Technical Architecture

Currently, Owlto implements a hybrid solution to satisfy users’ diversified demands. For small amount transactions, it utilizes liquidity solutions, in conjunction with Entry and Locking Smart Contracts, achieving fast bridging transactions with efficiency and cost-effective advantages. For larger amount transactions, Owlto offers: 2a) integrated Circle's CCTP and Chainlink's CCIP to ensure the highest level of decentralization and security. 2b) Furthermore, Owlto is developing a settlement network based on the EigenLayer named Owlto Instant Interoperability Protocol (OIIP), utilizing EigenLayer's restaking and Ethereum's POS mechanisms to guarantee asset security and decentralization.

The technical architecture and workings of an cross chain protocol is described as follows: this includes the communication mechanism between the Layer 2 networks directly, as well as the asset locking and unlocking mechanisms. The technical measures taken to ensure asset security and prevent double-spending attacks are highlighted. It is built on a Layer 2 scaling solution that improves the speed and scalability of transactions while still maintaining the security of the underlying blockchain. The product relies on Rollups, which are Layer 2 scaling solutions that allow for the processing of a large number of transactions in a single batch before submitting the batch to the Ethereum main chain for verification. This process reduces the amount of data that must be processed on the Ethereum mainnet, resulting in faster transaction speeds and lower fees.

In terms of cross chain communication, the Rollup and the Ethereum mainnet use a two-way pegging mechanism to maintain consistency between the two networks. This means that assets can be locked on the Ethereum mainnet and then unlocked on the Layer 2 networks, or vice versa. This is achieved through the use of smart contracts that hold the locked assets until they are unlocked on the other chain.

To prevent double-spending attacks, the Cross-Rollup product employs various technical measures, including fraud-proof mechanisms and signature verification. Fraud-proof mechanisms detect and prevent invalid transactions by allowing users to submit proof of fraud to the system. Signature verification ensures that only the owner of an asset can initiate a transaction, preventing unauthorized use.

Overall, the technical architecture of the Cross-Chain Protocol is designed to provide faster and more scalable transactions while still maintaining the security of the underlying blockchain. The product's communication and asset locking mechanisms, as well as its various fraud prevention measures, all work together to ensure the safety of users' assets and prevent any malicious attacks.

Besides, Owlto's modular interoperability protocol will be continuously developed. Owlto Finance offers Owlto Bridge-as-a-Service (OBaaS), a hybrid cross-chain solution that covers various assets, including native tokens and non-native assets such as staking (LST) and re-staking (LRT) tokens, providing bridging services for Bitcoin and Ethereum Layer 2 networks. Additionally, Owlto will implement Omnichain Liquidity Solution V2 for DApps, who can directly utilize Owlto Finance's SDK, API, or smart contracts to facilitate non-custodial cross-chain transactions, eliminating the need to deploy their own multi-chain liquidity.