CroCoDai: A Stablecoin for Cross-Chain Commerce

TL;DR

CroCoDai is a novel stablecoin designed for secure, efficient, and resilient cross-chain commerce in DeFi, addressing liquidity, price fluctuation, and platform failure challenges with minimal overhead.

Contribution

We introduce CroCoDai, a practical stablecoin system for cross-chain transactions that supports many blockchains and resists price and platform failures.

Findings

CroCoDai incurs small execution overhead.

Supports a large number of blockchains efficiently.

Resilient to price fluctuations and platform failures.

Abstract

Decentralized Finance (DeFi), in which digital assets are exchanged without trusted intermediaries, has grown rapidly in value in recent years. The global DeFi ecosystem is fragmented into multiple blockchains, fueling the demand for cross-chain commerce. Existing approaches for cross-chain transactions, e.g., bridges and cross-chain deals, achieve atomicity by locking assets in escrow. However, locking up assets increases the financial risks for the participants, especially due to price fluctuations and the long latency of cross-chain transactions. Stablecoins, which are pegged to a non-volatile asset such as the US dollar, help mitigate the risk associated with price fluctuations. However, existing stablecoin designs are tied to individual blockchain platforms, and trusted parties or complex protocols are needed to exchange stablecoin tokens between blockchains. Our goal is to design a practical stablecoin for cross-chain commerce. Realizing this goal requires addressing two challenges. The first challenge is to support a large and growing number of blockchains efficiently. The second challenge is to be resilient to price fluctuations and blockchain platform failures. We present CroCoDai to address these challenges. We also present three prototype implementations of our stablecoin system, and show that it incurs small execution overhead.