Crypto Is Fragmented — And Transactions Are Breaking Because of It

By Philip Sentner

Date: October 2023

Quick Insight: The future of finance is tokenized, but the multi-chain reality makes simple transactions complex and risky. This summary explains how a new infrastructure combines cross-chain operations into a single, secure user action.

💡 Why Tokenization: Why is tokenization considered the next evolution after digitization, and what does it enable?
💡 Multi-Chain Challenges: What specific challenges does multi-chain fragmentation pose for users trying to move or exchange assets?
💡 Single Protocol Solution: How can a single protocol abstract away the complexity of multiple cross-chain swaps and bridges into one transaction?

Top 3 Ideas

🏗️ Tokenization's Next Step

"I see tokenization as the successor to digitization."

Digital Evolution: Tokenization represents the next logical step beyond simple digitization. This means assets gain programmability and global liquidity, opening a new frontier for financial products.
New Products: Real-world assets like vehicles or mortgages will live on-chain. This creates a foundation for entirely new financial instruments and markets.
Big Bet: The industry is placing a significant bet on this shift. This indicates a strong belief in the long-term value and inevitability of on-chain asset representation.

🏗️ Multi-Chain Mayhem

"You definitely don't want to have a failed $10 million transaction."

Complex Routes: Moving an asset from one chain to another often requires multiple swaps and bridges. This creates a convoluted path for users, increasing friction.
Manual Burden: A typical cross-chain transfer can demand three separate transaction signatures. This manual effort introduces significant user error and frustration, especially for high-value transfers.
High Risk: The complexity directly leads to a risk of failed transactions. This risk is unacceptable for large sums, hindering institutional adoption and user confidence.

🏗️ Lei's Unified Rail

"Lei built a multi-chain transaction rail. This rail is a set of smart contracts that lives on all these chains and allows us to combine a variety of transactions into one."

Single Transaction: Lei's smart contract rail combines multiple cross-chain operations into one atomic transaction. This drastically simplifies the user experience and reduces the potential for errors.
Ubiquitous Contracts: The rail exists as smart contracts across various chains. This ensures broad compatibility and reach, allowing for seamless asset movement regardless of the underlying blockchain.
Abstracted Complexity: Users no longer need to understand the intricacies of bridging and swapping. This abstraction makes multi-chain interactions as simple as a single click, accelerating adoption.

Actionable Takeaways

🌐 The Macro Shift: The inevitable migration of real-world assets onto blockchain networks (tokenization) is currently bottlenecked by the technical friction of a fragmented multi-chain environment.
⚡ The Tactical Edge: Investigate protocols building multi-chain transaction rails that abstract away complexity. These solutions will capture significant value by enabling seamless asset flow.
🎯 The Bottom Line: The ability to execute complex cross-chain operations in a single, secure transaction is a critical infrastructure piece. This will unlock the next wave of tokenized financial products and drive mainstream adoption over the next 6-12 months.

Podcast Link: Click here to listen

Crypto Is Fragmented — And Transactions Are Breaking Because of It

I see tokenization as the successor to digitization. Once we see a vehicle being represented on chain, or real estate, or a mortgage contract, there's a whole new future of financial products coming.

Blockchain has an amazing future ahead. This is just the beginning of that. We simply placed a big bet on this. I have with me Philip Sentner, the founder and CEO at Lei data.

I want to understand which assets are available on which chain, and at which price these assets are available. On top of that, I need to understand if I want to get from A to B, what are the potential routes you would have to swap an asset so that you can bridge and then swap again.

So this is complex and implies the user would have to sign three transactions. That's a manual effort.

You definitely don't want to have a failed $10 million transaction. So instead of having to do that, Lei built a multi-chain transaction rail.

This rail is a set of smart contracts that lives on all these chains and allows us to combine a variety of transactions into one.

Now we are doing two new things. The one thing is

Crypto Is Fragmented — And Transactions Are Breaking Because of It