Interpool: a liquidity pool designed for interoperability that mints, exchanges, and burns

TL;DR

Interpool introduces a standalone liquidity pool solution for blockchain interoperability that mints, exchanges, and burns tokens, utilizing an optimized transaction order and a novel protocol to ensure trustless, cross-chain atomic swaps.

Contribution

The paper presents a new interoperability protocol that operates independently without third-party reliance, integrating minting, exchanging, and burning within a single liquidity pool.

Findings

Enables trustless cross-chain atomic swaps.

Optimizes transaction order to maximize returns.

Strengthens liquidity enforcement through a novel burning procedure.

Abstract

The lack of proper interoperability poses a significant challenge in leveraging use cases within the blockchain industry. Unlike typical solutions that rely on third parties such as oracles and witnesses, the interpool design operates as a standalone solution that mints, exchanges, and burns (MEB) within the same liquidity pool. This MEB approach ensures that minting is backed by the locked capital supplied by liquidity providers. During the exchange process, the order of transactions in the mempool is optimized to maximize returns, effectively transforming the front-running issue into a solution that forges an external blockchain hash. This forged hash enables a novel protocol, Listrack (Listen and Track), which ensures that ultimate liquidity is always enforced through a solid burning procedure, strengthening a trustless design. Supported by Listrack, atomic swaps become feasible even outside the interpool, thereby enhancing the current design into a comprehensive interoperability solution