Chain Abstraction: Where the Crypto Ecosystem's Billion-User Scale Begins
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Chain Abstraction: Where the Crypto Ecosystem's Billion-User Scale Begins
Chain abstraction is not a technology, but a user experience and product philosophy.
Navigating Web3 tides with focused insightsHost: Alex, Research Partner at Mint Ventures
Guest: Lydia, Former Researcher at Mint Ventures, currently a researcher at Particle Network
Recording Date: 2025.1.17
Hello everyone, welcome to WEB3 Mint To Be, brought to you by Mint Ventures. Here, we continuously question and deeply reflect—clarifying facts, understanding realities, and seeking consensus in the Web3 world. We aim to demystify the logic behind trending topics, provide insights that go beyond surface-level events, and introduce diverse perspectives.
This episode is the fourth installment of our series "The Present and Future of Web3 Sectors," where we dive into chain abstraction. In the previous three episodes, we discussed Crypto AI, DeFi, and Hyperliquid. In upcoming episodes, we’ll invite guests to discuss MEME, public blockchains, DePIN, gaming & social, PayFi, and Web3 policy.
Disclaimer: The views expressed in this podcast do not represent those of the guests’ affiliated organizations, and any projects mentioned do not constitute investment advice.
Alex: Joining us today is our former colleague Lydia. She's both a crypto industry researcher and a key member of a well-known chain abstraction project. She previously appeared on our AI-focused episode—Lydia, say hello to our listeners.
Lydia: Hi everyone, I'm Lydia. I'm currently a researcher at Particle Network and also lead community development for the Chinese-speaking region.
Understanding Chain Abstraction and the Problems It Solves
Alex: Let’s begin with our main topic. First, the concept of chain abstraction—many people, including myself when I first encountered it, find it sounds abstract. I read several articles and still felt confused. If you were to explain chain abstraction in simple terms to a Web3 beginner, how would you define it? What problem is it trying to solve?
Lydia: You said reading articles left you confused—I felt the same way initially. That’s why I ended up writing my own research report on chain abstraction. I think the issue is that chain abstraction is largely dominated by Western narratives. When projects translate content into other languages, they often mechanically translate technical documents or PR materials, making them hard to understand. Now that I’m working as a researcher, part of my job is to localize these Western concepts for Eastern audiences. At Particle Network, our official definition of chain abstraction is simple: “A user experience that frees users from manually interacting with multiple chains.” It still sounds a bit academic, so I adjust my explanation based on who I’m talking to. For a centralized exchange (CEX) user, I say chain abstraction lets you interact with on-chain assets just like you would on a CEX. For an on-chain native user—someone new this cycle who didn’t even use an exchange but downloaded Phantom wallet straight away—I explain it as eliminating the need to manually bridge or manage gas; you can treat all chains as one. For developers, I emphasize that chain abstraction allows their apps to be accessed by users across multiple chains, requiring deployment on just one chain while gaining access to users on others like SOL or Base.
As for what problems chain abstraction solves—there’s probably a vague consensus here. The core issue is straightforward and something we all face daily. But to acknowledge it, you first have to accept a premise: the multi-chain trend. We’re seeing an explosion of general-purpose Layer1s, Layer2s, AppChains, and AppRollups. Data shows over 100 new chains emerged in the first half of 2024 alone, and the total number of blockchains now likely exceeds a thousand. Of course, not everyone fully embraces this multi-chain reality—some fans of monolithic chains likely disagree, possibly even feeling fear or spreading FUD. Our response is simple: multi-chain is inevitable. You can’t build all of Web3 on a single state machine. If you believe Web3 has even a fraction of the potential of the internet, then diversity of chains is necessary. Once we accept that, we naturally see a real, harmful, and urgent problem: fragmented liquidity across chains. From the user side, this means every new chain requires a new wallet; bridging between chains can take 20 minutes or more; and even after bridging, you might lack gas when you need it most. Managing assets becomes a nightmare—your holdings are scattered, gas must be prepared separately, and you often end up paying gas to transfer gas. Personally, whenever I interact with a new chain, I always leave some “dust” behind. Worse, sometimes I forget about those assets entirely—or even lose the wallet itself.
For developers, the harm runs deeper: we’re seeing redundant reinvention across chains, like MEMEs copied across different chains with minor variations. Every public chain prioritizes TVL (Total Value Locked), leading to rigid, siloed liquidity. Infrastructure is being rebuilt repeatedly using outdated models—everything feels stale and redundant. Take Polymarket: after it gained popularity, many chains wanted to launch their own prediction markets. But if you understand the purpose of prediction markets—to aggregate the wisdom of the largest possible crowd—then having one unified market accessible by users across chains makes far more sense than fragmenting it into tiny versions on each Layer2 or AppChain. Chain abstraction enables seamless cross-chain navigation for users and empowers developers to build truly innovative applications with strong product-market fit (PMF).
