Architecture
Last updated
Last updated
Overview
funkybit’s architecture is designed to provide a robust, secure, and efficient platform for borrowing, cross-chain asset management, and high-performance interactions. The platform consists of several layers that handle transaction sequencing, off-chain processing, and Bitcoin L1 settlements.
Backend
API Layer: The API serves as the primary interface for external users and systems, supporting both WebSocket and REST connections. This layer provides real-time, flexible access to borrowing and cross-chain operations.
Gateway Server: Acts as the conduit between the API layer and the funkybit sequencer, leveraging gRPC for low-latency communication, ensuring efficient data transmission and command processing.
Borrowing and Cross-Chain Engine
State Machine Model: The borrowing and cross-chain engine operates as a deterministic state machine, ensuring all transactions—including borrowing requests, on-chain balance changes, and cross-chain operations—are reproducible and verifiable. Each transaction is processed in sequence, maintaining perfect consistency.
Performance Attributes: funkybit’s system can handle up to 1,000,000 messages per second with sub-microsecond latency, enabling rapid execution of borrowing and asset transfers.
Settlement
Execution and Settlement: Once a borrowing request or cross-chain operation is processed, the sequencer transmits the matched updates to the settlement layer. This layer batches and finalizes settlements, ensuring efficient and reliable processing on Bitcoin L1.
Cross-chain Functionality: funkybit operates native settlement contracts on Bitcoin and other supported chains, allowing users to deposit assets into these contracts. Credits are issued after sufficient confirmations, and withdrawals can occur natively, eliminating reliance on third-party bridges.
Security and Verification funkybit employs cutting-edge cryptographic methods and economic incentives to ensure the security and integrity of its platform. The use of zk-SNARK validity proofs and a bonded security model ensures that the platform operates transparently and honestly.
Validity Proofs: Each settlement epoch generates a zk-SNARK proof that guarantees proper operation of the sequencer. This includes verifying time/price priority for transactions, signed orders in accordance with EIP-712, and confirming that sufficient collateral exists for borrowing operations. Bitcoin L1 verifies these proofs as part of the final settlement.
Economic Security Measures: The sequencer’s integrity is ensured by a bond of staked $FUNK tokens, which guarantees financial repercussions for dishonest behavior. Challengers who wish to contest the sequencer’s actions must also post a bond, incentivizing accuracy and honesty within the protocol.
Borrowing Mechanism funkybit’s borrowing functionality allows users to post collateral on Bitcoin L1 and borrow assets across supported chains, leveraging Bitcoin’s security while maintaining full transparency through zk-SNARK proofs. Borrowing requests are processed within the same sequencer framework, and users can verify the collateral and borrowing terms at any time.