Cross-chain

Architecture Overview

Hub-and-Spoke Model

xTokens are omnichain OFTs that use a hub-and-spoke architecture powered by LayerZero V2:

┌─────────────┐         ┌─────────────┐         ┌─────────────┐
│   Arbitrum  │         │   HyperEVM  │         │   Ethereum  │
│   (Spoke)   │◄───────►│    (Hub)    │◄───────►│   (Spoke)   │
└─────────────┘         └─────────────┘         └─────────────┘

HyperEVM (Hub)

Where the strategy lives:

  • Logic and asset management

  • NAV tracking and share price calculation

  • Liquidity management for instant redemptions

  • Share minting and burning

Spoke Chains (Arbitrum, Ethereum..)

Where users interact:

  • OFT (Omnichain Fungible Token) contracts for assets and shares

  • Cross-chain message composition

  • Local balance tracking via LayerZero

Cross-Chain Flow

Deposit Flow

Example: Deposit from Arbitrum (Spoke) → HyperEVM (Hub) → Ethereum (Spoke)

  1. User deposits USDT0 on Arbitrum

  2. USDT0 OFT sends tokens to Hub (HyperEVM) via LayerZero

  3. Composer receives compose message on Hub

  4. DepositPipe accepts USDT0, mints shares to user

  5. LayerZero Composer sends shares to Ethereum

  6. User receives xTokens on Ethereum

Example: Deposit from Arbitrum (Spoke) → HyperEVM (Hub)

  1. User deposits USDT0 on Arbitrum

  2. USDT0 OFT sends tokens to HyperEVM (hub) via LayerZero

  3. LayerZero Composer receives the compose message on HyperEVM

  4. DepositPipe accepts the USDT0 and mints shares

  5. User receives xTokens on HyperEVM

Example: Deposit from HyperEVM (Hub) → Ethereum (Spoke)

  1. User deposits USDT0 directly on HyperEVM

  2. DepositPipe mints shares immediately

  3. LayerZero Composer sends the minted shares to Ethereum

  4. User receives xTokens on Ethereum

Redemption Flow

LayerZero composer only handle synchronous operations, therefore making it only possible to perform instant redemption using the cross-chain infrastructure. If the user wants a standard redemption he needs to bridge his shares on HyperEVM.

Example: Redeem from Ethereum (Spoke) → HyperEVM (Hub)

  1. User sends xToken shares from Ethereum via LayerZero

  2. Shares arrive on HyperEVM (hub)

  3. Redemption is performed, shares are burned and USDT0 released to the user on HyperEVM

Example: Redeem from HyperEVM (Hub) → Ethereum (Spoke)

  1. User perform the redemption on HyperEVM to redeem shares

  2. Shares are burned and USDT0 is released

  3. LayerZero sends the USDT0 to Ethereum

  4. User receives USDT0 on Ethereum

Example: Redeem from Arbitrum (Spoke) → HyperEVM (Hub) → Ethereum (Spoke)

  1. User sends shares from Arbitrum using LayerZero

  2. Shares arrive on HyperEVM (hub)

  3. Redemption is performed, burns the shares and releases USDT0

  4. USDT0 are sent to Ethereum using LayerZero

  5. User receives USDT0 on Ethereum

Bridge flow

xTokens are omnichain OFTs, meaning bridging simply moves your xToken shares from one chain to another without interacting with the underlying strategy. No minting, burning, or position changes occur during a bridge. Only the chain location of your shares changes.

Example: Bridge from Arbitrum → HyperEVM

  1. User initiates a bridge of xToken shares on Arbitrum

  2. LayerZero sends the shares to HyperEVM

  3. Shares arrive on HyperEVM and are credited to the user

  4. No redemption, no minting, only a chain transfer

  5. User now holds the same xToken shares on HyperEVM

PreviousComposability and DeFiNextDevelopers

Last updated