Alex: Got it. So ultimately, the goal is to reduce the high barriers and friction for users and developers in this multi-chain environment. How do mainstream chain abstraction products today approach solving this problem at the product level?
Lydia: Chain abstraction isn’t a technology—it’s a user experience and product philosophy. When we talk about the chain abstraction sector, we mean that every Web3 application deserves to be rebuilt through the lens of chain abstraction. So the product strategy depends on the type of app: chain abstraction + prediction markets, chain abstraction + NFTfi, chain abstraction + perpetual DEXs, etc.
Alex: Let’s take two simple scenarios. Suppose a user only has a SOL wallet and wants to instantly buy a MEME token on Base—that’s a trading scenario. How does your product, Particle Network, achieve this function at the product level?
Lydia: That’s exactly what UniversalX does. Particle Network’s current product lines consist of two main parts: Universal Accounts—an infrastructure layer for developers—and UniversalX, our consumer-facing application launched and recently updated in December. Yesterday, I even published an article explaining the “brain” behind UniversalX: the Universal Accounts infrastructure. It directly addresses your example. The mechanism works like this: we’ve built a system with unified liquidity and unified gas. We generate a set of AA (Account Abstraction) addresses for the user across all chains, managed under a single unified address created by Particle Network. When a user initiates a transaction on one chain, a bundler first packages the transaction and uploads it to Particle Network. Then, Particle Network’s Layer1 coordinates across chains, primarily leveraging LPs (Liquidity Providers). These LPs act as intermediaries, moving base intermediary tokens across chains. For example, if I want to use ETH on Base to buy a MEME on Solana, the ETH on Base might first be converted into an intermediary token like USDC. The LP then functions similarly to a Solver in a Solver network, transporting USDC between Base and Solana. Once USDC arrives on Solana, it’s swapped into the desired MEME token, which is then delivered to the user. All of this happens beneath the surface. The user simply approves one transaction and magically sees their ETH on Base purchase a MEME on Solana.
Alex: Understood. Earlier, you mentioned a challenge developers face: building an app and deploying it identically across multiple chains, with separate user bases and isolated funds. How does your chain abstraction solution help reduce the burden of multi-chain deployment?
Lydia: Developers can integrate our Universal Accounts SDK. Doing so equips users with a chain-abstracted identity and account system. Once logged in via Universal Accounts, users can seamlessly use assets from any chain to interact with your DApp. For instance, if I’ve built my own AppChain with little native liquidity, users can still engage—even if all their assets are on Base (ETH) or Solana (SOL)—without needing to bridge anything to my chain. This removes liquidity barriers entirely when acquiring users.
Alex: To make this work, do users need to already have a Universal Account?
Lydia: No, you just need to integrate it into your product.
Alex: So users are unaware of Universal Accounts when using the product?
Lydia: Exactly. It depends on the login method. If the user already has a Universal Account with balance, great. If not, Particle has long supported social login and wallet middleware, allowing users to easily create one and fund it from anywhere to interact with DApps on any chain.
Market Size and Valuation of Chain Abstraction
Alex: We’ve heard Lydia explain her understanding of chain abstraction, how it improves end-user experience, simplifies developer workflows, and helps acquire users through product design. As you noted, chain abstraction is more of a development or product philosophy rather than a standalone product or vertical. If we were to assess its market size, how large would you estimate it to be? For context, traditional finance is a multi-trillion-dollar market, and DeFi is arguably a hundreds-of-billions market in the near term. Can we estimate the market size for chain abstraction?
Lydia: I don’t think valuing such a broad concept is particularly meaningful—we should evaluate it per use case. As I mentioned earlier, chain abstraction can integrate with prediction markets, DeFi, perpetual DEXs, NFTfi, and more. I believe many future products will explore these directions, and eventually, chain abstraction may become an industry standard—so much so that launching a non-abstracted product would raise eyebrows. Among these, chain abstraction + trading is the scenario we believe will explode first. Historically, major narratives often revolve around transforming the trader experience—either the assets traded or the efficiency of trading. Even now, AI is fueling speculation around DeFai, showing how central trading remains to Web3’s narrative engine. That’s why, after building the Universal Accounts infrastructure, our first application focused on on-chain trading. Products like UniversalX combine multiple advantages: the new narrative of chain abstraction, modular Layer1 architecture, the label of next-gen trading platforms, and positioning as an on-chain trading gateway. Recall how Hyper disrupted the status quo from centralized exchanges (CX), capturing significant market share. When it first hit a $10B+ valuation, people were stunned—it’s now over $20B and has stayed in the top 30 by market cap for a long time. Imagine a platform pioneering a new paradigm in on-chain trading achieving such valuation—it seems far more justified than a stagnant, underused Layer1.
