Chain Abstraction: Technical Paper
Arcana
IT
Posted on Jun 1, 2025
Chain Abstraction: Technical Paper
Arcana’s Chain Abstraction (CA) enables instant, bridgeless transactions in Web3 apps. It solves the liquidity fragmentation in users’ EoA wallet caused by the proliferation of L2 chains.
The protocol is a trust-minimized, scalable system built on the Cosmos app chain infrastructure. It uses intent-based fulfillment for instant liquidity via simple, pluggable FCFS solvers—no auctions are required.
Developers can integrate the protocol into Web3 apps through the Chain Abstraction SDK.
This paper explains how Arcana’s solution lets users view and spend their unified balance across chains.
Contents
Introduction
The emergence of L1 and L2 blockchains has fragmented liquidity, blockchain assets, and user states, presenting challenges for users seeking access to newer applications or chains. Users are forced to navigate complex blockchain processes, bridge funds, or acquire native tokens, assuming they know how to obtain the necessary assets efficiently using the available liquidity in their EOA wallets. This situation leads to increased user onboarding friction, reduced retention rates, and limited application growth for developers..
Arcana’s Chain Abstraction SDK enables Web3 developers to provide a unified balance for users. This simplifies onboarding, reduces drop-offs, and offers a more connected Web3 experience. Unlike other solutions, Arcana’s CA protocol does not require users to have a new address or a smart account. It works with EOA wallets and doesn’t require swaps, bridges, or custody risks, making it ideal for developers building chain-agnostic apps.
Concepts
This section defines key terms to clarify the challenges, solutions, and Arcana’s chain abstraction architecture, ensuring readers are aligned with the concepts discussed in the following sections.
Intent
An intent is a problem statement that expresses the user’s transaction goals without specifying how to achieve them.
Example: "In my EoA, I have 10 USDC on Optimism and 20 USDC on Arbitrum, and I want to send 25 USDC to the Polygon address 0xnnn.”
Allowances
Allowances enable users of the Web3 app to activate the unified balance feature for any cross-chain transaction. This feature unlocks fragmented liquidity across source chains and allows users to spend it on any destination chain, even if it lacks sufficient balance.
Users can set up allowances anytime before initiating a multi-chain transaction. By doing so, they permit Arcana Vault contracts on the source chains to collect the funds required to execute the transaction seamlessly on the destination chain.
Once a unified balance is available on the source chains, users can request funds on the destination chain.
Vault
A vault is a smart contract deployed by Arcana on each supported chain. It stores user funds on one or more source chains after the user signs a cross-chain intent and prevents double-spending. While each vault handles funds on its respective chain, multiple vaults across different chains participate in the Arcana CA protocol, creating a unified balance view for the user. Vault guarantees fund availability to the solver and releases escrowed funds during settlement.
Solver
A solver is a lightweight program that monitors a channel for cross-chain intents posted by the Arcana Network Chain Abstraction protocol. An ideal system has multiple solvers that race to fulfill the intents broadcast by the CA protocol. It is an FCFS system, and the first solver to fulfill the intent wins. Any later transactions automatically revert, ensuring only one solver fulfills a user intent.
Solvers can choose which routes they support and the preferred fees for each route. They can also rebalance their liquidity portfolio, if required.
Validator
Validators run the core chain abstraction protocol using the Arcana Network Cosmos-based node. Each validator:
Manages a shared state machine that tracks user intents, deposits, fulfilments, solver settlements.
Observes events from the vault contract on each supported chain, watching for deposits and fulfilments in particular, bringing off-chain data onto the Cosmos state through the ABCI 2.0's Vote Extension feature. This is secured through the validator’s stake.
Verifies and signs off on settlement transactions using MPC-TSS. A threshold number of validators have to sign off on the settlement for it to be valid.
Fill
Fill refers to the process of fulfilling a user’s intent by the solver. The solver first checks if the user has escrowed funds in the vault. Once confirmed, the solver fulfills the intent by transferring the requested tokens to the destination chain, as specified.
Settlement
Settlement is the process of releasing the funds escrowed by the user in the respective Arcana vault of one or more source chains. The funds release is initiated only when the following conditions are met:
A solver has fulfilled the intent on the destination chain
A Cosmos node observes the fulfillment event on the destination chain
A threshold number of validator nodes independently verify this fact and create a settlement through a stake-weighted vote.
Refund
A refund returns escrowed user funds from the Arcana vault if no solver fulfills the intent within the set time or if a transaction fails. Arcana Network covers the gas fees, not the user.
