The Composable Future

"The web does not just connect machines, it connects people." -Tim Berners-Lee
Symbolic Capital
October 22, 2024
Research
The Composable Future

It’s 2050 and there are a million blockchains. 

Decentralized networks are as common as servers on the Internet and value flows as seamlessly onchain as information online. 

All types of protocols work in harmony, each optimized for a specific function. There are permissioned rollups for cross border settlement between national banks, appchains optimized for DeFi use cases, based rollups for maximum Ethereum alignment and sovereign L1s customized at every level of the stack. 

It’s a beautiful future and the end game for the modular thesis. 

But this dream has a major asterisk – how do we solve for fragmentation across these ecosystems? What technology can turn all these siloed clusters of state into a unified, composable web3? 

Traditional Bridges 

There have been a variety of proposed solutions to blockchain fragmentation. The first major attempt was bridges. Bridges were designed to allow the transfer of assets between blockchains, enabling users to move tokens from one chain to another. This was the earliest form of cross-chain interoperability, but it was far from perfect.

The most common type of bridge, known as lock-and-mint, involved locking an asset on the source chain (Chain A) and minting a corresponding wrapped version on the destination chain (Chain B). When the user wanted to reverse the transaction, they would burn the wrapped asset on Chain B and unlock the original on Chain A.

While this solution allowed assets to move between chains, it came with significant drawbacks:

  • Asynchronous Execution: Bridges could only move assets, but they couldn’t guarantee that actions on one chain would automatically be reflected on another. Each chain operated independently, meaning transactions weren’t truly atomic, and users were left exposed to the risk of bridge failures or long delays.
  • Security Risks: Bridges are frequent targets for hacks due to their reliance on centralized components like oracles and validators to manage cross-chain transfers. These single points of failure have resulted in billions of dollars lost in bridge attacks.
  • Liquidity Fragmentation: Bridges inherently fragmented liquidity by creating multiple representations of the same asset across different chains. For example, there could be several versions of wrapped ETH, each tied to a different bridge, making it harder for users to consolidate and manage liquidity across chains.

Bridges treated only the symptoms of fragmentation, not the root cause. They allowed asset transfers, but didn’t address the deeper issue of siloed chains unable to communicate or execute transactions together.

In the end, bridges were a stopgap—helpful for early cross-chain activity but inadequate for the seamless, composable web3 future we envision.

Shared Sequencers

The next solution for blockchain fragmentation has been shared sequencers. Pioneered by companies like Espresso Systems, shared sequencers allow multiple L2s to bundle cross-chain transactions into a single block, targeting fragmentation at a deeper layer of the stack.

This offers two key advantages: improved decentralization for rollups and partial composability between chains. For most L2s, building their own decentralized sequencers is complex and resource-intensive. Shared sequencers, by contrast, provide a more scalable and cost-effective solution, decentralizing transaction ordering across multiple chains at once.

However, while shared sequencers improve decentralization, they fall short when it comes to true cross-chain composability. The reason? Shared sequencers can only guarantee atomic inclusion, not atomic execution. This means that while transactions can be bundled across chains, they aren’t guaranteed to succeed together.

Why is this important? Because if one transaction in the bundle fails—say, due to insufficient funds on one chain—you could end up with mismatched results: paying for something on one chain without receiving the asset on another or getting something for free.

The root of the problem is that shared sequencers aren't state-aware. They lack visibility into the current state of each chain, so while they can bundle transactions, they can’t verify their validity before finalizing them. This can lead to messy outcomes like chain reorgs (rollbacks) to restore a valid state, disrupting the user experience and leaving the system vulnerable to security issues.

We are left at a crossroads. Shared sequencers made significant, but incomplete strides toward a composable web3. But in order to reach true composability, a solution must be able to provide both atomic inclusion and atomic execution. 

Superbuilders

Enter Superbuilders.

Superbuilders are specialized block producers that build blocks for multiple chains at the same time. Just as apps on Ethereum are composable because they share a state-aware block producer, chains leveraging a Superbuilder are composable because they share block production with multiple networks, allowing seamless and atomic execution of cross-chain transactions. This means that Superbuilder unified chains are guaranteed that transactions will not only be included but also executed simultaneously, which is extremely important to a wide range of cross-chain use cases. 

In June 2024, NodeKit announced the first Superbuilder, Javelin. Besides being the first to deliver true cross-chain composability, Javelin allows networks to bootstrap quickly without needing to seed their own liquidity. This provides significant benefits to chains, accelerating growth and user adoption. 