Intent vs. Chain Abstraction
Alex: Understood. My original question stems from typical project valuation frameworks—assessing the value of the problem being solved. Market size often determines a project’s valuation ceiling. Your perspective suggests chain abstraction enhances user experience and could evolve into a gateway product used across multi-chain or other experiences. It could improve existing products like trading platforms. Translating this user value into project valuation may allow for higher ceilings—a refreshingly different angle.
I recall that before chain abstraction gained traction, there was another concept in early 2023 called “intent”—popularized by Paradigm, a leading Western capital firm, in their article *Intent-Based Architecture and Their Risks*. Back then, intent seemed closely related to what we now call chain abstraction. In your view, what’s the relationship between intent and chain abstraction?
Lydia: This is a common question—probably because both concepts sound abstract at first. Simply put: intent is a specific technology that enables chain abstraction. We said chain abstraction isn’t a technology but a philosophy and UX paradigm. Intent, however, is a concrete technical component supporting that vision. Its role is to drive complex cross-chain workflows and asset movements—the same LP role I described earlier leverages intent-based architecture. Let’s revisit what intent means: the word “intent” refers to what you intend to do—a broad concept encompassing nearly all Web2 product design, since most mobile apps serve user intent directly. In Web3, though, “intent” isn’t used broadly. Instead, it refers narrowly to low-level technical mechanisms—specifically, asset transfers powered by Solver networks, especially in cross-chain contexts. Chain abstraction, in contrast, is a holistic concept with various approaches: account layers, middleware, cross-chain communication protocols. Intent is one piece. Beneath intent, you have Solver networks and clearing layers—all serving the singular goal of efficient cross-chain asset transfer. In fact, we categorize intent, account abstraction, and interoperability protocols as the three foundational technical pillars of chain abstraction.
Alex: Got it—so intent is just one small module within the broader concept of chain abstraction?
Lydia: Yes.
Categories of Chain Abstraction Projects
Alex: Based on your description, chain abstraction includes many projects solving different specific problems. From a structural standpoint, how would you categorize the types of projects under chain abstraction? What problems do they solve, and how do they interconnect?
Lydia: I roughly divide them into five layers: application layer, account layer, middleware layer, blockchain layer, and cross-chain communication layer. The application layer is most intuitive—consumer-facing apps combining chain abstraction with specific use cases, like UniversalX for trading. The account layer provides users with unified identity and balances across chains—examples include NEAR’s account abstraction and Particle Network’s Universal Accounts. The middleware layer consists of “chain abstraction as a service” providers for developers, such as Socket, Aggregate, and Everclear (formerly Context). Particle’s Universal Accounts builds a system of unified liquidity and gas, which will eventually be open to external developers. The blockchain layer includes protocols aiming to enhance connectivity within their ecosystems—like Polygon’s AggLayer and OP Stack. Finally, the cross-chain communication layer includes well-known protocols like Wormhole and Axelar, enabling communication between different blockchains. These five layers form a stack: the bottom layers (blockchain and communication) serve as foundational protocols; middle layers (middleware and account) cater to developers; and the top layer (application) delivers the final product to end users.
Alex: Understood. Some of these products are already familiar and have operated for years. Looking ahead, do you expect a few dominant players to offer solutions across most of these five layers, or will we continue seeing a Lego-like model—specialized projects per layer combining effectively? Which direction seems more likely?
Lydia: I believe modularity will prevail. I once debated this on Twitter regarding horizontal vs. vertical architectures in our industry. Setting aside liquidity, looking at product evolution in both Web2 and Web3, we clearly see functional decomposition. Take DeFi protocols: initially, they were monolithic suites offering swap, lending, perps, even NFTfi—all in one app. Over time, these functions split off, with dedicated leaders emerging in each category. This shift—from vertical integration to horizontal specialization—is the trajectory I expect the industry to follow.
Notable Chain Abstraction Products
Alex: Among all chain abstraction-related products or projects, which ones stand out to you as particularly impressive from a practitioner’s perspective? Please give one or two examples—and describe the context in which you used or observed them, highlighting what makes them exceptional.
