Community Update 7 - June 2023

Welcome my dear friends, supporters, and active community members of Chainflip to the 7th(?) instalment of the Chainflip Community Update.

This is the final pre-launch community update you’ll hear from me. From here on out, it’s nothing but announcements. It’s hard to believe that it’s been over three years since this journey began (for me at least) as a seed of an idea in the midst of the early pandemic days. We’ve also had a lot of our first generation of team members at Chainflip Labs enjoy their two-year anniversaries as well, highlighting just how much work has gone into this project to get to where we are today.

In this post:

1. A Word of Thanks
2. The Security Audit and its Results
3. Launching the Chainflip SDK, Broker, and LP API.
4. Le Cross Chain Open Workspace @ ETH CC Paris
5. Token Sale & Launch: FLIPping Stuff
6. Mainnet Launch Initiating Stuff
7. Product Launch: Swapping Stuff
8. Beyond Launch: What to Expect

One: A Word Of Thanks

Before we get into the details of what has gone down in recent months, and more importantly, what the shape of the Chainflip launch looks like, I want to take a moment to thank a few people.

Firstly, I want to express my appreciation for our wonderful investors. Things have taken longer than we had initially hoped, but all of you accepted that risk and many of you have stuck with us through some tough years in the global economy and done what you can to help us on our journey. Without our strategic supporters, there is no way this project could get to launch, or any of the team would be here.

That brings me to the Chainflip team, who I also want to thank for all their efforts. Judging by our security audit results, recent social media stats, and positive feedback from all of our external parties, we have grown to become a lean, efficient, and highly capable squadron of ace keyboard warriors. Being an abstract form of work, sometimes it’s hard to judge how well we’ve been doing at this whole pre-product-crypto-project-startup-thing, but over the last 6 months especially, it finally feels like we can be truly confident in each other and our work. There isn’t a single team member I can think of who hasn’t improved their personal capabilities and contributions in recent times, so I want to give a shoutout to all of you. And yeah, that’s a total cop-out, but it’s true, ok?

Finally, to the Chainflip community - why you guys have stuck around for the better part of two and a half years - despite there being no token, product, or promise of reward - totally beats me, but I am grateful beyond words for your consistent love, support, and engagement. I’m sure the whole team will agree that without you, this journey would have been lonesome and especially challenging. I beg you to keep up your A-tier shitposting and legendary testnet antics, and hope that you feel as positive as we do about what is to come. Don’t forget to pick up your Early Supporter Pass - it’s for all the OGs and it’s free.

With all that said, this is only the end of the beginning. The real test for all of us is yet to come.

Two: The Security Audit and Its Results.

If you’ve been reading the Dev Updates, then you’ll know that in recent months we have been under the pump trying to get all of our core code to audit. In March, it began. First with reviewing the cryptography, then with the secure code, in total the project ran over the course of 8 weeks and involved the efforts of 6 different security engineers from one of the world’s most highly regarded security auditing firms, especially in blockchain. When the report is published, you’ll find out who it is!

We were extremely impressed with the skill and thoroughness of the team, who somehow managed to review all of the core code that we specified within this time with extreme detail. Of course, no security audit is bulletproof, but there were definitely things that they found that we knew couldn’t be identified had they not been so detail-oriented.

I’m very pleased to say that we felt that we did extremely well considering we are still pre-product. The system we have built is remarkably complex, even in the context of the blockchain world, and there is little we can do to avoid much of that complexity. However, in spite of that, there was only one security issue identified which I would consider a “zinger.” The rest were either already known about and had solutions already planned, or not a risk to user funds with the intended launch features. Had nothing been found, that would be more concerning. The audit team provided us with some excellent recommendations to maintain and improve the quality of our software and the security of the network.

We’re going through the fix review now, and when that’s done and the report is published, we’ll post it for the world to see.

In the future, we will commission external audits periodically to make sure that any major changes to the core pipeworks of the protocol responsible for holding and moving user funds around are designed and implemented correctly, but for now, we are satisfied that this codebase is in good enough shape to go-to-market with.

There will almost certainly be issues that crop up in testing and in production, but they are more likely than not going to be reliability related rather than security related, which are far less worrying to me. In security, there is no substitute for time in the wild, so it’s time to put this puppy out there.

Of course, we will also have bug bounty programs of various kinds to create the right incentives around any security issues found by external parties, though frankly, we doubt anything exciting will be there. Let’s hope I don’t have to eat my words.

Three: Immediate Launches: Bitcoin, Perseverance 0.8, Chainflip Swapping SDK, Broker, and LP API.

With Perseverance 0.8 finally here, we’ve got great new features and updates pushed to a live network. The next thing I am most excited about in the immediate future is the imminent launch of our SDKs and APIs ready for anyone to test and start integrating Chainflip EVM, Polkadot, and Native Bitcoin swaps in their own products and protocols.

