Builder Spotlight: Eric Forgy Unveils CavalRe’s Plan to Architect the Future of Capital Markets

In blockchain, people often speak about transactions: failed, succeeded, how many per second, time to finality, and so on. In its most basic, ancient form, a transaction is a two-way exchange – coins for meat, one token for another. With blockchains, we’ve seen innovation in how people transact. 

Eric Forgy’s Multiswap is one of the projects pioneering new, more complex possibilities that expand how people can transact and showing that it is possible to swap hundreds of tokens in a single transaction.

The record is 340 tokens in a single transaction on Multiswap’s testnet. Eric expects that number to grow.

“There’s no equivalent to what we’re building in TradFi,” said Eric. “We’re leapfrogging them.” 

Eric would know. After getting his physics Ph.D. and working on ballistic missile defense at MIT’s Lincoln Laboratory, Eric pivoted to Wall Street. He did quantitative and risk research on “pretty much every asset class you can think of” for big-name firms before taking his financial talents to Hong Kong. Fast-forward many years and one Great Financial Crisis, and Eric became a founder. His current project, CavalRe, aims to rebuild global capital markets on-chain.  

“My vision for my whole career has been to fix capital markets,” Eric said. “I don’t know of any other chain that makes sense to do this except Avalanche.” 

Multiswap is the first step – a foundation for CavalRe’s future projects, an engine to power the digital markets Eric envisions. 

The 340-item swap finalized in two seconds. This speed and multiplicity opens doors. Eric likes to give one example: “If you’re a large traditional asset manager managing an equity portfolio, that means you can rebalance your entire portfolio in a single transaction.” 

He dreams of far more. He believes that built atop a foundation of truly novel primitives like Multiswap, his former world of traditional finance can vastly improve. 

“There’s no reason to have the New York Stock Exchange anymore,” he said, as an example. “NYSE is going to be on-chain for sure in the next 5 to 10 years. I’m excited to be building that, to be building the rails of what future capital markets will look like.”

Though Eric has long-term dreams, Multiswap should bring new possibilities to institutions, retail traders, and LPs this year.

Why? With Multiswap, Eric has tweaked the AMM model. 

Multiswap’s secret sauce has many ingredients. One is that pools are based on value, meaning they can have any number of tokens. This allows LPs, whom Eric says don’t face single-sided impermanent loss, to effectively use “LPing to function as an ETF,” one tracking the pool’s tokens. 

Another ingredient is that Multiswap doesn’t fragment liquidity across pools. As a result, Eric says, “the entire liquidity of any token is available for any other swap.” Greater liquidity translates to greater capital efficiency for traders. 

The key ingredient, however, is that trades are self-financing, meaning no value is created or destroyed in a transaction. Eric imported this idea from his TradFi days. “This is actually a natural assumption, but it doesn’t exist in DeFi today,” Eric said. 

For a more complete picture of Eric’s philosophy and design decisions, see Multiswap’s docs or use the exchange when it launches on Avalanche this year.  

Further down the road, Eric plans to build a custom VM and Subnet. He believes that Avalanche is the only chain with the technical prowess to support his grand vision. 

“I was originally attracted to Avalanche by the tech,” he said. “As an engineer and physicist, I believe that Avalanche is the best tech out there by far.”

Since starting Multiswap, Eric has enjoyed collaborating with the Ava Labs team, receiving support as he builds the future on Avalanche – one of a better system built on new kinds of transactions. 

“We’re building for trillions in TVL,” he said. “We’re building the rails for the evolution of capital markets. We’re rebuilding financial services, and we’re doing it here on Avalanche.”

This post is based on materials provided by CavalRe. For more information, visit CavalRe’s website.