• Moonbeam introduces Routed Liquidity, simplifying access to liquidity across Polkadot via Wormhole.

•  Parachains gain external asset access through Moonbeam, enabling seamless cryptocurrency liquidity integration without direct Moonbeam interaction.

Moonbeam, a premier hub for multi-chain applications on the Polkadot network, has unveiled a new feature that simplifies access to substantial liquidity across the Polkadot ecosystem using the Wormhole protocol. Previously, parachains on Polkadot had no straightforward means to access external assets and users without separate integrations with bridge providers. 

The introduction of Moonbeam Routed Liquidity changes this, enabling HydraDX users to seamlessly bring in cryptocurrency liquidity from platforms such as Ethereum, Solana, Polygon, or Avalanche, all without the necessity of establishing a Moonbeam account or direct interaction with the Moonbeam platform.

Polkadot’s Layer Zero Strategy

Polkadot’s renowned ‘layer zero‘ strategy has positioned it as a foundational deployment layer for various ‘layer one’ networks. While offering advantages like collective security and inherent interoperability, this approach can lead to fragmentation as new assets emerge on individual blockchains, or ‘parachains.’ The introduction of Moonbeam Routed Liquidity addresses this challenge by enabling all parachains to access bridge liquidity via a cross-chain (XCM) link to Moonbeam.

According to  Robinson Burkey, EVP and Head of Strategy at Wormhole Foundation,

“It’s exciting to see Wormhole now being integrated with Moonbeam Routed Liquidity to help further that growth by bringing seamless asset transfers from outside of Polkadot to any parachain, while leveraging both Wormhole’s Guardian network and XCM for messaging.”

By synergizing GMP, Polkadot’s cross-consensus messaging (XCM), and Moonbeam’s XC-20 technologies, Moonbeam effectively directs liquidity throughout the Polkadot network. This innovation bridges the gap between parachains devoid of EVM support and distant chains relying on external bridges, thereby opening up expansive prospects for decentralized finance within the Polkadot ecosystem.

Alberto Viera, the Founder of PaperMoon and a contributor to Moonbeam’s developer relations stated,

“Moonbeam Routed Liquidity drastically simplifies the complexities of moving data and assets from an external chain within Polkadot. This launch exemplifies how Moonbeam can serve the entire Polkadot ecosystem by serving as a gateway to liquidity solutions through teams like Wormhole.”

HydraDX’s Pioneering Role

HydraDX becomes the pioneer parachain within the Polkadot network to adopt Moonbeam Routed Liquidity. This integration empowers HydraDX users to effortlessly transfer Wormhole-based tokens within their ecosystem via the user-friendly Carrier interface—a robust token and NFT cross-chain bridge tailored for Web3 enthusiasts. This solution streamlines the process of transferring liquidity from an external platform such as Ethereum through Moonbeam to HydraDX, almost as if these blockchains were interconnected.

Furthermore, Moonbeam’s latest GMP precompile introduces a mechanism for developers across various Polkadot-based chains to establish links between smart contracts, facilitating the seamless transfer of tokens, data, and payloads across diverse blockchains. This innovation not only paves the way for novel avenues within decentralized finance (DeFi) and interoperability but also dovetails effectively with Moonbeam Routed Liquidity. 

This combination permits the integration of Polkadot’s inherent secure messages (XCM) with the GMP precompile, empowering developers to harness Moonbeam’s EVM from their primary chains and unlock a spectrum of fresh capabilities.