UAT20: Unifying Liquidity Across Rollups

Abstract: Ethereum has been a cornerstone of the decentralized ecosystem, with rollup-based scaling solutions like Arbitrum and Optimism significantly expanding its capabilities. These rollups enhance scalability and foster innovation, but their rapid proliferation has introduced \emph{liquidity fragmentation}. Specifically, tokens distributed on multiple rollups fragment the liquidity of users, complicating participation in trading and lending activities bound by minimum liquidity thresholds. This paper proposes UAT20, a universal abstract token standard, to address liquidity fragmentation across rollups. Leveraging Conflict-free Replicated Data Types (CRDTs), UAT20 ensures consistent states across multiple rollups. We introduce a two-phase commit protocol to resolve transaction conflicts, enabling seamless and secure liquidity unification. Finally, our empirical analysis demonstrated the necessity and effectiveness of UAT20 in mitigating liquidity fragmentation within Rollups.