Why is the Aion protocol needed?
The Bitcoin protocol’s unique orchestration of cryptography and a decentralized network was such a bright idea, thousands of developers and entrepreneurs copied it. Many were inspired to tinker and the protocol sparked a worldwide boom.
The tinkering led to an ecosystem of blockchains and distributed ledgers that have varied consensus mechanisms, digital signatures, mining incentives, node requirements, and programmability. Interactions and relationships between these blockchains are limited mostly to off-chain transactions or coin exchanges. Coin exchanges are some of the early commercial success stories built on top of bitcoin and now move billions of dollars worth of money, coins and tokens a day.
Exchanges themselves, while perfectly suited for their role, should not be relied upon as the most important means for blockchain to blockchain interactions. With the number of blockchains and distributed ledgers that now exist, there is an opportunity to coordinate a richer data flow through the entire ecosystem.
Aion is a protocol designed to create this dynamic interoperability between blockchains.
Why is interoperability so important?
Nearly every valuable company in history was built from strong network effects. This was true from the railroad through the invention of radio, telephones, and the Internet. When Facebook had its IPO, those who questioned its high valuation despite a lack of revenue and free services were answered with a lesson on Metcalfe’s Law and the value of networks measured through a function of its participants. These network metrics are now more important than ever as blockchain protocols become monetized and have caused a global token frenzy.
Because blockchains have formed in isolation from each other, a mechanism to connect different blockchain networks can unlock enormous value for every participant network. The Multi-Tier Blockchain Network (MTBN) envisioned through the Aion protocol aims to coordinate and connect these networks to unlock this value.
The Aion protocol can grow its network in a number of ways. An array of participants can build bridges and deliver services within a network of blockchains. For this reason, a priority in the creation of the MTBN has been to allow for a maximum number of participants. Participation can be between connecting and participant blockchains, distributed ledgers, databases, or connected IoT oracles.
How is this achieved?
Network participants at a minimum need to be decentralized, distinguish an inter-chain transaction from a regular on-chain transaction, and allow for an escrow-type time-lock feature for final transfer of value.
While the foundation of the MTBN is built from participating bridges, validators, participating networks, connecting networks, oracles and other IoT devices, more is needed to achieve its wider goals of coordination between so many participants. With such a wide view of participants, several other design choices offer reasons why thousands of people and businesses may wish to build on this protocol. In particular, Aion’s coordination of bridges, inter-chain transactions, consensus along with a tokenized incentive and governance structure form a strong backbone for this build-out.
