Poly Network
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Poly Network

Jinse Finance | Dialogue with the tech lead: Poly Network is deploying cross-chain transfer bridge for NFTs.

While COSMOS and Polkadot have not yet made cross-chain asset transfer, Poly Network has already successfully launched its main network and started to transfer assets between heterogeneous blockchains.

According to the official release, Poly Network has implemented interoperability with 9 heterogeneous chains including Bitcoin, Ethereum, Neo, Ontology, BSC, Heco, Elrond, Zilliqa and COSMOS-SDK. Since the launch, the protocol has enabled cross-chain asset transfer of more than 3.7 billion U.S. dollars involving almost 29,000 addresses on different blockchains. (date updated to 11,4,2021)

How extremely impressive these numbers are!

There are a large number of existing public chains, while most of them are isolated in transaction processing and data storage, which means all Layer1s are not connected yet, asset exchange cannot be done directly, and combinability in the DeFi projects is not possible.

As a result, users usually have to transfer or swap assets through the centralized exchanges.

The launch of Poly Network fills some requirements for cross-chain asset transfer by providing a secure and decentralized network with easy-to-use interface. It is a simple and efficient tool for cross-chain asset management.

After communicating with the core team, we learned that the transaction verification of Poly Network is much more concise. Comparing to Polkadot and COSMOS, which need other chains to support the protocols or deploy a node/ SDK, Poly Network just needs to run smart contracts on the original chain.

After the smart contract outputs cross-chain data, that data will be verified according to the Poly Network relayer protocol, which mainly verifies the validity of that data. Then through the consensus rule of the relayer, it will output data to add assets on another chain.

This kind of verification is more like a “bridge” verification. In addition, if we exclude the part of Poly Network that can verify security, its architecture is very much like a multi-chain wallet. In a normal multi-chain wallet, the assets of two chains cannot be transferred to each other. However, Poly Network can achieve such the exchange, as itself has a confirmed ledger for security.

Such a design is impressive enough to attract the attention of “Jinse Finance”, in order to understand Poly Network more clearly, curator Wang Hang from “ Jinse Finance” had a conversation with Poly Network’s tech lead Tan Yuan, where Tan analyzed Poly Network’s cross-chain scenarios and application possibilities.

For the establishment of Poly Network project, the team has been adhering to supplement the market needs and do not care about the momentary gains and losses. Poly Network also developed an enterprise-oriented version named Poly Enterprise, which has been applied on the Blockchain Service Network (BSN).

In this article you will get the following key information:

1. Poly Network is a cross-chain aggregator for Layer1 (comparing to Polygon’s layer2 aggregation).

2. Poly Network controls cross-chains by deploying smart contracts on the original chain for easier operation.

3. Poly Network supports cross-chain transfer of assets to BSC chain and Heco chain.

4. The next version of Poly Network may realize cross-chain smart contract interoperability.

5. Poly Network is deploying cross-chain transfer bridge for NFTs.

The following is the transcript of the conversation between Wang Hang and Tan Yuan, which was recorded by Jinse Finance to represent the wonderful parts of that conversation for readers.

Tan Yuan, the tech lead of Poly Network

The development background of blockchain architecture

Wang:

The first question is about blockchain architecture. Currently, all public chains have made attempts of multi-chain architecture in order to expand capacity and scalability. How do you think about the trend of blockchain architecture?

Tan:

I think the core point is still Ethereum. Ethereum has many demands, but its own TPS is relatively low and there is no way to support the development of DApps. Besides, a single blockchain also cannot support the development of the entire cryptocurrency system, and other high-performing chains are needed to complement it, so it is a trend for all chains to choose to expand their capacity.

Current expansion is actually divided into two main categories: Layer1 and Layer2.

First of all, Ethereum scalability is currently mainly developed towards Layer2, and there are three ideas:

1. Layer2 of ZK-Rollup

2. Layer2 of Optimistic Rollup

3. Sidechain mechanism

These three are well developed, but none is perfect. They all include limitations, for ZK-Rollup and Optimistic Rollup can’t run smart contracts well, and there are still some security issues with sidechain mechanism.

Vitalik also announced that an important version of Ethereum will be released soon, which might have a Layer2 to support OVM (Optimistic Virtual Machine). Only if the main Layer2s are better developed, the pressure on Ethereum will be eased.

