A New Dawn for Cross-Chain Transactions: Exploring the ERC-7683 Standard

In the thriving blockchain world of the multi-chain ecosystem, achieving secure and convenient cross-chain interoperability has always been a significant challenge. As user demand for cross-chain transactions grows, this issue has become increasingly prominent. The main challenges include security, high Gas fees, and operational complexity.

Security Risks

Security is the primary challenge faced by cross-chain transactions. Cross-chain bridge protocols have become major targets for hackers due to the large amounts of assets they carry. These protocols rely on trusted third-party validators to handle cross-chain transactions, but if the number of validators is insufficient or the trust model is too centralized, they may be exploited by hackers. Additionally, contract vulnerabilities often serve as entry points for attacks.

For example, in August 2024, a certain cross-chain bridge was suspected to have been attacked, resulting in a loss of approximately 12 million USD. In March 2022, a larger-scale security incident occurred on the same platform, with losses reaching up to 600 million USD.

High Transaction Costs

Cross-chain transactions usually require users to pay gas fees on two chains, resulting in higher overall costs.

Operational Complexity

Each blockchain network has its unique consensus mechanism and protocol, and this decentralized state requires users to perform cumbersome operations when transferring assets across chains. Users who trade frequently may also face issues with asset price slippage.

To address these challenges, a new standard proposal ERC-7683 was introduced in May 2024, aimed at simplifying cross-chain transaction processes through a shared execution network.

Introduction to ERC-7683 Standard

The ERC-7683 standard is based on the CrossChainOrder structure and provides an ISettlementContract smart contract interface, implementing a standard API for cross-chain transaction execution systems. Its core idea is to ensure that all "cross-chain intents" follow the same order structure, thereby significantly enhancing the flexibility and user-friendliness of cross-chain operations.

Application Status

In August 2024, a certain Layer 2 solution announced the adoption of the ERC-7683 standard to enable efficient transfers of ETH and USDC on its network and to promote application layer interoperability within the Ethereum ecosystem. Additionally, the team proposing this standard also stated that they would use it in their cross-chain collaborations.

It is worth noting that the ERC-7683 standard mainly addresses the standardization of the implementation entry, ensuring consistency in user experience. However, obtaining sufficient cross-chain liquidity remains a challenge. The successful implementation of this standard requires a sufficient number of active "Fillers" to support users' "cross-chain intentions," which necessitates the formation of a wide-area effect—more use cases being integrated and more users participating in order to truly enhance the overall efficiency of cross-chain transactions.

Industry Support

The co-founder of Ethereum expressed support for the ERC-7683 standard. He pointed out that the standard can include various on-chain activities such as batch transactions, Merkle proofs, etc., and emphasized its potential to simplify user operations.

Looking to the Future

In the multi-chain landscape of the Web3 era, optimizing and simplifying cross-chain transactions to release more liquidity is a key challenge. The ERC-7683 standard directly addresses this pain point and is expected to significantly enhance interoperability between blockchains, having a profound impact on the entire blockchain world. In the short term, users can expect an improvement in experience brought by this standard, while in the long run, it may inject new vitality into more DeFi projects, driving the development of the entire ecosystem.