Abstract

In recent years, there has been an increase in the number of layer 1 and layer 2 networks designed to address Ethereum's scalability constraints. These solutions have played a vital role in onboarding an increasing number of users onto the DeFi ecosystem by reducing gas costs and improving network throughput. However, the proliferation of such networks has meant that most of the action is now fragmented across these networks instead of being concentrated on a single network such as Ethereum. This has resulted in a series of unconnected blockchain ecosystems operating alongside but siloed from each other, preventing the industry from reaching its full potential. To address this issue, what is required, it seems, is a mechanism that facilitates interoperability among these networks, i.e., a mechanism that enables these networks to communicate and share data with each other.

Towards this end, we introduce Router Protocol, a mechanism for cross-chain communication that will initially focus on the specific use case of bridging assets across multiple layer 1 and layer 2 networks by using stablecoins as the medium of value transfer. In addition to asset transfers, Router Protocol also enables the flow of arbitrary messages across chains securely and seamlessly, thereby extending the composability of DeFi across various blockchains.