Across Overview

The crypto industry is becoming increasingly fragmented as more rollups and L1 chains launch, siphoning users and liquidity from other ecosystems while creating inefficiencies. To help combat against siloed ecosystems, many interoperability solutions have launched to make cross-chain transacting more intuitive. Many of these solutions are based on cross-chain messaging or multi-chain liquidity pools. Most solutions have struggled to solve for speed, cost, and security, often making tradeoffs in one category for another.

Across is an interoperability protocol powered by intents. Across has three main products to support blockchain interoperability:

• Across Bridge – an intents-based bridge where users can transfer assets quickly and securely across seven EVM chains.
• Across+ – a bridge abstraction framework that allows dapps to integrate Across into their protocol, enabling bridging and protocol actions within the same transaction.
• Across Settlement – a settlement layer built for cross-chain intents.

Across Bridge

Many cross-chain messaging designs are ineffective due to slow transfer finalization and high costs, while other designs like cross-chain AMMs make security tradeoffs. Across uses an intents-based design where users specify the outcome of a transaction rather than an execution path.

Intents are a novel transaction type that introduce third-party relayers who compete to execute cross-chain transactions quickly. Relayers loan their own capital to fill the order minus a “relayer fee” on the destination chain, and the initiator’s funds get escrowed until the intent is verified as complete. Once verified, the relayer is repaid from the Across liquidity pool.

Intents decouple filling orders and verifying transactions, allowing for instantaneous asset delivery and slower transaction verification, which tends to be cheaper and more secure. Additionally, Across’ intents-based bridging shifts capital risk from users onto relayers as they loan their own liquidity for the period between filling the order and verification. Since the transaction is immediately filled, there is less of a rush to verify the transaction compared to when an end-user’s capital is tied up.

If no relayers take a request, Across fills the order via its LP pool as a liquidity source of last resort. Across uses a single liquidity pool, which allows relayers to select which chain they’d like to receive fees on and increases capital efficiency as users are not limited to liquidity on destination chains.  

Typical transactions usually complete within 1-4 minutes assuming a “fast fill” from a relayer. “Slow fills” occur when no relayers fill the deposit, at which point liquidity is sourced from Across’ liquidity pools as a last resort.

Across+

Beyond a better and more secure bridging experience, Across+ is a chain abstraction tool, allowing dapps to create a web2-like experience by connecting users to the application level compared to the blockchain level. Across+ uses “hooks” to enable unique functionalities and benefits including:

• Liquidity Bootstrapping – Protocols can secure TVL and consolidate capital on a single chain using Across+, Bridge, and LP bundled functions, attracting liquidity from any chain and sidestepping elaborate multichain deployments.
• Wider User-Base – Users can deposit capital from any chain without having to think about bridging before interacting with protocols, reducing friction between blockchain ecosystems, and making dapps more accessible.
• Improved UX – Users can make cross-chain deposits with a single signature and reduce the learning curve of navigating to new chains and avoiding scams.

Across+ provides protocols with a large step forward in user-experience and an innovative way to access liquidity and users across multiple chains, alleviating the common pain points of liquidity fragmentation and clunky UX.

Across Settlement

Across Settlement is a cross-chain settlement layer for all intent order flow. Dapps across different chains can submit intent order flow to Across’ relayer network and be settled on Across Settlement. Across Settlement was optimized for RFQ order flow to offer best-execution cross-chain swaps. It bundles settlements into singular cost-saving messages that are optimistically verified. Across Settlement’s modular and efficient design has helped it settle over $8 billion in transactional value over more than four million transactions. As more dapps begin to leverage intents-based transactions, Across Settlement’s growth should accelerate.

To dovetail with Across Settlement, Across has partnered with Uniswap to create a new standard for cross-chain intents to establish a unified framework for apps to leverage. They have jointly published the framework to the Ethereum Request for Comment (ERC) forum and initiated the process of creating a new ERC standard. If approved, the standard will make it easy for any protocol using the standard to route orders through Across’ filler network, bringing efficiency and cost effectiveness to the whole ecosystem. Fillers would have a lower barrier to entry, lower costs, and more order flow. Applications could route through a more extensive and competitive network, and users get faster fills and lower costs. 

