Minitswap is Initia’s proprietary solution to address the user experience
challenges posed by the lengthy withdrawal
challenge periods
of
optimistic bridges.
Furthermore, while a longer challenge period increases the duration in which a
challenge can be made, it simultaneously increases the wait time required for
withdrawals.
While optimistic token bridges between a Layer 1 (L1) and a Layer 2 (L2) chain
provide a secure way of transferring assets between chains, it comes with
various downsides.
Long Withdrawal Times: Transferring tokens from L1 to L2 is usually
instantaneous, but the reverse direction involves long wait times, often days,
before receiving assets on L1.
Single Sequencer Risks: Creating a DEX pair between the original token on
L1 and the bridged tokens can mitigate long withdrawal times. However, most
L2s currently operate with a single sequencer, raising security, reliability,
and centralization concerns for liquidity providers.
Lack of Liquidity: The sequencer risk issues can result in insufficient
liquidity in the token pool, leading to unfavorable swap prices, high
volatility, and significant
slippage
for users bridging tokens back to L1.
The Minitswap DEX is designed to allow users to freely, quickly, and efficiently
bridge tokens between Initia L1 and rollups. Users looking to bridge back to
Initia L1 from a rollup can simply utilize Minitswap (along with IBC) to swap
their tokens back to INIT without waiting for the challenge period to expire.The full architecture, design decisions, and how the above risks are mitigated
are detailed in the following section.
