📄️ How Does Catalyst Work?
Catalyst is a cross-chain AMM that only needs an interoperability messaging layer to operate. This enables easy-to-use, secure, and fast cross-chain swaps. Traditional AMMs price assets based on their internal state, which means the balances of assets within the AMM. Catalyst splits the state of the AMM across different chains: pools of assets can be created on different chains and connected together by a cross-chain messaging layer.
📄️ Catalyst Differentiators
The creation of the unit of liquidity enables 4 significant improvements from current solutions:
📄️ Unit of Liquidity
The unit of liquidity (UoL) is an abstract representation of asset value that can be transferred between blockchains. It acts like a receipt that individuals can use to redeem assets on another chain. When someone deposits an asset, they receive a UOL in return. This unit serves as a standardized accounting mechanism, indicating the ratio of value between the deposited asset and the asset available for redemption on the other chain. It enables cross-chain swaps by providing a common measurement for asset value across different blockchain networks.
📄️ The Vision
Catalyst has a vision for a global liquidity layer for all chains—available automatically at launch.