Challenges

Challenges Faced by Caér Finance

Technological Complexity

Developing a next-generation cross-chain lending and borrowing protocol involves intricate technical demands. Caér must ensure seamless interoperability between its Application-Specific Sequencer (ASS), solver mechanism, and the Espresso finality layer to enable fast, secure, and verifiable cross-chain operations. This includes ensuring secure smart contract execution, reliable data validation from multiple chains, and high availability of services—all of which require ongoing engineering iteration, rigorous testing, and performance optimization.

Cross-Chain Liquidity Management

Managing liquidity across multiple blockchains presents inherent challenges in maintaining synchronization, consistency of interest rates, and timely execution of liquidations. Unlike single-chain platforms, Caér must coordinate lending, borrowing, and asset movement across independent chains in real-time. The ASS is critical to ensuring data correctness and enabling efficient and trustless liquidity flow between ecosystems while minimizing slippage and fragmentation.

Security & Smart Contract Risks

Operating in a decentralized and composable financial ecosystem means exposure to various security threats, such as contract exploits, oracle manipulation, and invalid cross-chain messages. Caér mitigates these risks through its trustless architecture: combining ASS-driven data validation with Espresso’s decentralized confirmation layer to uphold transaction integrity, reduce reliance on centralized bridges, and fortify its security posture.

Ecosystem Onboarding and Bootstrap Challenges

Deploying on emerging networks such as EduChain, built within the Arbitrum Orbit ecosystem, introduces challenges in user onboarding, liquidity bootstrapping, and establishing a foundational role within the ecosystem. As a core DeFi primitive, Caér must demonstrate real value early by driving activity, locking liquidity, and offering meaningful integrations with other dApps and protocols on EduChain.