Open HRMP channel between Astar Network and Equilibrium

TL;DR

We propose to open HRMP communication between Astar Network and Equilibrium. This will require actions on both chains.

Summary

We propose to open a bi-directional channel between Astar Network and Equilibrium. The primary use cases will be:

  1. To transfer Astar’s native token (ASTR) and Astar’s ecosystem assets to Equilibrium to integrate with Equilibrium’s suite of DeFi products.

More specifically, users would be able to use their ASTR tokens and other Astar’s ecosystem assets on Equilibrium to:

  1. stake in money market to earn yields,

  2. collateralize them to borrow other crypto assets (including stablecoins with Equilibrium’s curve-like stableswap),

  3. collateralize them to margin trade on Equilibrium’s fully on-chain orderbook DEX (e.g. margin trade DOT/EQD pair without having to own either one of these tokens)

  4. Equilibrium’s native token (EQ) and its overcollateralized native stablecoin EQD can be transferred to Astar Network to be used in the ecosystem, including the protocols that are built on top of Astar Network.

Proposal

There is no on-chain proposal yet. The proposal created in this forum acts as an official proposal between Equilibrium and Astar Network.

Technical details:

The procedure for opening the channels is as follows:

  1. Equilibrium initializes a proposal to open the Equilibrium-to-Astar Network HRMP channel via Astar forum.
  2. Wait until the proposal on step 1 gets approved & enacted.
  3. Onboard Equilibrium’s testnet on the Rococo relay chain and exchange public endpoints and parachain-ids.
  4. Wait until onboarding was successful on testnet.
  5. Astar Network proposes to accept the Equilibrium-to-Astar Network HRMP channel and open a Astar Network-to-Equilibrium HRMP channel via [Astar MuliSig Governance Batch call].
  6. Wait until the proposal on step 5 gets approved & enacted.
  7. Equilibrium accepts Astar Network-to-Equilibrium HRMP channel.
  8. Wait for another session on Polkadot for the change to be effective.

The extrinsics that need to be sent with xcm messages to they can be executed on the relay chain , are:

For step 1: hrmp.hrmpInitOpenChannel(recipient: 2006, proposedMaxCapacity: 1000, proposedMaxMessageSize: 102400) , which hex-encoded as 0x3c00d6070000e803000000900100

For step 3: The first call is hrmp.hrmpAcceptOpenChannel(sender: 2011) , second call is hrmp.hrmpInitOpenChannel(recipient: 2011, proposedMaxCapacity: 1000, proposedMaxMessageSize: 102400) , so the final batch call hex-encoded as 0x1a00083c01db0700003c00db070000e803000000900100

For step 5: hrmp.hrmpAcceptOpenChannel(sender: 2006) , which hex-encoded as 0x3c01d6070000

The proposedMaxCapacity and proposedMaxMessageSize are set to the values of Polkadot’s configuration.activeConfig.hrmpChannelMaxCapacity and configuration.activeConfig.hrmpChannelMaxMessageSize values, respectively.

These extrinsics need to be called with the parachain’s sovereign account as the origin. To achieve this, on the Equilibrium side we will use polkadot-xcm pallet to send XCM messages to the relay chain, by executing the following extrinsic from the parachain. Astar Network should make an open request call and an accept request call with its pallet.

As a prerequisite, the parachain’s sovereign account must contain at least 10 DOT to be locked as collateral (5 for each channel direction), plus some DOT to pay for XCM execution fees.

12 Likes

I think this will benefit both parachains. Realizing the interoperability is something we must achieve.

I support this proposal.

5 Likes

Great proposal. Thank you so much!

2 Likes

I definitely support it

2 Likes

Interoperability between parachains is key for polkadot!
I support this proposal.

2 Likes

100% support this proposal! Interoperability between Parachains is the key for Web 3.0

1 Like

There is nothing to deal with here, the combination of parachains is one of the greatest successes we can do in the Polkadot ecosystem.

Let’s do IT!

1 Like

Thanks all for the great support! Both Astar and Equilibrium will continue to work hard towards bringing more cross-chain use cases to the community, by leveraging on the interoperability of Polkadot via XCM integration !

I do agree with all comments here. It would also be great to think about use-cases in the Astar Ecosystem. This proposal describes the value for Equilibrium, but what will bring Equilibrium to the protocols building on Astar?

2 Likes

I definitely support this proposal. Very important to open more channels and provide liquidity and interoperability between all parachains.

Cross-chain assets flow is what we all need. Full support. But as Maarten mentioned, it would be great to see some proposals on how Equilibrium will bring value inside the Astar ecosystem.

Hey Maarten and Stakenode.dev,

Thanks a lot for the question! Here are some of the example use cases:

  1. DeFi protocols built within Astar ecosystem could have EQD as an additional option/ choice of stablecoin. EQD being Equilibrium’s overcollateralized asset-backed stablecoin can be a good alternative as it is Substrate-native, which means no extra bridges required and therefore more secured.
    It is always good to have more choices/ a variety of stablecoins, as they serve as good quality collateral that are essential for DeFi protocols. Stablecoins as collateral also enhances capital efficiency.
    Similarly, stablecoins issued by DeFi protocols on Astar could also be used on Equilibrium as collateral, which would in turn increase utilities of Astar’s native stablecoins. We are actively looking ways to enhance synergetic collaboration between projects!

  2. DeFi protocols built within Astar ecosystem could also accept Equilibrium’s soon-to-launch stableswap pool’s LP tokens as collateral for borrowing activities on their platforms. This could also serve as a good quality choice of collateral for DeFi platforms.
    Similarly, if accepted by DeFi protocols on Astar, Equilibrium’s stableswap LP tokens could also be used to mint more Astar’s native stablecoins. Again, we are open to synergetic collaborations!

  3. Users from Equilibrium and Genshiro could also bring over EQD and/or LP tokens to protocols on Astar for applications not offered by Equilibrium, for example, NFT marketplace, GameFi or swapping into other assets or stablecoins that are not found on Equilibrium!

  4. Also, given sufficient liquidity, users have the option/ choice to trade ASTR on a CEX-like DEX, but in a decentralized manner of course! We think Equilibrium’s fully on-chain orderbook DEX is a really unique product within DotSama ecosystem, and we have put in a lot of engineering efforts behind this. Users are able to enjoy features offered by typical CEXs such as putting limit orders and charting, while having full control of their funds and accounts.

Above are some of the examples on how Equilibrium can bring value to users and protocols built on Astar. Happy to hear feedback from the Astar community!

4 Likes