Challenges

Challenges Faced by Caér Finance

Technological Complexity

Developing a next-generation cross-chain lending and borrowing protocol involves intricate technical demands. Caér must ensure seamless interoperability between its Application-Specific Sequencer (ASS), solver mechanism, and the Espresso finality layer to enable fast, secure, and verifiable cross-chain operations. This includes securing smart contract execution, validating multi-chain data accurately, and maintaining high service availability—requiring continuous engineering iterations, testing, and performance tuning.

Cross-Chain Liquidity Management

Managing liquidity across multiple blockchains presents inherent challenges in ensuring synchronization, consistent interest rates, and timely liquidations. Unlike single-chain platforms, Caér must coordinate lending, borrowing, and asset flows across decentralized networks in real time. The ASS plays a crucial role in guaranteeing data accuracy and enabling efficient, low-slippage, trustless liquidity transfers between chains.

Security & Smart Contract Risks

Operating in a decentralized, composable DeFi environment exposes protocols to threats such as contract vulnerabilities, oracle attacks, and invalid cross-chain messages. Caér mitigates these risks through its trustless and decentralized architecture, combining ASS-driven data validation with Espresso’s confirmation layer—eliminating bridge dependencies and significantly strengthening the protocol’s security posture.

Limited Support for Real World Assets (RWA)

Integrating Real World Assets into DeFi protocols introduces complex challenges, including regulatory compliance, data oracles, and on/off-chain reconciliation. Caér must build infrastructure that bridges tokenized RWAs with its cross-chain lending model, while ensuring on-chain verifiability, off-chain asset representation integrity, and scalability across jurisdictions and blockchain environments. This requires tight integration with RWA issuers, decentralized identity systems, and compliant collateral management frameworks.