While the possibility of switching between circuits cheaply and desperately is strong, we're only scratching the surface of what Connext can build on. With more chain integration and asset maintenance comes a wider network of protocols across the chain, as well as cross-chain use cases that are still unexplored, such as AMM, farm extraction, arbitrage, cash flow, best rates, profitability, and lending rates in many chains.
NXTP is a core layer protocol – similar to TCP/IP – that allows the simplest actions such as cross chain liquidity transfers and call contracts.
It is a developer-oriented infrastructure with SDK to build. Protocols can eventually be upgraded to more complex inter-circuit communication, depending on what other tools are available and what circuits communicate with each other.
For example, Li Finance teamed up with Connext to build a cross-chain DEX aggregator that allows users to trade assets regardless of which chain, only getting them at the best prices. Li Finance can join Uniswap in Chain A, trade, route liquidity via NXTP, and call Uniswap in Chain B: users exchange assets between chains without making transactions on the chain!
Decentralized router deployment and liquidity scaling. Connect is currently piloting routers and gradually rolling out new routers to ensure the protocols work as intended before releasing them to the general public.
Separation of liquidity provision from router operations. It introduces a delegated mechanism where liquidity providers can bet on routers and earn a portion of their fees.
Supports the next layer of the stack for interoperability. With Connext as a secure and extensible layer of interoperability, new protocols can be built on top of the protocol to add more functionality or optimize for more targeted use cases, such as cheaper transfers and more aggregation.