Forward the Original Title: 2025 A Fresh Start: Analysis of Chain Abstraction Landscape and the Prolonged Battle of On-Chain Trading Paradigm Shift

2024 is undoubtedly the first year of chain abstraction. We have witnessed the development of this narrative from scratch to the launch of the product. After 12 months of hard work, experience has proven to us that neither the theory that chain abstraction is useless nor the theory that chain abstraction is a quick win is wrong. The transformation of the on-chain transaction paradigm is bound to be a protracted battle.

My Journey: From Chain Abstraction Researcher to Builder

My interest in chain abstractions originated in July and @coin_casanova I was working as a researcher at Mint Ventures at the time. I gained a small wave of attention with a few research reports, and this is how I started chatting with casa.

One day, Casa suggested that I look into it. $ACX (Across Protocol’s token was listed on Binance in the last month of 2024). At first glance, I thought it was a cross-chain bridge, and I felt it was a relic from the previous cycle, but after taking a closer look, I found that Across uses an “intent-based architecture” and is really faster than other cross-chain solutions. For speed and lower price, the Across team also cooperated with Uniswap to launch the cross-chain intent standard ERC-7683.

As I delved deeper into $ACX, I found myself falling down a rabbit hole of new concepts: cross-chain bridges, cross-chain communication, interoperability, intent, chain abstraction… It was overwhelming. As a researcher, I’m very particular about the definitions and usage of concepts, but at the time, I couldn’t find any articles—whether in Chinese or English—that could help clarify these relationships. So, I rolled up my sleeves and wrote one myself: “Using Problems as Methods: A New Framework for Understanding Chain Abstraction.”

I chose “chain abstraction” over cross-chain or interoperability as my research focus because, in my categorization, chain abstraction is a high-dimensional narrative encompassing various specific technical paths. Thus, I included cross-chain and interoperability within the domain of chain abstraction. In this report, I emphasized my optimism about intent-based architectures and user-facing chain abstraction solutions. Following the threads, one could trace upward to Across Protocol or dig downward to the recently launched UniversalX @UseUniversalX.

Interestingly, during the writing of this report, I came across Particle Network’s blog posts (@CarlosCanCab, @TABASCOweb3), which covered highly professional research on chain abstraction. Along with Li.Fi’s blog posts (@arjunnchand), these resources helped me piece together the foundational knowledge, from the most traditional cross-chain bridges to the latest advancements in chain abstraction. I was delighted to include Particle Network in my diagram of chain abstraction projects.

In October, the CEO of Particle Network, @0xpengyu, reached out to me through mutual contacts. After an honest yet intellectually stimulating discussion, my enthusiasm for the chain abstraction field surged to the point where I felt compelled to get directly involved. With the wheels of fate turning in my favor, I joined Particle Network. I now work as a researcher while also leading the development of the Chinese community.

Two Counterarguments: “Chain Abstraction is Useless” is Incorrect, and So is “Instant Victory”

My research journey at Particle Network began with a series titled “Clearing Misunderstandings.” This was necessary because, while chain abstraction is already a well-established field in the West, much of the research and concepts have yet to be systematically disseminated in the Chinese-speaking community. This gap has led to numerous misunderstandings derived from a literal interpretation of the term. To address this, I wrote four consecutive articles that outlined nine common misconceptions about chain abstraction (e.g., comparisons with cross-chain bridges, intents, multi-chain wallets) and provided a formal definition.

• “Common misunderstandings about “chain abstraction” (1)”
• “Common Misunderstandings About “Chain Abstraction” (2)”
• “Common Misunderstandings About “Chain Abstraction” (3)”
• “What exactly is the chain abstraction?” A formal definition

Refuting “Chain Abstraction is Useless”

These articles later became a gateway and driving force for me to join and participate in discussions about chain abstraction. As expected, promoting a new narrative of chain abstraction in a market largely indifferent to narratives initially attracted criticisms labeled as “chain abstraction is useless.” The opinions of this group are summarized in the common misconceptions I analyzed: “I understand chain abstraction; isn’t it just xxx… old wine in a new bottle… not really necessary.”

The reason why “chain abstraction is useless” is incorrect lies in the narrow, mechanical, and static perspective these critics adopt. They equate chain abstraction with things they’ve previously encountered and are familiar with, and, without understanding the evolution of the field, refuse to recognize its innovations and advancements.