Tokenomics

ACX is the governance token of the Across protocol. Holding ACX allows users to participate in governance proposals and manage the DAO’s treasury. ACX launched in November 2022 and has a total supply of 1 billion. Across currently has a circulating supply of 359,411,635 and trades at $0.236, giving it a circulating market capitalization of $84.9 million and an FDV of $236.1 million. In November 2022, Across completed a private token sale, raising $10 million at a $200 million valuation from Blockchain Capital, Hack VC, and Placeholder Ventures.

Valuation

Across has been growing in popularity as the benefits of chain abstraction and intents-based architecture have started to get noticed by users and protocols. Transfer volume has been steadily rising with March representing Across’ first month facilitating over $1 billion in transactional volume and April exceeding $900 million.

Active users have been following a similar trajectory, surpassing 300k in April as it becomes the bridge of choice for many investors.

Both metrics paint an optimistic picture of Across’ trajectory and display the protocol’s growing popularity. In our view, as an interoperability protocol, transfer volume is the more important metric to focus on when comparing against competitors. Value should be derived from how often the tool is being used and in what quantity, similar to how total payment volume (TPV) is a relevant metric for traditional payment companies like PayPal, Visa, and Mastercard. Total transfer volume with respect to current valuations should offer a framework for evaluating Across against other interoperability protocols.

All Across’ metrics appear to be trending upwards and have surpassed many of its competitors, but despite that, it still trails from a valuation perspective. 

Over the last 30 days, Across has facilitated $910 million in transfer volume, putting it behind only THORChain by a small margin. When comparing transfer volumes against relative valuations, Across is significantly undervalued. The competitor group’s average Price / Transfer Volume is 0.30, and the median is 0.19, while Across’ is 0.021. Applying the average or median multiple to Across implies a valuation range of $2.10 – $3.35 billion, representing a 7.9x-13.2x return from current levels.

Given the outsized number of users Across has accumulated compared to competitors, the positive trend of transfer volume, and its innovations as one of the leaders in the intents-based interoperability sector, an average multiple is likely a conservative estimate for Across.

As outlined earlier in this report, the benefits of Across+ and Across Settlement should fuel further growth in Across’ volumes as other projects begin to build on top of Across, moving it beyond a simple bridge and more akin to a base interoperability layer. For that reason, we believe Across should be valued more similarly to Wormhole or LayerZero.  

If Across commanded a similar multiple to Wormhole (0.75), Across would trade at a valuation of over $8 billion – a 34x return. It is more likely that Wormhole is overvalued, but the larger point is that Across is facilitating more volume through its protocol relative to its valuation than any of its competitors. 

Additionally, if Across and Uniswap successfully create a new standard for intents-based transactions, it is likely that Across becomes a market leader in cross-chain integrations given its battle-tested architecture and the additional brand recognition that will come from being partnered with Uniswap.

Risks

One of the larger risks is the competitive nature of the interoperability sector. There are a wide array of protocols competing to win cross-chain market share. Across is trending in the right direction and appears to be gaining market share, but with that said, Across is only compatible with seven EVM chains whereas some of its competitors are integrated across 20+ chains, which could give them an advantage. With that said, Across will likely continue to add more chain integrations; the Lisk Network just submitted a proposal to add Across as its bridge of choice.

Smart contract risk is inherent in most protocols and historically bridge smart contracts have shown to be more vulnerable. Many of the bridge exploits have occurred when protocols use “representative assets” which involves locking ETH on chain A and minting xETH on chain B. Across uses canonical assets meaning there is no synthetic asset counterpart that can lose parity or be infinitely minted. Canonical bridging doesn’t ask users to trust a new asset and relayers have to bear risk on behalf of end-users. The canonical asset model is a security improvement compared to more traditional models, although this does not mean Across is immune to potential exploits.

The ACX token is a governance token and is not inherently useful in terms of accruing fees or being needed to access Across’ products. This can always change (via governance) and there is still value in controlling a protocol that facilitates billions of dollars in transactions per year.

Conclusion

Across is an intents-based interoperability protocol facilitating almost a billion dollars of transfer volume per month. As one of the first intents-based bridges, it has seen impressive growth in both transfer volume and users, surpassing most of the other well-known names in the sector. When comparing its transfer volume to its valuation, it is highly undervalued. Applying the median or average competitor group multiple implies an FDV range of $2.10 – $3.35 billion, representing an 7.9x-13.2x return from current levels. Given the positive trends in key metrics and the growth potential Across+ and Across Settlement can produce, in our view, Across appears well-positioned to capture significant upside.