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Welcome back to 0xResearch. Here's what we’ve got for you today:

• Squid CORAL and Safenet

• Chart of the Day: Polymarket volumes and OI are down bigly

• Recent Research: Value accrual from blob fees

Cross-chain interop is getting solved

New cross-chain solutions are tackling persistent challenges presented by Ethereum’s rollup-centric roadmap. Squid’s Cross-Chain Order Routing and Auction Layer (CORAL), which is launching imminently, empowers users to execute cross-chain swaps instantly while removing bridge risks.

Coming in 2025, Safe’s Safenet aims to address fragmentation, latency and user experience barriers by offering practical ways to move assets securely and efficiently between chains.

Squid’s CORAL: Liquidity without borders

Squid’s new CORAL protocol builds on the successful Squid 2.0 upgrade, introducing a request-for-quote (RFQ) auction system that integrates both onchain and off-chain liquidity sources.

“With CORAL, we’ve removed the borders between chains [to] allow liquidity to flow with minimal friction,” said Fig, Squid’s co-founder.

CORAL enables transactions (like swapping USDC on Ethereum for assets on Arbitrum) with minimal gas fees, no slippage and enhanced MEV protection, Fig told Blockworks. This makes it “the cheapest decentralized intent protocol” on the market.

The architecture allows for batching intents, which "saves a significant amount of gas and delivers users the best execution possible for their swaps," Fig said.

One interesting property of the design is that like a zk rollup, the more transactions come through, the cheaper it becomes for the end user.

CORAL’s flexibility goes beyond swaps: It allows developers to build complex DeFi applications using pre- and post-hooks, enabling actions like depositing cross-chain-swapped assets into yield farms with one click.

The protocol is expected to go live tomorrow on major chains including Ethereum, Arbitrum and Base. Plans to integrate Solana, Sui and Aptos are slated for January, and Cosmos-based chains through IBC later in 2025.

This positions Squid as a front-runner in achieving true chain abstraction, where users interact with assets seamlessly, regardless of their originating chains.

Safenet is Safe’s bid for an “onchain VisaNet”

Treading along similar chain abstraction themes, Safe’s Safenet — announced today, but planned for release in 2025 — reimagines transaction processing by unbundling execution and settlement, akin to VisaNet’s architecture.

Safenet operates as a transaction processor network atop existing blockchains, offering execution guarantees for cross-chain and onchain transactions.

Safenet’s core features are expected to include:

• Speed: Execution guarantees under 500ms for transactions, including cross-chain operations.

• Security: User-defined policies and validator oversight protect against risks like address poisoning.

• Unified balances: Safenet abstracts assets across chains, enabling seamless use on non-EVM-compatible networks like Solana and even off-chain channels such as centralized exchanges.

DEX activity accounts for about 5% of the Total Volume Processed (TVP) on Ethereum mainnet by Safe accounts, according to Richard Meissner, co-founder of Safe.

“The remaining volume is a mix of asset transfers, treasury management, DAO governance actions and complex DeFi operations like liquidity provisioning,” Meissner told Blockworks.

He notes that what differentiates Safe’s wallet from other solutions is its focus on providing smart accounts.

“By advancing smart accounts, we offer features not possible with traditional EOA accounts like multisig, private key recovery [and] automation,” Meissner said.

Safe is betting that features like these will make it appealing for businesses to move more of their operations onchain.

Safenet is set for alpha release in Q1 2025, initially supporting cross-chain accounts and basic liquidity functions. By mid-2025, Safenet will introduce third-party processors and compatibility with the Safe Apps SDK, enabling new use cases such as off-exchange settlement and subscription services.

— Macauley Peterson (X: @yeluacaM | Farcaster: @Macauley)

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Enter the Unlimited Era: Instant Market Creation, Automatic Liquidity.

Slow and steady Polymarket growth:

Polymarket’s volumes have predictably fallen off from its US election highs. On Nov. 6, Polymarket saw a record $371.2 billion in trading volumes. One month out from election day, daily trading volumes are now averaging about $59 billion a day.

Similarly, open interest (the amount of capital in active bets) peaked at $728 million on election day, but has dropped off to the $100 million-to-$200 million dollar range since.

Despite that, both trading volume and open interest charts demonstrate slow and steady growth from pre-electoral levels. Trading volume is still about 5x greater today compared to the pre-electoral September, while open interest is about 200x higher than it was in January 2024.

Daily active traders on Polymarket place the prediction market platform in a far more optimistic spotlight, with about 20k to 30k daily users against less than 10k in September.

— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)

Value accrual from blob fees

Ethereum L2s are shooting up in usage, and as a result are incurring greater blob fees to the L1. Since early November, blob usage per block has hit the target limit of three, causing the price of blob gas to jump to over 6 gwei in recent weeks.

The top three L2s with the highest lifetime usage of blob data are Base, Arbitrum and Taiko, which have used 164MB, 76MB and 73MB while paying $1.7 million, $1.62 million and $3.9 million, respectively.

This increase in blob prices has generated over $1.7 million in fees to the L1 for the month of November alone. As a percentage of real economic value (REV; measured by transaction fees + MEV tips), blob fees reached about 5% of REV.

Explore more insights on Blockworks Research's Ethereum dashboard.

• The European Commission's report, "Enhancing Financial Services with Permissionless Blockchains," explores the benefits and tradeoffs of private permissioned systems. The report concludes that public permissionless blockchains offer governance innovation, foster competition, interoperability and resilient financial infrastructure. Flexible, activity-based regulation is possible, while enhancing transparency and efficiency. Policymakers should cautiously explore use cases while addressing challenges like scalability, privacy and governance for regulated adoption, the author suggests.

• While projects such as Eclipse aim to bring the Solana Virtual Machine (SVM) to Ethereum, Neon EVM, has been busy working on the inverse — bringing the EVM to Solana. The new addition of Solana Network Extension enables Ethereum dapps to integrate with Solana wallets like Phantom. Innovations include Solana signature support, onchain mempool and intent-based execution, simplifying user experience and empowering developers to bridge Ethereum's ecosystem with Solana's efficiency, the Neon EVM team said Tuesday.

• Polygon PoS was up as much as 12% today following news that Frankfurt-based fintech 21X secured a German BaFin approval to launch the EU’s first regulated blockchain trading venue in 2025. Using the DLT Pilot Regime, the exchange will allow regulated trading of tokenized securities. As of 11 am ET, POL is trading up about 5% for the day.