FLUXLAYER: High-Performance Design for Cross-chain Fragmented Liquidity

ArXiv ID: 2505.09423 “View on arXiv”

Authors: Xin Lao, Shiping Chen, Qin Wang

Abstract

Autonomous Market Makers (AMMs) rely on arbitrage to facilitate passive price updates. Liquidity fragmentation poses a complex challenge across different blockchain networks. This paper proposes FluxLayer, a solution to mitigate fragmented liquidity and capture the maximum extractable value (MEV) in a cross-chain environment. FluxLayer is a three-layer framework that integrates a settlement layer, an intent layer, and an under-collateralised leverage lending vault mechanism. Our evaluation demonstrates that FluxLayer can effectively enhance cross-chain MEV by capturing more arbitrage opportunities, reducing costs, and improving overall liquidity.

Keywords: Automated Market Maker (AMM), Cross-chain Liquidity, Maximum Extractable Value (MEV), Arbitrage, DeFi, Crypto

Complexity vs Empirical Score

• Math Complexity: 3.5/10
• Empirical Rigor: 4.0/10
• Quadrant: Philosophers
• Why: The paper presents a high-level three-layer framework (settlement, intent, and leverage vault) focused on blockchain architecture and market structure, relying on conceptual argumentation and simulation results rather than dense mathematical derivations or rigorous backtested data.

  flowchart TD
    A["Research Goal:<br>Cross-chain AMM Liquidity Fragmentation"] --> B["Methodology: FluxLayer Framework<br>3-Layer Design"]
    B --> C{"Inputs: Arbitrage Opportunities &<br>Cross-chain Liquidity Data"}
    C --> D["Computational Process:<br>MEV Capture & Cost Optimization"]
    D --> E["Outcome 1: Enhanced<br>Cross-chain MEV"]
    D --> F["Outcome 2: Reduced<br>Transaction Costs"]
    D --> G["Outcome 3: Improved<br>Liquidity Utilization"]