Superbuilders effectively make dApps multi-chain,  enabling them to tap into users and liquidity across several chains at once. For users, this creates a unified experience. Just as we use one bank account to shop at multiple stores without holding separate balances, users can hold assets on one chain while interacting with apps across other networks. Simplifications like these, enabled by cross-chain composability, will be crucial to achieving that “it just works” user experience.

Composability & Abstraction

Whatever the solution, it is clear that composability at scale is crucial to the modular thesis as it is not only critical for bootstrapping new ecosystems but also serves as the gateway to powerful abstraction products. Abstraction simplifies the blockchain experience from asset management to cross-chain transactions.

One example is solvers, which will leverage composability to execute cross-chain intents via atomic bundles. Solvers act as automated agents that bundle complex, multi-step transactions across chains into a single atomic action, ensuring that everything executes seamlessly or not at all. Combined with AI agents, users can simply state their intent—whether it’s moving funds, executing trades, or optimizing yield—and watch as a solver automates these multi-stage transactions.

Chain Abstraction protocols will also use composability to create a unified user experience. Instead of managing fragmented balances across chains, users will interact through a single account, with access to liquidity and applications across multiple networks. This creates a frictionless, “one account” experience for all onchain interactions, opening the door to a wave of composable applications and use cases.

Composable Use Cases 

The most obvious sector to be impacted is trading. Through DEX aggregators and perpetual swaps powered by automated liquidity provisioning, users will have access to the best pricing across multiple markets. This enables decentralized exchanges to compete with centralized counterparts, while also unlocking new capabilities like global cross-margining, safer lending protocols, and decentralized credit scoring. These innovations will drive greater financial access and efficiency, all within a fully decentralized framework.

Composability will also pave the way for web3 super-apps, which integrate multiple decentralized services—DeFi, digital assets, social networking, and more—into one seamless platform. We might finally be able to achieve the oft-cited vision of an “onchain WeChat,” where users can manage their financial transactions, digital assets, and social interactions all from a single account that spans multiple chains. 

A New Global System

Perhaps most importantly, composability has the potential to revolutionize the global economic system. In a future with a million blockchains, every business and organization, regardless of nation or sector, will interact seamlessly onchain. Simultaneously, a permissionless crypto-native economy will emerge, running in parallel.

However, this vision can only succeed if these permissioned and permissionless ecosystems come together in a fully connected financial infrastructure. Composability makes this seamless transformation possible. For traditional finance, the implications are profound: payments will be faster, securities settlements more efficient, and foreign exchange risks reduced, all while tapping into a truly global pool of value.

For the crypto-native ecosystem, composability unlocks new levels of interoperability and efficiency. Decentralized applications will seamlessly aggregate liquidity, execute cross-chain transactions, and deliver the kind of user experience necessary for mass adoption. Innovations like cross-chain flash loans, interchain DeFi, and multi-chain digital assets will flourish, creating a unified web3 where users no longer think in terms of separate chains, but simply interact with a single, seamless network of applications.

Composability is not a distant vision. It’s the foundational layer of a future where blockchain networks interoperate as effortlessly as the web does today. The transformation is already unfolding, quietly reshaping the architecture of finance and the digital economy.

Disclosures

Legal Disclosure: This document, and the information contained herein, has been provided to you by Hyperedge Technology LP and its affiliates (“Symbolic Capital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Symbolic Capital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice or is an endorsement of any of the digital assets or companies mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Certain statements in this document reflect Symbolic Capital’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Symbolic Capital’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Symbolic Capital nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Symbolic Capital and, Symbolic Capital, does not assume responsibility for the accuracy of such information. Affiliates of Symbolic Capital may have owned or may own investments in some of the digital assets and protocols discussed in this document. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. This document provides links to other websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Symbolic Capital. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by Symbolic Capital Partners LLC. For all inquiries, please email info@symbolic.capital. © Copyright Hyperedge Capital LP 2024. All rights reserved.

It’s 2050 and there are a million blockchains. 

Decentralized networks are as common as servers on the Internet and value flows as seamlessly onchain as information online. 

All types of protocols work in harmony, each optimized for a specific function. There are permissioned rollups for cross border settlement between national banks, appchains optimized for DeFi use cases, based rollups for maximum Ethereum alignment and sovereign L1s customized at every level of the stack. 

It’s a beautiful future and the end game for the modular thesis. 

But this dream has a major asterisk – how do we solve for fragmentation across these ecosystems? What technology can turn all these siloed clusters of state into a unified, composable web3? 

Traditional Bridges 

There have been a variety of proposed solutions to blockchain fragmentation. The first major attempt was bridges. Bridges were designed to allow the transfer of assets between blockchains, enabling users to move tokens from one chain to another. This was the earliest form of cross-chain interoperability, but it was far from perfect.