This misconception can be further divided into two categories:

One type is a fundamental error. These errors reflect systemic biases and blind spots. The most representative belief is that Web3 will only have one or two blockchains in the future. The response to this is simple: you can’t build the entire Web3 ecosystem on a single state machine. However, addressing these viewpoints is challenging because they fundamentally reject possibilities beyond their existing investments.

Another type is accidental errors. These errors occur when chain abstraction is confused with multi-chain wallets, cross-chain bridges, or intents. Such misconceptions can typically be resolved by reading my articles, which underscores the primary value of our ongoing efforts to educate people about chain abstraction.

Refuting “Instant Victory for Chain Abstraction”

As the chain abstraction narrative advanced and leading projects like Near, Uniswap, Safe, and Particle Network made progress in delivering chain abstraction products, the concept garnered significant attention from both centralized exchanges (CEXs) and their users. By the end of 2024, chain abstraction experienced a surge in popularity, seemingly becoming a universally accepted notion of “the future.” However, beneath the hype, we observed another emerging issue: the notion of “instant victory for chain abstraction.”

Specifically, some people underestimate the objective technical difficulty of realizing chain abstraction and ignore that chain abstraction is a complex and systematic project that involves the re-architecture and optimization of infrastructure, middleware, application layers, etc. In essence, they still hold the backward concept that “chain abstraction is just a repackaging of xxx”, so they have unrealistically optimistic ideas about the popularity of chain abstraction——Project xxx can also be done, but I haven’t done it yet. It will be done very quickly.

There are also some people who admit that chain abstraction is a track with barriers, but they are too pessimistic about the players in the current market, so they turn to the wallet team of the exchange.”End” “Dimensionality Reduction Strike”, quickly unified the market.They do not understand that chain abstraction is never an isolated infra narrative, nor is it a simple stack of features. It is a traceable process as infrastructure such as AA, modularity, solver networks, AltVM, and Appchain are brewing and maturing. It is a mature track and the top players here have a deep accumulation.

To summarize the problem:

Is the chain abstraction useless? No.This kind of thinking is a short-sighted mistake, blinding one’s vision. Chain abstraction will eventually be implemented.

So can the chain abstraction win quickly? No.This kind of thinking makes the mistake of farsightedness again, thinking that you are in a superior position. The transformation of the on-chain transaction paradigm represented by chain abstraction is a protracted battle.

Phase Analysis: Why the Transformation of On-Chain Transaction Paradigms is a Long Battle

General and Specific Contradictions

Let’s start with the general contradiction. Like all forms of transitions between old and new systems, the adoption of chain abstraction applications takes time, and the migration of on-chain transaction paradigms requires time as well. During this process, we will see the outdated and fragmented multi-chain ecosystems becoming increasingly unsustainable. Applications built on top of these ecosystems will face growing bottlenecks, while a rising number of dApps adopting chain abstraction architectures will emerge. Gradually, chain abstraction will become the standard configuration for almost all on-chain scenarios, and in at least one specific scenario, the potential of chain abstraction combined with dApps will fully explode.

Having discussed generality, let’s delve into the specificity of chain abstraction + on-chain transactions. Why do we believe that transaction scenarios are the breakthrough opportunity for chain abstraction? This scenario, much like the adult industry in Web2, has always been the first application point for emerging technologies (VR, AR, mobile internet, AI). The reconstruction of Web3 transaction scenarios is the most anticipated native narrative of 2025. The greatest opportunity lies in the possibility of a fully on-chain centralized exchange (CEX) enabled by chain abstraction. A next-generation on-chain trading platform requires the following three elements, all of which are indispensable: Permission-free DEX assets + self-custody accounts + CEX-level liquidity experience = next-generation on-chain trading platform. All three requirements are indispensable.

The Case for a Long Battle and its Stages

Some may ask, how long will this long battle last? If the logic of chain abstraction is so compelling, when will it break out? No one can provide a definitive answer, but we can analyze the forces involved and monitor their evolution over time.

First, we must acknowledge that the transformation of on-chain transaction paradigms depends on the sustained prosperity of new on-chain assets and new users. This cycle, beginning with platforms like Pump.fun, has seen an explosion of on-chain assets, with Meme and AI agents providing abundant speculative opportunities and wealth creation. Users are beginning to migrate from centralized exchanges (CEXs) to on-chain platforms. At this stage, the primary contradiction becomes the mismatch between the rapidly growing demand for transactions driven by asset explosions and the “editor-curated” listing model of centralized exchanges, which fails to cover hot trends in a timely and comprehensive manner. In terms of spot trading appeal, Trading Bots, DEX aggregators, and wallet-integrated trading functions are siphoning users from Tier 1 and below centralized exchanges.

