Description

Polaris is a cross-chain swap protocol that extends the 1inch Fusion+ architecture to connect the Native Bitcoin and Lightning Network ecosystem with EVM-compatible blockchains. Built for ETHGlobal Unite 2025, it solves the critical problem of Bitcoin's isolation from DeFi liquidity networks.

The Problem We Solve

While 1inch Fusion+ enables trustless swaps between EVM chains and Solana, Bitcoin—holding over $1.9 trillion in value—remains mostly isolated. Users have to rely on centralized bridges with custody risks, high fees, and slow settlement times, or simply can't access cross-chain opportunities at all.

Our Solution

Polaris implements a trustless, intent-based swap protocol that treats Bitcoin's Lightning Network as a native HTLC (Hash Time-Locked Contract) system. By leveraging Lightning's HODL invoices and native Bitcoin scripting, we enable:

• Instant Bitcoin Swaps: Sub-second settlements via Lightning Network instead of 60-minute Bitcoin confirmations
• True Atomic Swaps: No bridges, no wrapped tokens—pure cryptographic guarantees ensure trustless execution
• Gasless UX: Users only sign intents; professional resolvers handle all gas costs and execution
• Unified Liquidity: Connects Bitcoin's massive liquidity to EVM ecosystems, improving rates and reducing slippage

How It Works

1. Users create swap intents specifying source/destination assets and amounts
2. Automated resolvers monitor these intents and compete to fulfill them
3. Smart contracts on EVM chains lock funds using HTLCs with SHA256 hash locks
4. Lightning invoices or Bitcoin scripts create matching HTLCs on the Bitcoin side
5. Atomic execution ensures either both sides complete or neither does—no trust required

Technical Innovation

• Lightning-as-HTLC: First protocol to use Lightning HODL invoices as native HTLCs for cross-chain swaps
• Dual Bitcoin Support: Handles both Lightning (instant) and on-chain Bitcoin (secure but slower)
• Intent-Based Architecture: Users express desired outcomes; resolvers handle complex execution
• Opinionated UX/UI: ¯_(ツ)_/¯

Polaris demonstrates that Bitcoin doesn't need to remain isolated—with the right cryptographic primitives and architecture, it can participate fully in the cross-chain future of finance.

How it's made

Core Technology Stack

Frontend

• Next.js 15 with App Router for server-side rendering and optimal performance
• TypeScript for type-safe development across the entire codebase
• Ethers.js v6 for Web3 interactions and wallet connections

Backend & Infrastructure

• Next.js API Routes for serverless backend endpoints
• Supabase (PostgreSQL) for real-time order tracking and swap state management
• WebSocket connections for live status updates

Blockchain Integration

• Solidity 0.8.20 with Foundry framework for smart contract development
• OpenZeppelin contracts for security primitives
• bitcoinjs-lib for native Bitcoin transaction construction
• ln-service for Lightning Network integration via LND

Architectural Innovations

1. Dual Bitcoin Integration

We implemented two parallel approaches for Bitcoin integration:

Lightning Network Path:

• Uses HODL invoices as native HTLCs
• Leverages ln-service to communicate with LND nodes
• Enables sub-second settlements
• Perfect for smaller, time-sensitive swaps

Native Bitcoin Path:

• Custom P2SH HTLC scripts using bitcoinjs-lib
• Direct on-chain settlements for larger amounts
• Fallback option when Lightning liquidity is insufficient

2. Intent-Based Architecture

To extend 1inch Fusion+, we built an intent system where:

• Users express desired outcomes, not execution steps
• Professional resolvers (will) compete to fulfill swaps
• Smart contracts enforce atomic execution
• State machine tracks 12 distinct swap states for reliability

3. Smart Contract Design

contract EVMHtlcEscrow {
    // Core HTLC functionality with SHA256 hash locks
    // 0.3% protocol fee for sustainability
    // Emergency withdrawal mechanisms
    // Multi-asset support (ETH, ERC20)
}

4. Unified Cross-Chain Abstraction

export enum ChainType {
  EVM = "evm",
  BITCOIN = "bitcoin",
  LIGHTNING = "lightning"
}

This abstraction allows seamless addition of new chains while maintaining consistent swap logic.

Partner Technology Integration

1inch Integration

• Fusion+ Architecture: We studied and adapted their intent-based design
• Spot Price API: Real-time pricing for accurate quotes
• Resolver Pattern: Professional market makers can plug into our system

Lightning Network

• LND Integration: Direct node communication for invoice management
• HODL Invoices: Revolutionary use as cross-chain HTLCs
• Payment Hash Coordination: SHA256 hashes link Lightning to EVM

Bitcoin Infrastructure

• Blockstream API: UTXO management and transaction broadcasting
• Custom HTLC Scripts: Native Bitcoin script engineering
• Fee Estimation: Dynamic fee calculation for timely confirmations

Notable Hacks & Innovations

1. Lightning-as-HTLC

The biggest hack: treating Lightning HODL invoices as first-class HTLCs. By using the payment hash as the cross-chain secret, we achieve instant Bitcoin settlements without any protocol modifications.

2. Unified State Machine

We built a comprehensive state machine that tracks swaps across blockchains:

CREATED → WAITING_FOR_DEPOSIT → DEPOSIT_DETECTED →
HTLC_CREATED → HTLC_CLAIMED → COMPLETED

3. Core Infrastructure for Development

Created services for Lightning nodes and Bitcoin operations, allowing rapid development without real infrastructure.

4. Opinionated UI/UX

Extensive Tailwind customization with:

• Matrix rain animations
• Holographic effects
• Terminal-style components
• ASCII art integration
• All contributing to an immersive cross-chain experience

Security Considerations

• Cryptographic Security: SHA256 hash locks ensure atomic execution
• Timeout Protection: Both sides have timeout mechanisms to reclaim funds
• No Custody Risk: Users maintain control until atomic swap completes
• Auditable Events: Comprehensive event logging for transparency

Scalability Features

• Modular Architecture: Easy to add new chains or assets
• Resolver Competition: Market-driven efficiency
• Real-time Updates: WebSocket connections for responsive UX
• Gas Optimization: Batched operations where possible

This project represents a fusion of Bitcoin's security, Lightning's speed, and Ethereum's programmability—demonstrating that trustless cross-chain swaps are not just possible, but can be elegant and user-friendly.