Lydia: Among the five layers, middleware and infrastructure—blockchain and cross-chain communication—are relatively mature today. But at the top—the application layer—there are still very few usable products for real end users. Most are developer demos or prototypes. The only actually usable product right now is UniversalX. Unichain keeps releasing demos, but hasn’t shipped yet. Why only UniversalX? Because it’s the only product that, under a non-custodial model, replicates the CEX experience. It frees users entirely from worrying about DEX tokens or cross-chain logistics, enabling seamless trading across all chains. Other projects, like certain cross-chain bridges, are pivoting toward cross-chain DEXs—but their functionality is limited. They might support swapping ETH on Base for a MEME on Base, or ETH on Base for ETH on Arbitrum, but not ETH on Base for an arbitrary MEME on Arbitrum. That fails to achieve true chain abstraction.
Back to UniversalX: its use case is straightforward—on-chain trading. I now conduct all my on-chain trades through UniversalX. Talking to many users, the feedback is consistent: it’s smooth and intuitive. Once you use it, going back to manual, primitive cross-chain methods feels unthinkable. The entire product embodies our vision for the next generation of on-chain trading platforms—one phrase captures it: Fully-on-Chain CEX. Key features include fully non-custodial accounts, permissionless trading, liquidity experience matching CEXs, and mobile-first design. This aggregates our forward-looking perspective on the future of trading products.
Alex: I see. You invited me to try UniversalX—I’ve signed up, but haven’t actively used it yet. One reason is I do little short-term trading, so I’m not the core user. Another concern: you mentioned UniversalX is fully permissionless and non-custodial. But based on your earlier explanation, UniversalX relies on Universal Accounts, which controls accounts across supported chains. How can it be non-custodial if your system creates an account that manages multi-chain wallets? Is its custodianship level the same as a regular EOA wallet?
Lydia: The account we create isn’t an EOA address—we don’t create a new wallet. Instead, we embed an AA (account abstraction) address within your existing wallet. This AA address has no private key and is controlled via signatures from your EOA. Every transaction involving the AA address requires your EOA to sign. We have zero access to your private keys—we never touch them.
Alex: Understood. So the EOA wallet refers to tools like MetaMask, OKX, Rabby—the ones I already use. Universal Accounts is your system’s shorthand, encompassing both the deployed AA addresses on each chain and the underlying unified liquidity and gas system. For users, post-SDK release, Universal Accounts may feel like a wallet, but beneath lies your infrastructure.
Lydia: Correct.
Alex: So to clarify: I start with my personal EOA wallet, link it to your Universal Accounts, then use my EOA to sign transactions, allowing the Universal Accounts system to orchestrate my multi-chain AA wallets (which lack private keys). Theoretically, I only need to interact with Universal Accounts via my EOA—correct?
Lydia: Yes—your EOA calls and accesses multi-chain assets through the Universal Accounts system.
Alex: And Universal Accounts itself is permissionless and non-custodial by design?
Lydia: Yes.
AI and Chain Abstraction
Alex: From last year into this year, Web3 hasn’t seen many breakthrough innovations. Perhaps the most notable new primitive is Crypto AI—the freshest thing in this cycle. Both AI and chain abstraction aim to improve Web3 user experience, lower financial barriers, and simplify complex products. In your view, is the relationship between AI and chain abstraction collaborative or competitive?
Lydia: Our definition says chain abstraction frees users from manual interaction—but its impact goes far beyond UX improvement. A deeper, less recognized implication is liquidity transformation. Chain abstraction fundamentally shifts the traditional TVL model—static, asynchronous, requiring pre-positioned assets on specific chains—into a dynamic model where assets are usable anytime, anywhere, with equal purchasing power across chains. It truly unlocks liquidity, which is the lifeblood of innovation in our industry. Under chain abstraction, the pace of competition and renewal among chains accelerates dramatically. The sole criterion becomes: do you have great applications? Chains can no longer monopolize by cloning existing systems. New chains won’t need massive marketing budgets to attract or retain TVL—they can focus from day one on specific use cases like payments, gaming, trading, or creator economies. This helps both chains and apps reach product-market fit faster. Regarding AI, current DeFai solutions—even if fully realized—focus narrowly on automating execution. But for AI to act, it needs on-chain identity and account systems. Emerging multi-chain AI agents like Griffain require separate wallet setups on every chain—an impractical burden. Ultimately, AI still depends on accounts and chain abstraction. And in my view, the transformative impact of chain abstraction on the industry far exceeds that of today’s AI-driven DeFai solutions.
