Gazelle

PROBLEMS

Until now, approaches to bridging BTC to other Turing complete chains have been fraught with considerable decentralization and security trade-offs.

Some of the most important ones are custodian risks prevalent with currently dominant BTC bridging solutions (namely WBTC) and trust assumptions in chain independent networks of validators/custodians.

When talking about bridging BTC specifically, we encounter additional friction pain points.

The Bitcoin network is the chain which secures by far the most crypto-economic value and ironically has the least economic activity on the chain itself with most of the BTC tokens sitting idle in wallets, underutilized.

This primarily being a result of a lack of smart contract on the Bitcoin blockchain we can infer that unlocking such expressivity would ignite economic activity on Bitcoin and remove some of the concerns about Bitcoins long term security budget. 

Many bridge solutions encounter an initial liquidity cold start problem, being unable to attract capital to provide liquidity for bridges, hindering any scaling perspective.

Trustless or trust-minimized bridging solution also enable some novel primitives in the bitcoin ecosystem such as L2s.

EXISTING SOLUTIONS

As we touched upon previously, the current BTC bridging solution carries some serious decentralization and security problems, leaving a lot of space for innovation.

EIGENLAYER

EigenLayer is a restaking protocol on Ethereum, enabling use of currently staked ETH to secure additional dapps and infrastructure beyond the ETH POS consensus for additional rewards and additional slashing penalties. By leveraging the ETH validator set, EigenLayer enables the incentivization of specialized POS networks such as those needed for bridging. Sufficiently subscribed to, such specialized services can offer security guarantees equal to the ETH POS consensus.

Such specialized services are described in AVSs (Actively validated services) which have their dedicated operators in a decentralized network.

GAZELLE ARCHITECTURE

Gazelle is an Ethereum consensus secured, two-way Bitcoin/Ethereum bridge.

The Gazelle protocol consists of a few key components which are located on the Bitcoin and Ethereum blockchains with offchain operators. 

On the Bitcoin side we have a multisig address which holds the native BTC which backs our gBTC on Ethereum.

The EigenLayer Core contracts define the way AVSs and operators communicate and enable staking.

Two AVSs, one for each bridging flow, from BTC to ETH and ETH to BTC with their respective independent operators.

The gBTC (Gazelle BTC) ERC20 token contract responsible for minting and burning tokens.

Offchain operators responsible for acknowledging any BTC deposits to the BTC multisig and telling the AVS to call the gBTC contract to mint the user their gBTC.

When burning the gBTC tokens, the operators when prompted by the AVS, will sign the multisig with their key to release the BTC held in the multisig to the user on the BTC blockchain.

The operators read and interact with the Bitcoin blockchain by running a local bitcoin node.

Failure of the operators to accomplish these tasks will result in slashing by the AVS.

FUTURE OF GAZELLE

As of now, slashing has not been enabled on the EigenLayer protocol. When this features is enabled in the near future we will customize our AVSs with appropriate slashing conditions.

With slashing there will also be a need for a decentralized challenge mechanism with bounties for successful challengers.

As operators are dynamically added and removed from the AVSs, there is a need to modify the BTC multisig signers every predetermined period of time with an entry and exit queue for operators.

The use of bitcoin nodes for verifying the BTC state and interacting with the Bitcoin blockchain is relatively inefficient, so employing ZKPs for light node proofs would significantly reduce costs.

As the ultimate end goal of enabling native BTC DeFi the Gazelle bridge would be utilized for securing the two way transfer of BTC between Bitcoin L2s and Bitcoin Mainnet. Providing additional financial incentives for AVS operators and stakers. 

Github Repo:
https://github.com/Scannty/eth-belgrade-2024