In the next few threads, I will do a deep dive into EIL - Ehtereum Interoperabiliy Layer. The protocol allows for trust-minimized cross-chain execution with many interesting use cases and it's worth building intuition around it. This is Part 1 of the explainer 🧵👇

For a gentle intro and some test transactions, you can have a quick look at my previous thread and @l2beat summary. TL/DR - EIL allows you to self-execute x-chain transactions, hence removing trust assumptions associated with intermediaries /2

Most other x-chain protocols introduce intermediaries - relayers, solvers, oracles, etc... each intermediary - depending on a protocol, can potentially harm you - steal, freeze, grief, etc... you need to trust that they behave properly /3

Building trustless protocols is very hard, and EIL is no exception. It has many moving parts, and I would consider it to be very complicated, but that's what it takes to build trustless protocols. One more reason to learn how it works 💪 /4

At its core EIL is an HLTC protocol. If you don't know what it is, it's a trustless atomic swap where you exchange some funds on one chain with a counterparty on another chain /5

Classic HLTC protocols rely on exchanging "secrets" (cryptographic hashes) and - while fully trustless - suffer from bad UI as the exchange is somewhat cumbersome /6

EIL does not rely on exchanging "secrets" - instead you can think about it as an optimistic version of HLTC. When everything goes according to a plan (optimistically) - it's very fast. If either party is malicious - there is a somewhat complicated dispute mechanism involved /7

In EIL Alice (the user) who has funds on SRC chain and wants to execute tx on DST chain, will swap her SRC funds for DST funds of Bobby (x-chain liquidity provider). These DST funds will be used to perform DST transaction, while some time later Bobby will retrieve Alice's funds /8

Let's look at the example of Alice wanting to buy NFT on DST 1. Alice deposits funds on SRC 2. Bobby, seeing this, issues a short-term voucher 3. Alice's uses this voucher to perform tx on DST 4. Bobby claims Alice's funds on SRC /9

So how come Alice can use Bobby's voucher on DST ? A fairly standard AA Paymaster mechanism is used here - on DST there is a special type of Paymaster (x-chain Paymaster) that keeps Bobby's funds and - if presented with Bobby's voucher - will fund Alice's transaction /10

What about UI for Alice ? Does it mean she has to sign two transactions ? Sound terrible, no ? Turns out she only has to sign once (both tx 1 and 3 as a bundle). Her wallet will dispatch tx1 to SRC, wait for Bobby's Voucher and dispatch tx2 to DST w/out Alice even noticing it /11