Challenges Facing Chain Abstraction
Alex: Indeed, they seem more complementary across different modules. Once chain abstraction standards become widespread, AI will likely be integrated into various products built atop this architecture. Yet despite about a year-plus of development—possibly longer if counting intent’s emergence—chain abstraction hasn't spread rapidly. As you mentioned, Universal Accounts uses AA addresses to interact across chains, but many projects still don’t fully support AA. What are the main challenges or roadblocks facing chain abstraction projects today, and how is the industry addressing them?
Lydia: I can’t speak for others—they may have concerns, perhaps disagreements with Ethereum’s roadmap, etc. But since Particle is widely seen as a leader in chain abstraction, and I’ve been here over three months, let me share real challenges I’ve faced—likely representative ones. Ultimately, it boils down to user education. Chain abstraction is a new narrative, and Particle is a pioneer in this space—this places us squarely in the role of market pioneers and educators. It’s unavoidable for any innovation. We know it’s hard, but we’re not afraid—we believe history remembers trailblazers. Why is user education hard? On-chain activity grows fast, but user knowledge doesn’t keep pace. While the ecosystem seems full of users, most lack basic blockchain literacy. Many struggle with wallets, relying only on bots to “ape” in and out. UniversalX achieves maximum simplicity in product logic, but still requires users to understand self-custody—a non-negotiable principle for us. Just teaching this is challenging. When UniversalX launched, I spent weeks doing wallet customer support—repeatedly explaining to users that issues they faced stemmed from wallet usage or network problems, not our product. I’d guide them: “Go to your wallet, click this, then that.” Some wallets lack Chinese support, so I had to explain interface elements and troubleshooting steps. There’s no shortcut to user education. Fortunately, we’re a long-term team willing to invest time and effort into solving this.
Alex: Understood. So your assessment is that chain abstraction hasn’t achieved widespread adoption because both teams and projects are still in the early phase of user education. Yet this year saw obscure products rapidly gain massive user bases—like TG Bots such as MoonShot, used for MEME trading. They had no prior fame, yet exploded this cycle. Products like UniversalX share similarities—both are trading tools. How do you explain such divergent user growth trajectories?
Lydia: Whether Moonshot or TG Bots, it ultimately comes down to custody—self-custody vs. third-party custody. Our users lack foundational knowledge but are eager to profit from trading. In this historical phase, they’ve gravitated toward custodial bot products. But just as stablecoin projects are bound to collapse—people know it’s only a matter of time—TG Bots will eventually fail. It hasn’t happened to everyone yet. Veterans across cycles understand asset security, using cold wallets for segregation. But newcomers this cycle may have only used TG Bots, which haven’t been hacked yet—so they remain unaware. Our choice is clear: we won’t go down that path. We believe over time, security will be repeatedly emphasized—warning bells will ring. Eventually, users will realize: if a product matches or exceeds TG Bot speed (which we already do), while giving them full control without custody, then that’s where their primary funds should reside. That’s the product they’ll rely on going forward.
Predictions for Chain Abstraction
Alex: Understood. Indeed, TG Bots and similar products have seen numerous security incidents this cycle—including Banana Gun and DEXX, popular among Chinese speakers—resulting in significant user losses. Yet many still use centralized, custodial trading tools. Perhaps the risks and lessons haven’t been severe or widespread enough for new users to prioritize self-custody. If you were to make two or three predictions about chain abstraction’s development over the next one to two years, what would they be?
Lydia: Calling them predictions is really just expressing hopes. We’ve known each other a long time—transitioning from rational investor to startup builder inevitably exposes you to that contagious, incurable optimism found among founders. Lately, I keep saying—and maybe self-hypnotizing and evangelizing others—“Believe in the power of belief.” As an investor, that mindset would’ve bankrupted me long ago. But in startups, it somehow works. So what do I believe? I believe UniversalX will become a widely recognized, breakout next-generation trading product. I believe the potential of chain abstraction + trading will explode between 2025 and 2026. I believe all future DApps will be built with chain abstraction, unlocking higher ceilings and fostering greater innovation. Anyway—believe in the power of belief.
Alex: Great. Today, Lydia shared insights on chain abstraction, frequently referencing her current project at Particle Network, notably UniversalX. I want to clarify: this episode received no commercial sponsorship—we’re discussing the topic purely for its merit. Mature chain abstraction products are still scarce, and since Lydia works at Particle Network, she naturally drew examples from her own experience. To reiterate: no projects or products mentioned constitute investment advice. That’s all for today’s discussion on chain abstraction. Thanks, Lydia.
Lydia: Thank you everyone, bye bye.
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