How We Achieve Cross-chain Capability

Caér Finance achieves secure and verifiable cross-chain lending by leveraging Chainlink’s Cross-Chain Interoperability Protocol (CCIP) to facilitate communication and token transfer between blockchain networks. The protocol enables users to deposit collateral on one chain and borrow stablecoins on another without relying on centralized bridges or wrapped assets by utilizing a secure burn-and-mint mechanism.

In our current architecture, as illustrated :

• On the Source Chain (Avalanche Fuji), users deposit collateral (e.g., MockWAVAX) into the Caér Liquidity Pool. The deposited tokens are handled by BasicTokenSender.sol, which interacts with the Chainlink CCIP Router. This Router prepares a cross-chain message, processes transaction fees (in LINK or AVAX), and initiates a burn operation of the deposited tokens removing them from circulation and preventing supply duplication.

• The burn-and-mint method, native to Chainlink CCIP’s token pool mechanism, ensures that tokens exist on only one chain at any time. The burn event is cryptographically verified and transmitted by Chainlink’s decentralized oracle network (DON), forming a secure proof of collateral transfer.

• Once received on the Destination Chain (Arbitrum Sepolia), the corresponding CCIP Router invokes the LendingPool.sol contract. This contract verifies the message and proof, and accordingly credits the user with the right to borrow stablecoins (e.g., MockUSDC), which are minted or released from liquidity on the destination chain.

• Both MockWAvax and MockUSDC are continuously priced using Chainlink Data Streams, a low-latency oracle feed that ensures accurate and high-frequency pricing. These feeds are crucial for determining borrowing capacity, monitoring risk exposure, and enabling dynamic collateral swap logic within the protocol.

By combining CCIP and Data Streams, Caér Finance unlocks native cross-chain borrowing with high levels of security, precision, and capital efficiency without relying on wrapped tokens or centralized liquidity hubs. This positions Caér as a modular, interoperable DeFi primitive ready to scale across blockchain ecosystems.