PARSIQ’s Reactive Network Makes Cross-Chain Trading Easier

PARSIQ is making lots of headlines in Web3 infrastructure. We already like their API tools and their querying and data-organizing features for blockchains. Then, they launched their new Reactive Network with Reactive Smart Contracts. This upgrade to smart contract tech is going to change the game in many areas including trading.

PARSIQ’s Reactive Network will make trading on-chain and across chains easier than ever. Let’s see how.

Review of Reactive Smart Contracts

Current smart contract tech requires other tools like oracles like Chainlink to bring info like price feeds into a smart contract for trading. That’s because smart contracts can’t take info that’s off-chain and bring it on-chain. They also can’t transfer data that happens on one chain to another one.

Until now.

Our full intro with all the cool new functionality we get from Reactive Smart Contracts is right here.

But think of the implications of this. Games for example can more easily go cross-chain or multi-chain in their setup and gameplay. This means more access for more people to more games.

But today we are going to look at trading.

How Reactive Smart Contracts Improve Trading

The process of cross-chain arbitrage could be about to change forever, lets take a closer look 🔍https://t.co/NwGfNE7Ldp

— Reactive Network | powered by PARSIQ (@0xReactive) April 23, 2024

The Reactive Network and Reactive Smart Contracts help most in the area of arbitrage trading. We’ve all seen this before. A big cap like BNB or ETH or even Bitcoin has different prices on different exchanges. Or sometimes USDC trades for 99.6c in one place and $1.005 somewhere else.

If you could trade these, then you would be making money with no risk by buying and selling the same asset. That’s arbitrage.

And if we can take price information from one chain or DEX and use it on another, then that’s arbitrage too. And with Reactive Smart Contracts you can.

You would need NO off-chain components like a CEX or a price feed. If set up correctly, everything would be done on-chain. Plus, there’s no delays (latency) in getting off-chain info into the on-chain components. This is a key factor since arbitrage opportunities like the one for USDC I used above are often very short term only lasting a couple of minutes.

With all on-chain components, this works much better than the off-chain methods of arbitrage now. Trading bots.

In this case, the Reactive Network and its Reactive Smart Contracts (RSC) are “reacting” to an action on one chain like BSC, and taking that reaction to initiate a trade on another chain like the Avalanche C-Chain. You can also configure and change the logic in the contract the same way you’d set up a bot to only alert you when you reach certain conditions.

To go back to our USDC example, you don’t want to set an alert every time the price drops below 99.5 cents. After all, it could be dropping everywhere on all chains due to a depeg event of some kind. That doesn’t help us. But showing when there is a differentiation in prices, then we have something we can work with.

You can even prioritize your transaction in the RSC set up to pay higher gas fees to ensure your transaction goes through. And with small price discrepancies like this, that’s vital. A failed transaction usually means a closed window to the arbitrage opportunity, too.

If you want to learn more about PARSIQ and its Reactive Network and Reactive Smart Contracts, then go here and check them out. We looked at arbitrage today but there are lots of great use cases for RSCs. You can probably think of some on your own for your favorite crypto sector.