The most common type of bridge, known as lock-and-mint, involved locking an asset on the source chain (Chain A) and minting a corresponding wrapped version on the destination chain (Chain B). When the user wanted to reverse the transaction, they would burn the wrapped asset on Chain B and unlock the original on Chain A.

While this solution allowed assets to move between chains, it came with significant drawbacks:

  • Asynchronous Execution: Bridges could only move assets, but they couldn’t guarantee that actions on one chain would automatically be reflected on another. Each chain operated independently, meaning transactions weren’t truly atomic, and users were left exposed to the risk of bridge failures or long delays.
  • Security Risks: Bridges are frequent targets for hacks due to their reliance on centralized components like oracles and validators to manage cross-chain transfers. These single points of failure have resulted in billions of dollars lost in bridge attacks.
  • Liquidity Fragmentation: Bridges inherently fragmented liquidity by creating multiple representations of the same asset across different chains. For example, there could be several versions of wrapped ETH, each tied to a different bridge, making it harder for users to consolidate and manage liquidity across chains.

Bridges treated only the symptoms of fragmentation, not the root cause. They allowed asset transfers, but didn’t address the deeper issue of siloed chains unable to communicate or execute transactions together.

In the end, bridges were a stopgap—helpful for early cross-chain activity but inadequate for the seamless, composable web3 future we envision.

Shared Sequencers

The next solution for blockchain fragmentation has been shared sequencers. Pioneered by companies like Espresso Systems, shared sequencers allow multiple L2s to bundle cross-chain transactions into a single block, targeting fragmentation at a deeper layer of the stack.

This offers two key advantages: improved decentralization for rollups and partial composability between chains. For most L2s, building their own decentralized sequencers is complex and resource-intensive. Shared sequencers, by contrast, provide a more scalable and cost-effective solution, decentralizing transaction ordering across multiple chains at once.

However, while shared sequencers improve decentralization, they fall short when it comes to true cross-chain composability. The reason? Shared sequencers can only guarantee atomic inclusion, not atomic execution. This means that while transactions can be bundled across chains, they aren’t guaranteed to succeed together.

Why is this important? Because if one transaction in the bundle fails—say, due to insufficient funds on one chain—you could end up with mismatched results: paying for something on one chain without receiving the asset on another or getting something for free.

The root of the problem is that shared sequencers aren't state-aware. They lack visibility into the current state of each chain, so while they can bundle transactions, they can’t verify their validity before finalizing them. This can lead to messy outcomes like chain reorgs (rollbacks) to restore a valid state, disrupting the user experience and leaving the system vulnerable to security issues.

We are left at a crossroads. Shared sequencers made significant, but incomplete strides toward a composable web3. But in order to reach true composability, a solution must be able to provide both atomic inclusion and atomic execution. 

Superbuilders

Enter Superbuilders.

Superbuilders are specialized block producers that build blocks for multiple chains at the same time. Just as apps on Ethereum are composable because they share a state-aware block producer, chains leveraging a Superbuilder are composable because they share block production with multiple networks, allowing seamless and atomic execution of cross-chain transactions. This means that Superbuilder unified chains are guaranteed that transactions will not only be included but also executed simultaneously, which is extremely important to a wide range of cross-chain use cases. 

In June 2024, NodeKit announced the first Superbuilder, Javelin. Besides being the first to deliver true cross-chain composability, Javelin allows networks to bootstrap quickly without needing to seed their own liquidity. This provides significant benefits to chains, accelerating growth and user adoption. 

Superbuilders effectively make dApps multi-chain,  enabling them to tap into users and liquidity across several chains at once. For users, this creates a unified experience. Just as we use one bank account to shop at multiple stores without holding separate balances, users can hold assets on one chain while interacting with apps across other networks. Simplifications like these, enabled by cross-chain composability, will be crucial to achieving that “it just works” user experience.

Composability & Abstraction

Whatever the solution, it is clear that composability at scale is crucial to the modular thesis as it is not only critical for bootstrapping new ecosystems but also serves as the gateway to powerful abstraction products. Abstraction simplifies the blockchain experience from asset management to cross-chain transactions.

One example is solvers, which will leverage composability to execute cross-chain intents via atomic bundles. Solvers act as automated agents that bundle complex, multi-step transactions across chains into a single atomic action, ensuring that everything executes seamlessly or not at all. Combined with AI agents, users can simply state their intent—whether it’s moving funds, executing trades, or optimizing yield—and watch as a solver automates these multi-stage transactions.

