5 Reasons Why Cross-chain Composability Is Important for Blockchain Adoption
Even though the concept has been around for a decade or so, and visible strides are being made in the technology’s development, blockchain mainstream adoption is still going slower than expected or desired.
The DeFi space is exploding — what with new dApps hitting the market every day — followed by new blockchains arising and coins diversifying user experience further.
However, the main stumbling block for mass adoption is that user activity is still very much constricted by individual blockchains’ limitations — you can only do what the chain allows you to do.
This is why cross-chain composability is crucial for blockchain adoption.
But what is it?
Composability is a principle that allows various components of a system to be combined to meet the intended use case requirements. Think of it in terms of Lego bricks that can be combined in an infinite number of ways to build anything you want.
One example of this concept is pNetwork’s pTokens-powered bridges interconnecting blockchains and enabling unobstructed digital asset transfer from one chain to the next.
Cross-chain composability is an instrument of unlocking the enormous potential of DeFi by tearing down the walls between blockchains. It offers an abundance of opportunities to leverage numerous DeFi protocols in unison, thus opening up a frictionless innovation cycle very much different from what we can experience in traditional finance.
But how does it stimulate blockchain mass adoption?
There are at least five ways cross-chain composability can spur on blockchain’s acceptance:
Multi-token usage across different blockchains
With the development of multi-currency crypto wallets, users can hold and manage tokens native to multiple blockchains from one place.
However, without the composability issue resolved, crypto users are still forced to switch between the chains whenever they want to access different protocols.
pTokens-powered bridges, for example, enable the adoption of blockchain by allowing users who hold Bitcoin to stay within the pNetwork ecosystem and interact with the dApps built on Ethereum, EOS, BSC, etc in a decentralized fashion.
A clear example can be minting pBTC on ETH — a synthetic 1:1 peg of BTC — within the pTokens dApp. Users are not losing any value by performing this action, just gaining more functionality options.
No need for third-party involvement
DeFi stands for decentralized finance where no one individual entity has access to and control over shared information.
When moving liquidity from one blockchain to another in the DeFi space, users and transactions still need to be verified. This is a big part of blockchain technology adoption implications and challenges as every verification accumulates fees for the user. This in turn diminishes their earnings in the liquidity pools that they are accessing on different platforms.
With chains being able to communicate directly, their users can transact freely between them, thus removing the need for third-party intermediaries and cutting transactional costs.
Added data security assurance
A consequence of fast and frictionless interactions between different blockchains is also the free flow of information across the blockchain plane. Not only does it eliminate the need for third-party verification at every turn, but it also protects the integrity of the shared data.
Interoperability and composability of multiple blockchains add assurance of data security by providing access to the shared information only to those parties with decryption keys. Thus, these concepts are directly enabling blockchain mainstream adoption.
Smart contract execution as if living on one blockchain
With the free flow of information established between blockchains and the middleman eliminated, smart contracts can be executed quicker, smoother, and safer.
pNetwork Portals, for instance, once active, will enable smart contracts living on different blockchains to interact with each other as if they were hosted on the same network.
This goes in line with smart contracts being foreseen to lose complexity as the blockchain space develops further and integrates its components better.
It will enable the implementation of numerous use cases across this space — DeFi dApps, NFT transfer, combining opportunities across lending platforms, etc. — and ultimately boost blockchain adoption.
Easier dApp development and launch
Breaking down the boundaries between blockchains and their subsequent integration demands that projects and their development teams learn about different infrastructures.
Therefore, instead of having a basic knowledge of the platform components, developers and users will have the opportunity to learn more about the space itself.
Moreover, learning about possible ways blockchains complement one another and work in unison will facilitate the introduction of dApps in general, increase the value of the blockchains they are connecting, and ultimately start a new blockchain adoption wave.
As a DeFi project with cross-chain composability at its core, pNetwork aims to resolve the ever-present composability issue plaguing the blockchain space.
We are working hard to bring global communities together by enabling DeFi to achieve its full potential.
Are you ready?
🔗 For any blockchain project looking to integrate pTokens into their infrastructure, we have also built a pTokens JS library.
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