Connext (NEXT)

Basics

• Launched on: 10-2021
• Is live on mainnet.
• CeFi:

"This version of Connext is centralized. We fully acknowledge that this is the case and have been transparent about it from first deployment.

V2.x of Connext will enable support for transactions routed over multiple nodes, and will make it much simpler for any organization or individual to run their own node. At that point, we expect the network to become more and more decentralized."

• From their website (21-4-2020):

"Connext is an infrastructure layer that scales the Ethereum blockchain. Developers that integrate support for Connext can enable instant, low cost Ethereum transactions in their wallets, browsers, and applications!"

• "A non-custodial layer 2 payment-channel technology that enables off-chain, instant payments with low (or zero) transaction costs, helping scale the Ethereum network and paving the way for use cases like micropayments"

• According to the website they are:

1. "A scalability solution for EVM-compatible blockchains.
2. A software company that builds open source technology infrastructure for Ethereum applications.
3. A non-custodial batching or “compression” layer on top of Ethereum which retains the security and self-sovereignty qualities of the base blockchain."

And what they are not:

• "A custodial wallet or custody solution of any sort.
• An exchange or other financial service provider.
• A blockchain of its own."

Audits & Exploits

• Bug bounty program can be found [insert here].

Governance

• From their blog (13-1-2021):

"Censorship Risk on Routers. It is possible for routers that facilitate transfers to censor users.

We can mitigate the risk of selective censorship by reducing the information gleanable by routers as part of their operation. For instance, blind signatures and other zero-knowledge proof schemes can be used to shield sender and receiver data. We can also mitigate the risk of general censorship by allowing for routers to route to each other to create more possible paths through the network (coming in a future release), and by routing communications over TOR. We’re actively developing and/or investigating these possibilities, and will be iteratively rolling out support for them out over the next 6 months.

Censorship Risk on Messaging. To bootstrap, the Connext team is hosting the messaging infrastructure for the network. We really do not want to do this. It places a large reliance on us to maintain high uptime on the infrastructure and introduces a risk of censorship by the team.

We’re doing this because no reliable decentralized messaging implementation exists yet for web contexts. We’re actively looking into existing attempts like LibP2P and Matrix, and plan to roll our own system if nothing else works."

DAO

• From the announcement (20-4-2022):

"In addition to its role as a utility, NEXT will be used to govern the ecosystem treasury of the Connext network through a DAO."

Token

Launch

• On 20-4-2022 Connext announced their token.
• Previously on the website:

"No, Connext does not currently have its own native token. There are no plans for Connext to ever do an ICO/IEO."

Token Allocation

• Total supply: 1B tokens

Utility

• From the announcement (20-4-2022):

"NEXT is a utility and governance token that powers fair utilization of the network. Unlike other solutions in the interop space, where the security architecture relies on economic incentives, Connext is secured directly by the chains underlying it. The purpose of the NEXT token, then, is not to provide security but instead to maintain operational fairness for routers after our upgrade. Routers, the nodes of Connext, have to stake NEXT to participate in the network, and earn a proportional share of work in return. In addition to its role as a utility, NEXT will be used to govern the ecosystem treasury of the Connext network through a DAO."

Other Details

• ERC20

Tech

• A protocol specification for Connext v2.0 can be found in the Counterfactual framework documentation.

• Whitepaper can be found [insert here].
• Code can be viewed [insert here].

Implementations

• Built on: Ethereum 
• From Our Network (13-11-2021):

"Connext is a cross-chain liquidity bridge, currently connecting nine EVM-based chains with each other."

• Capacity (TPS):

 How it works

• From their website (21-4-2020):

"Connext scales Ethereum using state channels. With Connext, users are able to batch many Ethereum transactions into one netted transfer by using signed off-blockchain commitments rather than direct on-blockchain transactions."

Upgrades

• Connext cross-layer2 network going live this week (4-1-2021) in first stage of three-stage rollout over 6 months.
• From their blog (13-1-2021):

"Vector, our flagship implementation of this network, uses state channels to enable swapping value between chains through a network of intermediary liquidity providers called routers. This means you can use Vector to:

1. Instantly enter and exit, circumventing withdraw windows, into any Ethereum L2, shard, or turing-complete chain.
2. Send value (and soon even call contracts) between L2 ecosystems. For instance, using Uniswap running on Optimism with assets on Arbitrum.
3. Execute normal state channel usecases like conditional micropayments.

Staking

• From the announcement (20-4-2022):

"Unlike other solutions in the interop space, where the security architecture relies on economic incentives, Connext is secured directly by the chains underlying it. The purpose of the NEXT token, then, is not to provide security but instead to maintain operational fairness for routers after our upgrade. Routers, the nodes of Connext, have to stake NEXT to participate in the network, and earn a proportional share of work in return."

Interoperability

• From DeFi Prime (2-12-2020):

"A cross-chain routing network created by the Connext team, Vector enables cross-L2 transfers that can considerably improve interoperability around Ethereum scaling solutions."

• Connext & 1Hive have together created a bridge between Matic and xDai (18-3-2021).

Their Projects

Virtual AMMs

• From DeFi Prime (2-12-2020):

"A cross-chain routing network created by the Connext team, Vector enables cross-L2 transfers that can considerably improve interoperability around Ethereum scaling solutions."

Seems to have been renamed into Virtual AMMs (17-5-2021).

Roadmap

• Can be found [Insert link here].

Usage

• From the token announcement (20-4-2022):

"To date has completed over 700,000 transactions and $1.3B in volume."

• From Our Network (13-11-2021):

"Since the launch of their liquidity bridge in early October, Connext has facilitated over $350 million in volume, spread across 305k transactions. In the last 30 days alone Connext facilitated $153 million in volume across 135k transactions, averaging a daily volume of $4.9 million."

Projects that use or built on it

• According to their website (21-4-2020): Mosendo, SpankChain, Provide, Ujo and MetaMask.
• OpenDEX is built with Connext (3-9-2020).

Competition

• Sablier, Matic and Celer.

Team, Funding, Partners

Team

• Team (21-4-2020)
• Arjun Bhuptani; CEO

Funding

• "Connext is backed (21-4-2020) by VCs and grants from the Ethereum Foundation. Long term, the Connext team expects to monetize through selling ancillary services for reducing the operating costs of running nodes."

• Backed by (21-4-2020):

Ethereum Foundation, Hashed, Spankchain, Genesis Block, Kryptonite 1, Dan Matuszewski, Dino Mihalopoulos

• From EthHub (23-3-2021):

"Connext Raises $2.2 Million. The round was led by Polychain Capital, with participation from 1kx and Huobi Capital. With fresh capital at hand, Connext looks to seed the early network liquidity and expand its team to launch the full network."

• From EthHub (20-7-2021):

"Raises $12 Million. The round had participation from 82 distinct entities including funds & exchanges, staking providers, L2 founders and angels."

• Matter Labs; according to Matter Labs, the founders and leadership of a bunch of DeFi projects, among which this project, joined in on the $50m raise for zkSync (8-11-2021).

Partners 

• Part of the DeFi Network
• Partners with Mosendo, according to their website (21-4-2020).
• Is a member of DeFi Nation, created by Mosendo (24-5-2020)
• Was a member (15-9-2020) of the Handshake Alliance that started up the Handshake project.
• Is mentioned as a protocol that will work with Skale (10-8-2020).
• Is working together with The Graph on state channels (9-10-2020).

• From this thread (9-2-2022):

"EVMos has partnered with Nomad + Connext for bi‐directional bridge btwn Ethereum & Cosmos Cosmos Hub based Gravity Bridge will also enable ERC‐20 token bridging to Cosmos."

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