Catalyst is a cross-chain automated market maker that allows users to swap tokens between different blockchains. It is designed to be lightweight and extensible, so it can be implemented on any chain. Catalyst uses a concept called "unit of liquidity" to represent the value of an asset on a particular chain. This allows users to easily swap tokens between chains, even if they have different virtual machines or consensus mechanisms.

How does Catalyst work?

Catalyst works by having a pool of liquidity on each chain. When a user wants to swap tokens, they send their tokens to the pool on the chain they are currently on. The pool then sends the equivalent value of tokens to the pool on the chain the user wants to swap to. This process is all done through a messaging layer, so there is no need to bridge tokens between chains. It’s also fast and efficient, with swaps typically taking less than 18 seconds to complete.

Each pool has its own invariant to calculate the movement along the price curve and  communicate that movement to another pool on a destination chain.

The change in that movement is communicated as message, what they call a Unit of Liquidity. When a transaction is sent to Catalyst, it waits for the communication protocol to share the information to both chains and then upon receipt from those chains, they can then calculate how many assets are needed, would draw from that pool or add to that pool and give it to the end user.

Here is a summary of how Catalyst's components work together to facilitate cross-chain swaps:

1. A user deposits assets into Catalyst in the origin chain.
2. Catalyst calculates the units of liquidity from the deposit.
3. A message containing the units of liquidity is sent from origin chain to destination chain, leveraging an interoperability protocol and its relayer ecosystem like IBC.
4. Catalyst on the destination chain receives the cross-chain message and calculates how many assets to withdraw from the vault and send to the user.
5. The user receives assets on their designated wallet.
6. Liquidity providers who contributed to the pool used in the transaction earn fees.

What is the current status of Catalyst?

Catalyst is still in development, and should be released soon. The team has already completed the development of the core protocol and is currently working on the development of the user interface. Catalyst is expected to launch in Q3 2023.