How We Achieve Cross-chain Capability

This diagram illustrates the cross-chain lending and borrowing mechanism in Caér, powered by the Pharos and Arbitrum networks. The system ensures trustless execution, fast finality, and secure interoperability using Application-Specific Sequencer (ASS), Espresso Finality, Solvers, and Supra Oracle.

Below is an overview of our cross-chain lending mechanism:

1. User Collateral Deposit

The user deposits 1 PAXG (tokenized gold) as collateral on Chain A (Pharos).

2. User Loan Request

The user initiates a request to borrow 100 USDC on Chain B (Arbitrum).

3. Oracle Price Feed (via Supra Oracle)

Before processing the loan, Supra Oracle provides the real-time USD value of 1 PAXG, ensuring that the collateral meets the required Loan-to-Value (LTV) ratio.

4. ASS Verification

ASS verifies the deposit on Chain A and uses the price data from Supra to confirm the user's collateral is sufficient. The ASS cross-checks the deposit and price status before approving the loan request.

5. Espresso Confirmation & ASS Signature Generation

The sequencer leverages Espresso confirmations to ensure transaction finality within sub-15 seconds. Once confirmed, ASS generates a signature, verifying that the deposit exists, the price is valid, and the loan request is approved.

6. Transaction Processing

The generated ASS signature is embedded into the transaction, enabling secure execution on Chain B.

7. Solver Loan Execution

The solver, upon receiving the verified ASS signature, releases 100 USDC to the user's address on Chain B. By integrating ASS, Supra, and Espresso, Caér ensures trustless execution, accurate collateral valuation, and fast cross-chain finality—making lending and borrowing secure, scalable, and RWA-friendly.

Note:

For the purposes of this hackathon, we are using mock tokens to simulate transactions and interactions within the platform. Additionally, the platform is operating on a testnet environment.