30s Summary

Magic Labs and Polygon Labs have partnered to develop a smart wallet called the Newton testnet to tackle the problem of ‘liquidity fragmentation’ in blockchain platforms. Newton aims to streamline transactions across multiple blockchains, providing free tools, global liquidity, and enabling launches from a single platform. The move is part of a broader trend noticed in 2024 towards efficiency in cryptocurrency transactions. Similar efforts are being made by Orderly Network by raising $5 million from investors, and Axelar. Magic Labs, backed by heavyweights such as PayPal and Placeholder, was a pioneer in wallet abstraction.

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So, here’s the scoop, Magic Labs and Polygon Labs have teamed up to create a smart wallet! This wallet is designed to help sort out some of the chaos that comes with having your assets and trading spread out over a lot of blockchain platforms. We call these problems ‘liquidity fragmentation’, and it can really slow things down and make things more expensive for users.

The new wallet, called the Newton testnet, comes as part of a solution called AggLayer. The aim is to make transactions over multiple blockchains smooth and easy, kinda like how HTML or HTTP keeps everything running on the internet you’re using right now. Newton is built using Polygon CDK, and it’s aiming to give out free tools, have global liquidity, and allow launches across different chains all from one place.

If you’re wondering why this matters, the answer is simple: efficiency. The more efficiently things work, the better experience for users, and that’s what we’re all aiming for, right? A bunch of protocols and venture firms have picked up on this in 2024, so I think we can expect to see more of these kinds of innovations.

But it’s not just Magic Labs and Polygon Labs fighting liquidity fragmentation. Startups like Orderly Network are doing their bit too, raising $5 million from investors to bring together onchain transactions across different blockchains. Another company, Axelar, has dedicated itself entirely to this cause, combining onchain and offchain systems across various networks.

“The unification of chains is inevitable,” says Sean Li, co-founder and CEO of Magic Labs. “It’s like ACH or SWIFT for crypto.” Magic Labs, backed by some big names like PayPal, Placeholder and Lightspeed, plus investors like Balaji Srinivasan, was one of the first to introduce wallet abstraction. They’ve managed to bring on over 35 million users and 200k developers through decentralised applications.