Shackles And Blockchain Interoperability
WHAT IS INTEROPERABILITY
Forces of the decentralized web have built too many chains, distributed ledgers, and Directed Acyclic Graph (DAG), too many that they’re becoming shackles trapping us and slowing down the speed of mainstream adoption. From Ethereum to other Layer 1s(L1), Polygon to other Layer 2s (L2), over 6000 blockchains exist (according to statista.com in 2021), having different pros and cons and more importantly, scalability issues.
In computer science, interoperability is the ability of computers to exchange and use one another’s resources and information seamlessly. Interoperability exists everywhere. An example of computer interoperability is seen in the use of operating systems where different companies can build computers with different specifications and install the same operating system to run whatever applications unlike in the past when applications were built based on the architecture and specification of computers.
In this article, I will be going over the following…..
- What Blockchain Interoperability is.
- Usecases for Blockchain Interoperability.
- Important Features Of Blockchain Interoperability.
- Effects of Blockchain Interoperability.
- Blockchain Interoperability Solutions.
- Overview Of Blockchain Interoperability Projects.
Blockchain Interoperability is the ability of different blockchains to share information and resources irrespective of the underlying technologies using various solutions such as agnostic protocols, the blockchain of blockchains among others. Popular interoperability projects include Cosmos, Polkadot, Quant(distributed ledgers), Blocknet, Icon, Metronome, Kardiachain e.t.c.
The blockchain trilemma problem as put forward by Ethereum co-founder Vitalik Buterin proves uphill and with different projects choosing their side of the triangle and although better technology is emerging, there is definitely going to be a need for blockchains and both decentralized and centralized solutions to communicate and share information, resources, and value. As it stands, no blockchain is scalable enough to serve the world’s population, however, what if everyone goes around with their business of choosing their preferred chain while interoperability solutions connect us all.
USE-CASES OF BLOCKCHAIN INTEROPERABILITY
- Asset exchange
- Information and resource exchange e.t.c
EFFECTS OF BLOCKCHAIN INTEROPERABILITY
- Heightened decentralization
- Easier exchange of value
- Creation of advanced digital economy
- Increased transparency e.t.c
INTEROPERABILITY SOLUTIONS
The approach to interoperability has been taken differently by various projects. While some are focused on building blockchains that connect blockchains, some are about value transfer between chains. Some approaches are++++ listed below
- Blockchain of blockchains ( blockchain to a host of other blockchains e.g Cosmos)
- Blockchain agnostic protocols (cross-chain data oracles e.g Band protocol)
- Atomic swaps (Contracts to exchange tokens between two different blockchains e.g Liquality)
- Cross-chain bridges (Value transfer between protocols e.g pNetwork) e.t.c….
OVERVIEW OF POPULAR INTEROPERABILITY PROJECTS
Tons of projects are in a race to build an interoperability solution, here’s a link to a few of them and since I can’t review all of them, I will be reviewing one blockchain of blockchains project(Cosmos) and a cross-chain bridge (pNetwork)
Cosmos is a decentralized network of independent parallel blockchains, each powered by Byzantine Fault Tolerant (BFT) consensus algorithms.
On Cosmos, the blockchains communicate using the Inter-Blockchain Communication protocol(IBC) which facilitates asset and data exchange across parties involved(blockchains).
Cosmos (IBC ) hubs are the heart of Interoperability on Cosmos and are built using the Cosmos Standard Developers Kit(SDK) which is an open-source framework providing developers with tools to build blockchains from scratch.
Gravity dex(decentralized exchange) and AMM(Automated Market Maker) is a cross-chain exchange protocol built by Cosmos that enables trading tokens on the blockchains on cosmos (e.g Trading Crypto.com chain tokens for Terra tokens).
The Cosmos ecosystem has a governance token with the ticker $ATOM which is used for staking, governance token for the cosmos hub, spam-prevention mechanism on the hubs.
THE pNETWORK
The pNetwork is a cross-chain bridging Decentralized Autonomous Organization (DAO) built to suit the bridging of NFTs, Fungible assets, and DAOs across several blockchains and protocols which include Ethereum, Doge, EOS, Polygon, and the others as shown in the image above.
The pNetwork has a governance token with the ticker $PNT which according to the team, “PNT token represents a key element of the system as it aligns incentives for all participants”.
Interoperability is definitely one of the main technologies needed to foster decentralization, as time goes, new approaches will roll out and partnerships would be struck like the Blockchain Interoperability Alliance which is an alliance of Wanchain, Aion, and Icon with the goal of creating a globally accepted standard for connecting blockchains.
Disclaimer: This is educational content for Fundamental Analysis purposes and NOTHING in this publication should be considered Financial Advise.
