Setu

This project targets near-instant cross-chain token bridging with minimal fees and zero slippage. Liquidity providers (LPs) deposit tokens on any supported chain, where funds are locked for a fixed duration. Idle liquidity on each chain is deployed into DeFi protocols to generate high yield.

Liquidity is continuously monitored. When predefined trigger conditions indicate urgency, these conditions—stored in the operator’s ENS address—are evaluated. An AI agent confirms whether rebalancing is required and, if so, uses Li.Fi to determine the optimal route. LPs earn interest from both chains irrespective of the chain on which they deposited. Unnecessary bridge transactions are avoided because the system operates as a peer-to-peer marketplace for users. AI logic is intentionally kept simple.

Rebalancing Logic

• Fetch the last rebalance state (total assets on each chain, including interest) from Supabase, populated by a Tenderly relayer when an on-chain event occurs.
• Fetch the current total assets from the SetuVault contract.
• Retrieve the amount LPs can withdraw the next day based on their lock period from Supabase.
• Fetch trigger conditions from the operator’s ENS. Use these inputs to calculate the net rebalancing required.

Future Targets

• Introduce advanced yield strategies that are continuously monitored to predict the optimal time for rebalancing.
• Use historical setu data to train machine learning models that detect urgent or adverse scenarios early and help mitigate risk.
• Add different stability criteria managed via multiple operator ENS addresses.
• Expand Setu to support more chains.

Demonstration Notes

• Compound is currently used for yield generation.
• Rebalancing must be triggered manually after AI confirmation.
• ELISA OS integration with Tenderly and Supabase is still in development.
• Contracts are deployed on Base Sepolia and Sepolia, so Li.Fi integration does not work in this setup.

An attempt was made to combine ELISA OS (AI agent) with chat-based automation to continuously monitor Supabase data and on-chain contracts for autonomous rebalancing. This approach proved complex, time-consuming, and unstable during development.

Rebalancing logic reference: https://github.com/hardik-kansal/Setu/blob/main/REBALANCING_MATH.md

The complete technical stack used in Setu is documented here: https://github.com/hardik-kansal/Setu/blob/main/TECH_STACK.md