Rebalancing
Solvers supply liquidity across different chains and token combinations, known as routes. For example, Solver A may initially hold 100 ETH on Arbitrum One and 50 ETH on Optimism. After fulfilling a few intents, their portfolio may change to 75 ETH on Arbitrum One, 75 ETH on Optimism, and 30 ETH on Base. Through rebalancing, solvers adjust the liquidity ratio across chains to match configured targets. After rebalancing based on solver preferences, their portfolio may shift to 100 ETH on Arbitrum One, 50 ETH on Optimism, and 3 ETH on Base.
The Challenge
In typical chain abstraction solutions, users express transaction intent across multiple chains, with solvers and third parties competing to fulfill it for a fee. Most solutions either generalize intent to cover more use cases or build complex solvers for high-frequency, high-volume transactions. These specialized approaches cater to the crypto elite but clearly fall short of onboarding the following billion users. What will drive adoption for the broader audience facing liquidity fragmentation is a secure, simple solution that gets the job done effectively.
The Arcana Chain Abstraction protocol addresses key objectives that specialized CA solutions and alternatives like bridging don't effectively handle today:
Complex UX: Cross-chain transactions are often slow and involve too many steps. Managing multiple chains complicates the user experience, especially when using bridges to convert funds or onboarding new chains without native tokens to pay for gas.
Liquidity Fragmentation: Low Total Value Locked (TVL) on new blockchains increases hidden DeFi costs. Funds are scattered across chains, making quick, reliable liquidity access difficult and time-consuming. Users need a clear, unified view of their spending limit across chains.
Centralization Risk: Intent-based systems on PoS chains risk centralization instead of promoting true decentralization. With fewer solvers and more prominent players using advanced algorithms, those with higher stakes dominate the network, leading to a small group capturing value. Onboarding solvers is challenging, with barriers like staking requirements, permissioned systems, constant rebalancing to handle multi-chain intents, and high fixed costs.
Mid-tier Bulk: When engaging with multi-chain transactions, users encounter intermediaries such as bundlers, paymasters, relayers, market makers, and auction managers. In addition to delays from these interactions, users face hurdles like security concerns, fees, and potential centralization risks. Streamlining and optimizing this mid-tier and minimizing friction points for essential entities is vital for smooth multi-chain transactions.
Key Solution Differentiators
Achieving chain abstraction focuses on user intents, solvers, and settlement. What’s needed is:
Instant Liquidity Access: Seamless spending of fragmented assets across chains.
Reliable Settlement: Secure, trusted, and verifiable fee settlement to solvers based on agreed terms.
Our protocol separates the settlement process from fulfillment, improving gas efficiency and speed while ensuring decentralization and verification guarantees.
Benefits of our Approach
Fast Fill: The protocol optimizes for cost and speed, focusing on simplicity and efficiency. A permissionless set of solvers handles routing and transaction optimization.
Better UX: There are no more bridges, route hunting, or reliance on centralized entities. Users have complete control to execute secure, multi-chain transactions with a single click, making the process faster, more straightforward, and more intuitive.
Decentralized, Simple Solvers: Arcana provides a solver and allows third parties to become solvers. They can participate in fulfilling user intents and earn revenue by supporting multi-chain routes. Solvers gain from Arcana's approach through:
Plug-and-play model, making it easy to become a solver
Low barrier to entry with minimal capital requirements
No auction system, rewarding speed over sophistication
Reduces oligopoly by limiting deep-pocketed players' dominance
Democratizes the process—the fastest solver wins
More solvers boost capital efficiency and lower fees for users
Gas Efficiency: The protocol is designed for near-optimal gas efficiency. Most of the gas is consumed only when the necessary conditions are met, and the intents are executed.
Architecture
Arcana’s Chain Abstraction protocol prioritizes user experience by separating intent fulfillment from the solver settlement process. This division streamlines and speeds up the cross-chain experience while optimizing resources. It ensures decentralization and verification for complex solver settlements, all without compromising user experience or security.
How does it work?
Arcana Network’s chain abstraction protocol focuses on rapid intent fulfillment, which is divided into three phases:
Intent Collection
Intent Deposit and Fulfillment
Intent Settlement
To enable chain abstraction in a Web3 app, the Arcana chain abstraction protocol requires the following configuration details from the user and the participating solvers.
Configuration
User:
Select Chains: Choose chains to be abstracted (one-time setup).
Set Allowance Thresholds: Permit the Arcana vault to pull funds from the user’s EoA for settlement or refunds and cover gas fees if needed.
Solver:
Specify Routes and liquidity thresholds, service fees
Specify rebalancing targets
Run the solver service to fulfill intents
CA Protocol
The Arcana CA protocol starts when the user submits a signed intent that involves a cross-chain transaction.
Each user intent specifies the following:
The funds available in the source chains