How NEAR Protocol’s Chain Signatures Power MoreMarkets and Cross-Chain Liquidity

Decentralized finance (DeFi) today faces a pressing challenge: billions in crypto assets remain idle on their native chains, unable to easily participate in productive financial activities due to liquidity fragmentation and complicated bridging mechanisms. Traditional methods force users to wrap tokens, moving them off their native chains and introducing friction, high fees, slow processing, and increased security vulnerabilities.

NEAR Protocol introduced Chain Signatures in 2024 to address these issues head-on, unlocking fast and secure cross-chain liquidity. Now MoreMarkets is using Chain Signatures to introduce a revolutionary model of verticalized DeFi. Unlike traditional bridging, which requires users to transfer and wrap tokens, MoreMarkets retains token security and native integrity. Users deposit tokens, such as XRP, directly into dedicated vaults on their native chains, triggering cryptographic proof creation through NEAR’s Chain Signatures. Smart contracts on destination blockchains then trustlessly validate these proofs, creating a digital representation: “More” tokens that mirror the locked assets. This model encourages broader DeFi participation without traditional bridging complexity.

Understanding NEAR’s Chain Signatures

Chain Signatures represent NEAR Protocol’s groundbreaking solution for secure cross-chain transactions. Chain Signatures enable NEAR accounts, including smart contracts, to authorize transactions on external blockchains securely. This system leverages a decentralized multi-party computation network, which combines NEAR staking with Eigenlayer ETH restakers to safeguard cross-chain interactions.

The technical infrastructure of NEAR’s Chain Signatures encompasses three core elements:

• Native Asset Vaults: Assets remain securely on their native blockchain, protected by smart contracts which trigger cryptographic signature events when deposits occur.
• Threshold Multi-Party Computation: Multiple independent “guardian nodes” manage distributed cryptographic proofs. When an asset deposit is made, guardians collaborate to generate a cryptographic proof, attesting to the locked asset’s status. The result is a system that eliminates single points of failure, isolates risks, and minimizes attack vectors inherent in traditional bridging solutions.
• Cross-chain Messaging via NFFL: Cryptographic proofs are communicated through the NEAR-enabled NFFL protocol, a secure cross-chain messaging framework, verifying asset status to receiving blockchains.

Unlike traditional bridging that requires tokens to physically move off their native chains—often causing complexity, security vulnerabilities, and fragmented liquidity—Chain Signatures keep tokens securely locked on their original blockchain. Through cryptographic proofs, Chain Signatures verify these locked states trustlessly across other blockchains, enabling asset utilization without physical token movement.

For users and developers, this means:

• Reduced Risk: By avoiding traditional multisig structures, Chain Signatures lower vulnerabilities traditionally associated with bridge exploits.
• Enhanced User Experience: NEAR’s efficient consensus and verification algorithms offer substantially reduced latency, allowing quicker, smoother cross-chain interactions.
• Increased Asset Utilization: By transforming previously idle tokens into productive assets, token holders benefit from significantly higher yields and capital efficiency.

Real-World Use Case: XRP on MoreMarkets

Consider XRP, a widely-held asset with historically low utilization rate in DeFi (0.07% AUR). With MoreMarkets and NEAR Chain Signatures, users can deposit XRP securely into a native XRP Ledger vault. This deposit triggers NEAR’s MPC-based chain signature system to cryptographically confirm XRP’s secure state. MoreXRP tokens are then minted on Solana or any other demand chain, representing the XRP locked in its home chain. Strategists deploy these MoreXRP tokens into yield-generating strategies across DeFi, funneling yield directly back to the user’s original vault.

A New Era of Global Liquidity

MoreMarkets and NEAR Protocol’s Chain Signatures embody a shift toward a more interconnected, efficient, and secure DeFi ecosystem. The integration of Chain Signatures promotes deeper liquidity pools, improved yields, and a simpler user experience. By ensuring assets remain secure on their native chains, NEAR Protocol drives a robust foundation for truly global liquidity.

Disclaimer:

This post is intended solely for informational and educational purposes. It does not constitute financial, investment, or legal advice. NEAR Protocol’s Chain Signatures and their integration with MoreMarkets and cross-chain liquidity solutions involve innovative technologies that may carry inherent risks, including but not limited to technical vulnerabilities, market volatility, regulatory uncertainty, and potential loss of digital assets. Users should independently evaluate the technology and associated risks before interacting with the protocol or related products. Past performance or technical capabilities do not guarantee future outcomes or security. The publisher makes no representations or warranties regarding the accuracy, completeness, or reliability of the information provided herein. Users are solely responsible for their own decisions and actions.