Hello SAFE Community 
At Cometh, we’ve been deeply focused on cross-chain capabilities, recognizing its potential to simplify UX and increase DeFi efficiency. We’ve already made progress by developing a chain abstraction demo for EthCC that leverages SAFE, Hashi, and storage proofs. For instance, we demonstrated how a “primary SAFE” on Optimism can control multiple “secondary SAFEs” on other chains, such as Arbitrum. This SAFE module allows these secondary SAFEs to execute delegated transactions on behalf of the primary SAFE. You can check out the demo in this video at the 16-minute mark or explore it further here.
Motivation also comes from the work of the Zero Dev team, who recently demonstrated an innovative approach using a “spend-now, debit-later” model (Magic Spend by Coinbase / Socket Protocol) in the context of 4337 (link). We’re eager to continue building in this direction with SAFE and ERC-4337 while pushing the boundaries further with some innovations.
Our aim with this demo is to introduce multichain liquidity sharing and an abstracted balance model. This demo will show how we can seamlessly manage cross-chain liquidity through a P2P network of smart wallets.
Why this Initiative ?
We (Cometh) are building an Account Abstraction (AA) Kit based on ERC-4337, SAFE, and Passkeys.
In supporting multi-chain environments, we face specific challenges with smart wallets:
- Diverging Wallet States: When wallet states (e.g., owners, permissions) differ across chains, it results in significant UX complexity.
- Passkey Management Issues: The passkey used to create the wallet on Optimism in January may no longer be available when Bob wants to deploy on Arbitrum.
- Same Address Across Chains Complexity: Having the same wallet address across multiple chains creates issues when the smart wallet states are out of sync.
Smart wallets in a multi-chain context create significant complications, adding friction rather than enhancing user experience. However, in a chain abstraction context, these same smart contracts become an advantage, as they can manage cross-chain liquidity in a programmable way. This is why we need to make the leap.
Old is gold. We’ve given this initiative the code name Homestead—a nod that may resonate with those who know Ethereum’s history as the name of its original mainnet release. Homestead reflects the transformative impact we aim to have on the adoption of SAFE, account abstraction, and Ethereum itself. Through the Homestead initiative, each SAFE could access shared liquidity to explore previously uncharted blockchain territory, and every EOA would have a compelling incentive to join the smart account ecosystem
Homestead Protocol leverages Account Abstraction (AA) to deliver a seamless cross-chain experience by directly utilizing liquidity available in smart wallets such as SAFE. Instead of relying on fragmented liquidity bridges, Homestead optimizes liquidity across chains, lowering fees and reducing complexity. This allows users to transact across multiple networks without the need for manually bridging assets or acquiring gas tokens.
Current Chain Abstraction Landscape
The chain abstraction ecosystem is evolving rapidly. Liquidity fragmentation remains the biggest challenge, causing inefficiencies, extra costs, and security risks. We acknowledge that this fragmentation is here to stay and rather embrace it to build a countermeasure to the consequential UX problems.
Homestead’s Abstracted Balance Solution
Homestead tackles these problems with a novel approach: the user’s balance across multiple chains is unified into an Abstracted Balance. This balance is seamlessly accessible across different chains, leveraging on-chain liquidity directly from smart wallets, all while limiting the use of external liquidity networks only when necessary.
The “spend-now, debit-later” model ensures that users can transact instantly without needing to move assets across chains manually. The system pulls liquidity from smart wallets in real-time, and if internal liquidity is insufficient, external fallback mechanisms kick in to maintain a seamless experience (solver).
Yield Incentives & Cross-Chain Optimization
Homestead introduces a dual incentive structure. Users can earn yield by contributing a portion of their SAFE balances to the Homestead cross-chain pools while simultaneously enjoying the ease of cross-chain transactions. The protocol’s cross-chain transaction fees will be redistributed to network participants, creating incentives and aligning economic benefits for those contributing liquidity. Whether they’re looking for yield opportunities or conducting DeFi activities across networks, users benefit from the simplicity of managing their assets without having to bridge between chains manually.
No More Liquidity Provider Dependency
The protocol reduces dependency on liquidity provider networks by utilizing P2P smart wallets, such as SAFE, to facilitate cross-chain liquidity management. In essence, liquidity is sourced directly from users, and fallback networks are used only when absolutely necessary, optimizing transaction costs and providing higher security by minimizing the number of external intermediaries.
This approach contrasts with traditional models where liquidity fragmentation and reliance on third-party liquidity providers create inefficiencies and risks. Homestead’s P2P network not only generates yield but also streamlines the user experience, making it more cost-efficient.
Alignment with the SAFE ecosystem
Homestead relies on a network made of SAFE smart accounts with positive balances. Settlement will be nearly instantaneous with a positive spread between the amount of token spent and the amount debited. This spread has to be competitive with alternative slower approaches and this spread has to be positive to reward the 4337 infrastructure providers casting the transactions. This spread can be allocated to support the SAFE Activity Program and the SafeDAO Ecosystem activities.
Estimated Timeline (Just to give an Idea of the Project scope we imagine)
- Timeline: PoC in 2 month, MVP in 3 months, production in 4/8 months.
- Partnerships: Potential partnerships with EOAs Wallet with 7202 and CEXs as fallback liquidity providers.
Conclusion
Leveraging 4337 and smart wallet liquidity, this concept addresses liquidity fragmentation and inefficiency while positioning SAFE at the forefront of Chain Abstraction and DeFi innovation.
We would greatly appreciate the community’s feedback, insights, and suggestions on this concept. Thank you in advance for your input!