Let’s go over these exciting developments in a bit more detail:

Bitcoin is Here

A major milestone has been crossed with our Bitcoin/UTXO protocol audited and now live on the testnet. We think that this will be our key go-to-market strategy based on feedback from our partners. Martin has done some fantastic work to create a brand new Bitcoin key-rejuvenation scheme that has made vault management and multi-chain rotations much easier and safer. By the end of March, it successfully went to audit, and now, it’s launching on 0.8 for full testing and integration and will be making it to mainnet launch. That’s right- it’s official. Native BTC swaps available upon launch from day one!

This new scheme unlocks a lot of potential to support a lot of unique chains that otherwise might be difficult to integrate such as Aptos, Sui, Arweave, Litecoin, Cardano, and many more besides. UTXOs are weird, and as one of the few cross-chain protocols providing true native support for the asset at incredible prices, we are bullish that it will make Chainflip, and all of the protocols that integrate with us, the most competitive offering for the BTC market on-chain.

Shipping A Useable SDK & Interaction Packages

We have been trying hard for months to publish something functional for our external partners such as Squid so that we can make sure that come Product Launch, everyone is ready to roll and can make use of these epic features like native BTC swaps.

The Chainflip Swapping SDK is perfect for any wallet or aggregator to fully integrate native Chainflip swaps into their product. We have developed it alongside our own Swapping App so that we know it works. This is also fully compatible with cross-chain messaging, allowing tight and seamless integration between Chainflip and other cross-chain protocols and DEXes. We’ve been working in close conjunction with our friends at Squid, who have been an inspiration and massive help for our mutual front-end integration. With a range of other partners working with us to bring native swaps to the people of the world, we are very excited to tell you to go and check it out at: https://github.com/chainflip-io/chainflip-sdk-monorepo - you will need a bit of assistance to get it working, so please hit us up in Discord!

Alongside the SDK, we are also shortly releasing our Chainflip Broker Bundle, which will allow SDK users to run their own State Chain interface and set their own fee to relay swap requests and open deposit channels on the State Chain on behalf of users. This gives any developer of wallets, aggregators, DEXes, or many other products the option to take a fee and earn revenue by bringing volume to the system.

Finally, and perhaps most importantly, we finally announce the release of our Liquidity Provider API Bundle, which gives the all-important liquidity provider the ability to put up orders programmatically through the JIT AMM. Unlike other DEXes, this will be packaged in such a way that LPs will be able to directly connect to the State Chain client using Websockets and RPC calls typical of centralised exchanges, eliminating the requirement for complex middleware to translate blockchain activity into information and instructions compatible with typical market making software.

This is essential for external market makers and professional liquidity providers to actually integrate the Chainflip DEX into their system. Without this, users might not get good prices, as the development time to integrate is a major detractor for other DEXes in the eyes of professional liquidity providers. We’re going to beat all other DEXes on prices for the assets we support, but only with this wonderful API that gives LPs the ability to offer centralised exchange prices in an on-chain environment.

Dr Benjamin Loveless (actually just a really nice guy, plenty of love in him), the Director of our Irish sister company JIT Software Strategies, has been developing market-making software for Chainflip using this API and is working on a short video next week to walk you through what the API looks like and how it works at a high level so that anyone can understand what LPing on Chainflip really looks like.

We’ve got $13m in committed liquidity to be injected into the Chainflip DEX within the first 28 days of going live. Furthermore, most of the proceeds in the Token sale will be going towards providing liquidity in the JIT AMM directly. TVL is not a helpful metric to predict how good the swap pricing will be (it will be much better than you would typically expect), but it is exciting to know that from day one, we will be improving swap rates for the entire ecosystem immediately.

Four: Token Sale: FLIPping stuff

Ok, here come the juicy bits.

However, other than the fact that it is happening very soon, we are not allowed to say anything about the token sale itself. A shame, I know, but it is what it is.

What we can say is that the token sale is happening before the actual mainnet launch and token distribution - more on that in a sec.

While we are remaining tight-lipped about the token sale for now, we will have updates and announcements very soon. The best way to stay up to date on what is happening is to join the Discord, follow our Twitter and look out for various upcoming campaigns that we are launching. It really is show-time now.

Five: Mainnet Launch & TGE:  Initiating stuff

After the sale is over, there will be a period of time to allow us to spin up the mainnet. We will launch it internally a few weeks in advance, and make sure that we and the external partners that need to plug into it are happy with it. This pre-public state is critical so that by the time things go public, everything is decentralised and all services for users are online.

Then on 'Distribution Day', we release the token all at once!  This is the “TGE” - all airdrop recipients, sale participants, and investors with unlocked tokens will receive their balance of tokens. Most other participants with unvested tokens will be able to stake them through special vesting contracts from this day.

