a cross-messaging layer. Then on Ethereum, a transaction is called that triggers the distribution. Gelato automatically distributes the correct amount and bridges MIM to each chain. These actions do not require any interaction from developers. 

Many cross-messaging protocols can be used in this process, such as Layer Zero, Connext and Multichain. By utilising Gelato Network for each contract automation, Abracadabra increases its speed and is protected against human errors making the protocol more secure and trustless. 

The Future Of Multi-Chain Dapps
Abracadabra isn’t the only protocol working with Gelato. In fact, Hilmar believes that more  dApps will be moving towards the autonomous cross chain model in the near future. Many DeFi platforms like Pancake Swap, Alpaca Finance and Curve are already using automation to reduce the operational costs of managing several chains. Gelato helps handle varying tasks from NFT lending periods to limit orders and yield rewards distribution. The frequency of these activities can be adjusted. 

Despite the many advantages of this system, it becomes very complex from a transaction payment perspective for protocols which are deployed on many chains to pay services like Gelato. That is why, Gelato has recently launched its novel 1Balance payment system, which enables projects to pay for all costs associated with either the computation or the transactions fees on Gelato with a single balance on a single chain. . This means that protocols can pay for transactions on Ethereum with a USDC balance on Polygon, creating what Gelato refers to as “network abstraction”.  

In Summary…
It has taken years of evolution to enjoy the capabilities that we currently do on decentralised applications. By upgrading to autonomous cross-chain dApps , we would be able to unleash a whole new range of incredible functionalities. DApps will be deployed and operated on multiple chains simultaneously, sharing data, messages, and operating logic. In the future, users won’t need to know which chains they are on. For instance, they could auction an NFT on Optimism and let users on Avalanche participate with $AVAX. With such seamless interoperability, web2 users would easily migrate to web3 applications, leading to even more development in the ecosystem.

The Blockchain Oracle Summit was the world’s first conference to focus solely on the important role of oracles in the wider blockchain ecosystem and their limitations. Leading speakers from across the world gathered in Berlin to share their work and experience building and using oracle solutions.

Learn more about Gelato Network:
Gelato Documentation
Gelato Twitter
Gelato Github
Gelato Discord
Gelato Youtube
Hilmar Orth Twitter

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