Contractland: Decentralized Exchange

Contractland is a fully decentralized crypto exchange that allows users to transfer assets from BTC and ETH blockchains to the blockchain of Contractland. The platform was based on its own private blockchain, which was faster than Ethereum.

ContractLand was looking for proficient contributors to web3. At that time we already have huge expertise working with both private and public blockchains. After a few technical discussions, the ContractLand team decided to collaborate with 4ire Labs.

The goal was to build the infrastructure that would provide liquidity of tokenized assets across various blockchains through high performing multi-chain technology.

Challenge

Exchange is a platform with an algorithm that matches deals. The main issue is related to traders’ risks. When users need to change any assets, they should transfer money from their wallets to the platform. In case there are some issues with the platform, it doesn’t work or simply it’s hacked, a trader loses money.

At this point, decentralized exchanges allow traders to transfer their money in a more secure way. The main advantage of decentralized exchanges is that it doesn’t have a server with all the data, thus it’s difficult to block it.

Our role

4ire Labs team took part in the architecture vision and the development of the Terra Bridge protocol. This protocol is used for interchain transfers between Ethereum and Bitcoin.

Such transfers may be used in the following cases: 

• For stable coins
• In decentralized exchanges
• In financial derivatives 

While designing the bridge, our specialists decided to focus on the three most important things:

• Two-way transfer support 
• Standardized Interface which allows easy integration
• Permissionless 

Terra-Bridge design includes the following parts: 

Home – The chain where users can exchange external assets onto in the form of pegged tokens

Foreign – The chain for exchanging assets from and onto the Home

Bridge – The system for performing message relay, verification, and hold/release of assets between users on home and foreign.

Validator – Role that runs bridge client (as miners of Proof-of-Work chains).

How it works

The bridge has a two-way pegging structure. It works with a rotating validator set and two bridge contracts. The bridge contracts remain on the home and foreign chains (home-bridge and foreign-bridge).

The contracts functionality of the bridge consists of:

• ability to accept and lock funds
• verification of  the signature of cross-chain transactions, which are incoming
• realization of token to user address on successful transfers

The relay of messages between the bridges on different chains happens in a byzantine fault-tolerant way by the bridge validators.

Our architects visualized the process of Foreign-Home and Home-Foreign Transfer flow:

All the processes were described on GitHub, you can take a look here.

Now Terra-bridge is successfully used for interchain transfers. 4ire Labs team is open for similar projects, as we’re striving to provide innovative solutions for the blockchain community. If you’d like to discuss your idea and methods of blockchain implementation, contact us to discover more.