The FLIP token will finally be publicly available and tradeable on a number of trading venues.

With the token release, the Validator auctions officially go live, and the fireworks will begin. Staking is expected to grow rapidly with early emissions expected to generate substantial yield until the Validator market stabilises. I recently spent a couple of days revising our Emissions and  Burning documentation, which has updated estimates on these numbers, so go check it out.

There are also some exciting announcements coming out around a FLIP Liquid Staking Derivative (LSD) built by an external team so that anyone can easily get exposure to the Chainflip Validator market without needing to run one themselves. More on that soon!

Six: Swapping Product Launch (Berghain Release)

Once the network has had a few weeks of auctions, and all of our launch partners have finished their integration work, we will be activating liquidity provision and swapping on the mainnet.

This marks the first time that real mainnet swaps will be happening on a public network. Users will be able to access Chainflip through our own frontend as well as through launch partner products which will enable Chainflip to offer users from many communities access to epic native swaps at great prices.

When swaps go live, we expect to see steady growth of swap volume as we are integrated into more and more services across the industry. We have a lot of plans to expand the protocol, but for launch, we have decided to focus on the pairs and chains that will make the biggest impact on the overall market:

• Native BTC - best on-chain pricing on the largest spot market in crypto
• Native ETH - most widely-traded non-stable asset in DeFi
• Native DOT - no comparable on-chain trading facilities to create new markets
• ERC20 FLIP - well, need I explain?
• USDC on Ethereum - most widely adopted DeFi stablecoin collateral (USDT and other stables will also be swappable, don’t worry)
• Possibly an EVM L2 asset and USDC - making swap routing between other protocols WAY cheaper for users

In addition, thanks to our amazing partnership with Squid, users will be able to trade assets on all these other chains with Uniswap and other DEXes, in any combination with the listed Chainflip launch assets. This will also be true for users of Squid and their widget!

• Ethereum
• Arbitrum
• Optimism
• Avalanche
• Polygon
• Binance Smart Chain
• Fantom
• Moonbeam
• Celo
• Kava
• Filecoin

The combined routing power of the two protocols will put us in the running to become seriously competitive with the centralised exchanges from day one. But that’s certainly not the end of the story.

Seven: Beyond The Main Launch

One of the more obvious ways to extend the protocol to be more competitive in the market is to offer more chains and more assets. Here’s a non-exhaustive list of assets we’re strongly considering for the first wave of new chains to be added to the protocol:

• Solana
• Sui
• Aptos
• Cardano
• Tron
• Doge

There are many more besides, but these chains represent underserved chains that have huge markets. We can offer users and partner protocols unparalleled pricing on-chain for these assets through the JIT AMM. How could we be so unkind and withhold such gifts from the world?

In addition, we’ll be rolling out features throughout the year which will reduce gas, speed up trades, improve pricing, make routing easier, allow for more complex routes, and improve overall reliability and performance of the network. All of these things make Chainflip more competitive in the aggregator market, and that makes the protocol a bigger magnet for volume.

Once the token goes live, you can expect an endless stream of upgrades coming to the network to make Chainflip the ultimate swapping protocol for these markets.

Eight: Le Cross Chain Open Workspace @ ETH CC Paris

Coming back to reality for a moment, I thought it would be a good opportunity to let you know that we’ll be back at EthCC in Paris again this year. This time, we’ll be hosting an open workspace at the Nuage Cafe from the 17th - 20th July, along with our co-sponsors and friends, Squid, Axelar, and Dora. Paris is a maze and finding a place to sit down and get shit done during the EthCC week can be very challenging, so we have booked out a lovely workspace and cafe for any crypto enthusiast to come and sit down, drink an iced tea, write a blog post, review a pull request, dump a shitcoin, or close a deal.

For those more socially inclined, we'll be hosting Wine Downs Monday 17th July and Thursday 19th July from 5pm-7pm, where you can come and meet the founders, grab a drink and network with other builders.

You can sign up for the event and see all the details here: https://lu.ma/2yqjzgmn

If there's anyone you think we should meet throughout the week, please let Will or Shaun know about it so we can organise it!

Conclusion

So there you have it, the battle plans. Thanks once again to all those who have helped along the way. If you have any questions or have some ideas that might help us on the home stretch, reach out to us or hop in the Discord.

Now, if you’ll excuse me, I’ve got a protocol to launch.

See you on the other side, comrade.

Simon

Side Note:

With our upcoming launch, scammers are probably all over the place and may attempt to imitate the core team. You should always double-check to ensure that the information you're seeing is from our official communication channels listed below:
Twitter: https://twitter.com/chainflip

Discord: https://discord.com/invite/fEVXAcF7A8

Telegram: https://t.me/chainflip_io_chat

Blog: https://blog.chainflip.io/