Protocol Overview
Core Mechanism
ODX functions as a mint-burn protocol with 100% collateralized asset wrapping. The protocol enables three primary flows:
Understanding these flows reveals how ODX bridges the gap between isolated blockchain ecosystems, unleashing trapped liquidity and enabling yield optimization.
Key Protocol Flows
- Issuance Flow: Users deposit native assets and receive equivalent xAssets on Sonic
- Redemption Flow: Users burn xAssets to retrieve their native assets from source chains
- Cross-Chain Trade Flow: Users directly swap USDC for xAssets without acquiring native assets first
Issuance Flow: Bringing Assets to Sonic
Deposit Initiation
User deposits a native asset into the Source Chain Vault, specifying their Sonic destination address
Validator Verification
ODX Validator Network observes and confirms the deposit transaction’s finality
Consensus Generation
Validators execute BFT consensus to aggregate threshold signatures into a single proof
Cross-Chain Verification
The aggregated validator proof moves to the ODX Sonic Router for verification
Asset Minting
The Sonic xAsset Contract mints the equivalent xAsset based on validated parameters
Asset Receipt
The specified destination address receives newly minted xAssets on Sonic with 1:1 value
Redemption Flow: Reclaiming Native Assets
Burn Initiation
User burns their xAsset on Sonic, specifying a recipient address on the source chain
Event Emission
The xAsset Contract emits a cryptographically verifiable burn event with redemption details
Event Monitoring
The Validator Network captures and validates the burn event data from Sonic
Signature Aggregation
Validators use a threshold signature scheme to generate a secure, aggregated proof
Release Authorization
Validators submit the cryptographically-secured release authorization to the Source Chain Vault
Asset Transfer
After verification, the Vault transfers the native asset to the specified recipient address
Cross-Chain Trade Flow: Seamless USDC to xAsset Conversion
Process Overview
Seamless Asset Acquisition Without Bridging
- User sends USDC to the ODX Sonic Contract to purchase a specific xAsset
- Validators observe this purchase request and coordinate execution
- Source Chain Vault acquires the native asset using USDC through optimal DEX routes
- Once the native asset is secured in the vault, validators authorize xAsset minting
- User receives the requested xAsset directly on Sonic
This flow eliminates the need for users to first acquire and bridge native assets, creating a frictionless entry point to the Sonic ecosystem.
Building on the ODX Foundation
The core architecture enables numerous DeFi use cases, including:
Yield Aggregation
Automatically directs assets to highest-yielding opportunities across chains
Cross-Chain Collateral
Uses native assets as collateral for borrowing on Sonic without losing staking rewards
Liquidity Bootstrapping
Rapidly deploys deep liquidity for new Sonic DeFi protocols
Unified Yield Strategies
Creates complex strategies leveraging assets and opportunities across multiple chains