UAT20: Unifying Liquidity Across Rollups

TL;DR

UAT20 introduces a universal token standard utilizing CRDTs and a two-phase commit protocol to unify liquidity across multiple Ethereum rollups, addressing fragmentation and enhancing cross-rollup participation.

Contribution

The paper presents UAT20, a novel abstract token standard that unifies liquidity across rollups using conflict-free replicated data types and a secure commit protocol.

Findings

UAT20 effectively reduces liquidity fragmentation across rollups.

Empirical analysis confirms UAT20's necessity and effectiveness.

UAT20 enables seamless cross-rollup liquidity participation.

Abstract

Ethereum has been a cornerstone of the decentralized ecosystem, with rollup-based scaling solutions like Arbitrum and Optimism significantly expanding its capabilities. These rollups enhance scalability and foster innovation, but their rapid proliferation has introduced \emph{liquidity fragmentation}. Specifically, tokens distributed on multiple rollups fragment the liquidity of users, complicating participation in trading and lending activities bound by minimum liquidity thresholds. This paper proposes UAT20, a universal abstract token standard, to address liquidity fragmentation across rollups. Leveraging Conflict-free Replicated Data Types (CRDTs), UAT20 ensures consistent states across multiple rollups. We introduce a two-phase commit protocol to resolve transaction conflicts, enabling seamless and secure liquidity unification. Finally, our empirical analysis demonstrated the necessity and effectiveness of UAT20 in mitigating liquidity fragmentation within Rollups.