However, it is premature to declare that DEXs will entirely replace CEXs. Tier 1 exchanges still hold a strong advantage in spot trading credit and deep liquidity, and perpetual trading remains a significant revenue stream for most CEXs. Binance users, for example, don’t all need to switch to on-chain platforms for the company to remain profitable.

Additionally, as “fat applications” gradually replace “fat protocols,” more applications will launch using Appchains or App Rollups. A multi-chain future is inevitable. However, the current fragmented and broken multi-chain environment significantly hinders users from exploring and managing multi-chain assets. Despite progress in Account Abstraction (AA) and interoperability protocols within various ecosystems, user education, developer onboarding, and product adoption are far from instant solutions.

Although the direction of richer on-chain assets, user migration to on-chain platforms, and a multi-chain future is clear, the situations during this transition will remain fluid. Nonetheless, by identifying the trends, we can pinpoint the core value proposition of chain abstraction products: seamlessly connecting and unlocking the potential of the multi-chain world, including liquidity, users, and developers. For example, UniversalX’s fundamental competitive advantage lies in its liquidity layer. By focusing on this, we can target the most promising multi-chain trading user base and convert them into UniversalX’s most loyal users. (Guess how many times I’ve recently heard feedback along the lines of “After using UniversalX, I can’t go back to anything else.”)

Chain Abstraction Exchanges as the Endgame

Why will time ultimately favor chain abstraction exchanges like UniversalX over multi-chain wallets, trading bots, and aggregators? Let’s break it down:

First is the non-custodial attribute, which is relative to Trading Bot’s custodial wallet. While custodial wallets are not inherently bad or destined to disappear, they cannot exist in isolation. Users will ultimately need to transfer assets to non-custodial wallets. With the growing awareness of on-chain security, we believe that products emphasizing non-custodial attributes will become increasingly prevalent.

Next is the attribute of chain abstraction, which sets it apart from multi-chain wallets and aggregators. Currently, most multi-chain wallets merely “connect” to multiple chains, serving as aggregators. Although many wallets have introduced optimizations for gas payments, users’ assets remain fragmented across different chains without being interconnected. During use, users still need to manually switch between chains and bridge assets across them. It is unrealistic to expect every user to master the knowledge required for tasks ranging from private key management to bridging assets to new chains. I once created an educational guide on multi-chain wallets, and even as someone who considers themselves a professional, I found the complexity overwhelming. As for aggregators, most currently support only single-chain functionality. A few do support multi-chain operations, but their asset coverage is quite limited, falling far short of achieving the goal of “seamlessly connecting multiple chains.”

Finally, we come to the specific stages of competition. The market for on-chain trading products will likely follow a three-phase pattern: 1) demand competition; 2) fee competition; 3) business model competition.

At present, the plethora of new tools and products indicates that we are still in the first stage of demand competition. However, features like smart money tracking, address monitoring, and position analysis are beginning to show signs of commoditization. Once user demands are mostly addressed by available products, the market will transition to the second stage of fee competition. Products will engage in price wars until the market stabilizes. The final stage, business model competition, will be the ultimate test of long-term operational capabilities.

UniversalX’s value proposition is already clear: it firmly addresses the foundational need for seamless multi-chain liquidity without compromising the integration of increasingly commoditized advanced data functions.

The more the multi-chain trend is validated, the more defined UniversalX’s demand becomes; the clearer the demand for UniversalX, the stronger the validation of the multi-chain trend. This positive feedback loop grants UniversalX pricing power distinct from non-chain abstraction products, giving it a competitive edge during the fee competition stage.

In the final stage of business model competition, UniversalX’s answer is also clear – L1 + infrastructure + flagship application. L1 Particle Chain is a public chain business model, the chain abstract infrastructure Universal Account is a B2B2C business model, and UniversalX is a typical 2C exchange model. Each layer is clear and mutually supportive.

Conclusion

At this point, my discussion is more or less complete. While this is a lengthy article, it is not a glorification piece. The message I hope to convey boils down to two points:

1) As builders, we never lack struggles and doubts, but we always choose to believe and move forward.

2) The realization of chain abstraction is a long-term battle, and the transformation of the on-chain transaction paradigm has only just begun.

There are undoubtedly shortcomings in my research and perspectives, and I welcome your corrections and contributions. If you like this article, please Like, Share, and Subscribe.

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