Chain Abstraction protocols will also use composability to create a unified user experience. Instead of managing fragmented balances across chains, users will interact through a single account, with access to liquidity and applications across multiple networks. This creates a frictionless, “one account” experience for all onchain interactions, opening the door to a wave of composable applications and use cases.

Composable Use Cases 

The most obvious sector to be impacted is trading. Through DEX aggregators and perpetual swaps powered by automated liquidity provisioning, users will have access to the best pricing across multiple markets. This enables decentralized exchanges to compete with centralized counterparts, while also unlocking new capabilities like global cross-margining, safer lending protocols, and decentralized credit scoring. These innovations will drive greater financial access and efficiency, all within a fully decentralized framework.

Composability will also pave the way for web3 super-apps, which integrate multiple decentralized services—DeFi, digital assets, social networking, and more—into one seamless platform. We might finally be able to achieve the oft-cited vision of an “onchain WeChat,” where users can manage their financial transactions, digital assets, and social interactions all from a single account that spans multiple chains. 

A New Global System

Perhaps most importantly, composability has the potential to revolutionize the global economic system. In a future with a million blockchains, every business and organization, regardless of nation or sector, will interact seamlessly onchain. Simultaneously, a permissionless crypto-native economy will emerge, running in parallel.

However, this vision can only succeed if these permissioned and permissionless ecosystems come together in a fully connected financial infrastructure. Composability makes this seamless transformation possible. For traditional finance, the implications are profound: payments will be faster, securities settlements more efficient, and foreign exchange risks reduced, all while tapping into a truly global pool of value.

For the crypto-native ecosystem, composability unlocks new levels of interoperability and efficiency. Decentralized applications will seamlessly aggregate liquidity, execute cross-chain transactions, and deliver the kind of user experience necessary for mass adoption. Innovations like cross-chain flash loans, interchain DeFi, and multi-chain digital assets will flourish, creating a unified web3 where users no longer think in terms of separate chains, but simply interact with a single, seamless network of applications.

Composability is not a distant vision. It’s the foundational layer of a future where blockchain networks interoperate as effortlessly as the web does today. The transformation is already unfolding, quietly reshaping the architecture of finance and the digital economy.

Disclosures

Legal Disclosure: This document, and the information contained herein, has been provided to you by Hyperedge Technology LP and its affiliates (“Symbolic Capital”) solely for informational purposes. This document may not be reproduced or redistributed in whole or in part, in any format, without the express written approval of Symbolic Capital. Neither the information, nor any opinion contained in this document, constitutes an offer to buy or sell, or a solicitation of an offer to buy or sell, any advisory services, securities, futures, options or other financial instruments or to participate in any advisory services or trading strategy. Nothing contained in this document constitutes investment, legal or tax advice or is an endorsement of any of the digital assets or companies mentioned herein. You should make your own investigations and evaluations of the information herein. Any decisions based on information contained in this document are the sole responsibility of the reader. Certain statements in this document reflect Symbolic Capital’s views, estimates, opinions or predictions (which may be based on proprietary models and assumptions, including, in particular, Symbolic Capital’s views on the current and future market for certain digital assets), and there is no guarantee that these views, estimates, opinions or predictions are currently accurate or that they will be ultimately realized. To the extent these assumptions or models are not correct or circumstances change, the actual performance may vary substantially from, and be less than, the estimates included herein. None of Symbolic Capital nor any of its affiliates, shareholders, partners, members, directors, officers, management, employees or representatives makes any representation or warranty, express or implied, as to the accuracy or completeness of any of the information or any other information (whether communicated in written or oral form) transmitted or made available to you. Each of the aforementioned parties expressly disclaims any and all liability relating to or resulting from the use of this information. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Symbolic Capital and, Symbolic Capital, does not assume responsibility for the accuracy of such information. Affiliates of Symbolic Capital may have owned or may own investments in some of the digital assets and protocols discussed in this document. Except where otherwise indicated, the information in this document is based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. This document provides links to other websites that we think might be of interest to you. Please note that when you click on one of these links, you may be moving to a provider’s website that is not associated with Symbolic Capital. These linked sites and their providers are not controlled by us, and we are not responsible for the contents or the proper operation of any linked site. The inclusion of any link does not imply our endorsement or our adoption of the statements therein. We encourage you to read the terms of use and privacy statements of these linked sites as their policies may differ from ours. The foregoing does not constitute a “research report” as defined by FINRA Rule 2241 or a “debt research report” as defined by FINRA Rule 2242 and was not prepared by Symbolic Capital Partners LLC. For all inquiries, please email info@symbolic.capital. © Copyright Hyperedge Capital LP 2024. All rights reserved.