Minitswap

Minitswap is Initia's proprietary solution to address the user experience challenges posed by the lengthy withdrawal challenge periods of optimistic bridges. Furthermore, while a longer challenge period increases the duration in which a challenge can be made, it simultaneously increases the wait time required for withdrawals.

Motivation

While optimistic token bridges between a Layer 1 (L1) and a Layer 2 (L2) chain provides a secure way of transferring assets between chains, it comes with various downsides:

- Long Withdrawal Times: Transferring tokens from L1 to L2 is usually instantaneous, but the reverse direction involves long wait times, often days, before receiving assets on L1.

- Single Sequencer Risks: Creating a DEX pair between the original token on L1 and the bridged tokens can mitigate long withdrawal times. However, most L2s currently operate with a single sequencer, raising security, reliability, and centralization concerns for liquidity providers.

- Lack of Liquidity: The sequencer risk issues can result in insufficient liquidity in the token pool, leading to unfavorable swap prices, high volatility, and significant slippage for users bridging tokens back to L1.

Solution

The Minitswap DEX is then to designed to allow users to freely, quickly, and efficiently bridge tokens between Initia L1 and Minitias. Users looking to bridge back to Initia L1 from a minitia can simply utilize Minitswap (along with IBC) to swap their tokens back to INIT without waiting for the challenge period to expire.