Authors: The Vesta Core Team + Review from Frens
This RFC suggests the implementation of cross-chain VST minting and requests comment from the community on the functionality, design, and timeline. Cross-chain minting (XMint) of VST enabled through cross-chain messaging services will allow VST to be minted across multiple ecosystems, expanding its usability as a store and method of transfer for value. VST on the selected chains will also allow us to partner with lending markets, other stablecoins, perpetual and options protocols, yield aggregators, and more. We want to take a first mover advantage and become one of the dominant cross chain stablecoins.
While VSTA is currently bridgeable through Synapse and we plan on making VST bridgeable soon as well, cross-chain minting would open a new venue. The time needed to wait for confirmations and the negative liquidity slippage from normal bridging can prevent people from bridging over. Vesta’s adoption on other chains at the moment is quite limited. We believe that XMint will expand the supply of VST significantly.
Simply deploying Vesta on other chains runs into the issue of varying collateralization ratios for types of collateral impacting our interest rate module down the line as well as stability pool incentives. We also want users to be able to close their debt in one central location instead of bridging over.
Expanding beyond our comfy home on Arbitrum is not without additional risks, though. Some foreseeable pain points include maintaining fungibility of VST between different and possibly competing deployments, protecting against new vectors of attack in new and unfamiliar ecosystems, maintaining efficiency in liquidations cross-chain, as well as technological challenges inherent in new messaging systems such as LayerZero.
Despite these risks, we still believe in the viability of this proposal and the value it can deliver to current and future users of Vesta. Cross-chain activities will quickly become essential in maintaining a coherent and winning portfolio in the near future, and Vesta should be at the forefront due to our deep pool of experience on the bleeding edge.
We aim to be the first L2 lending protocol that fully supports cross-chain stablecoin (VST) minting.
Vesta wants to become the one-stop-shop for loaning against entire portfolios. Currently, no service allows users to effectively and efficiently gain a single revolving line of credit without liquidity fragmentation or bridging friction. Vesta aims to allow this by deploying credit nodes throughout a wide variety of L2s and L1s, enabling a consolidated debt position that’s easier to manage and harder to get liquidated on. This is what the XMint effort is intended to do.
Vesta’s implementation of XMint will use LayerZero’s communication protocol for cross-chain messaging, starting with EVM compatible chains, with expansion to other smart contract-based blockchains on the horizon. Layer0’s innovative technology allows for faster and more secure implementation of Vesta’s own cross-chain efforts. Click here for a more detailed explanation of how this works. XMint will be based on a hub and spoke architecture, with Vesta’s main deployment currently on Arbitrum maintaining the health of the entire protocol across all chains and ecosystems. While VST will trade independently across all chains, risk parameters, liquidation thresholds, and most loan-specific variables will be maintained on Vesta’s hub. This architecture is designed to both ensure the validity of issued loans and the security of withdrawals, as all loaning mechanisms are maintained by Vesta’s provably secure implementation on Arbitrum.
As cross chain communication continues to mature in both efficiency and speed, we expect many improvements in XMint even beyond deployment. We expect efforts by zkLink and Chainlink to have significant contributions in this effort.
Currently, we are aiming for XMint to be available within Quarter 3 2022. It is important to note that this will take significant engineering effort and will thus force other items on the roadmap to take lower priority.
Upon approval, further structure on more exact dates and a more specific timeline will be given.
Ecosystems to launch on (in no particular order):
- Ethereum mainnet
- Open to further EVM compatible chains to start
Update on May 5, 2022: this post has progressed from the RFC (Request for Comment) stage to the Community Poll stage