Wang:

I think another bottleneck is that there is actually no way to interact between Layer2s, which is a big problem.

Tan:

This is also a big drawback. However, Polygon, which is also known as Matic, is already trying to solve it. Polygon works like a Layer2 aggregator, which is exploring for interoperability.

If Ethereum can connect bridges between Layer2’s VMs, its future would have more possibilities.

When talking about Layer1 solutions to scalability, Cosmos is a rather unique example. Ethereum and Polkadot are more similar, whose securities both depend on the main chain and then sharding for scalability.

Polkadot makes a more important point — sharing security, a relayer chain to ensure the security of all other sidechains(shardings). The prospect of Polkadot might be bigger than Ethereum.

Wang:

Yes, Polkadot has heterogeneous sharding. Ethereum has homogeneous sharding, and Ethereum will also have data sharding.

Tan:

Although Polkadot is a heterogeneous chain, it actually has a Substrate in its architecture, which makes it similar to the homogeneous form like Ethereum, providing a good underlying blockchain architecture for developers.

On the long term, I prefer developing applications in the Polkadot ecosystem. It will be a quite long process if you spend effort to build the blockchain and then make the economic model. Even if you spend two or three years to build up the infrastructure, the process of application development on it will also be very slow.

The development of Polkadot and COSMOS is not as fast as expected. Because they are not only going to build cross-chain system, but also to develop ecosystem. Ethereum has spent 4 years for development til today.

Wang:

Got it. Ethernet 2.0 is promoted to expand the capacity, but the main problem it faced is how to merge 1.0 and 2.0. The core may be the decentralization.

Tan:

PoW itself is ensuring enough decentralized features, while the benefit of PoS is that the coin price does not affect security. In the long run, although PoW has many weaknesses, such as high resource consumption and low performance, it is indeed more secure than PoS mechanism.

Poly Network is a cross-chain aggregator for Layer1

Wang:

If chains stay compact instead of expanding capacity, the dilemma of developing the interoperability between each other is exactly what Poly Network can help them to break through.

Tan:

What Poly Network does is different from Polkadot, because our core is still cross-chain transaction.

Poly Network is the aggregator of Layer1s, we are not trying to build a large ecosystem like Polkadot. The normal operations for asset transfer should be done by a decentralized bridge, but right now a lot of assets are transferred through the centralized exchanges. If you want to participate in DeFi, you typically go to an exchange, buy coins and withdraw them.

What Poly Network wants to do is to provide a decentralized solution for users that they can transfer directly from Ethereum to BSC or Heco. The significance of doing so is that if centralized exchanges are down, or if they do not provide asset liquidity services, users can still transfer assets through Poly Network, such as DeFi or transfer.

Wang:

Got it. The exchanges may be down or very slow due to a full sequence of tasks scheduled. However, this slow process cannot be seen for the users, so their experience will be particularly poor.

Using decentralized way to transfer assets, users can check whether the transaction has been pending or not. I know the process so that I can continue to wait.

Tan:

Exactly, we make a website where you can check the whole process, what you did on the original chain, what happened on relayer, what happened on the target chain, and there is no time needed for transaction censorship either. Withdrawing assets from exchange is also a slow process, and Poly Network will have a bigger advantage in terms of time.

Wang:

As you mentioned before, Poly Network is actually a Layer1 aggregator, which is very much like a multi-chain wallet, or upgrading a multi-chain wallet into a chain, right?

Tan:

Multi-chain wallets just provide an individual wallet for each chain, but wallets themselves are not interoperable with each other, for example, you cannot transfer Ethereum to other chains.

And the concept of multi-chain wallets is primitive, as cross-chain is not the same, and the logic of cross-chain lies in the interaction of information.

However, Poly Network actually has not quite the same logic as some of the current cross-chain models (like hash locking), whose models are based on multiple signatures.

Our key point is information interaction, and what is the benefit of information interaction? We could use simple methods to deal with complicated logic.

For example, when we want to do transfers between chains, or write some multi-chain control logic inside a smart contract, Poly Network can simplify this process. Such as exchanging USDT for BUSD, which normally needs several steps, we can actually achieve a direct exchange between USDT and BUSD, which cannot be done by multi-chain wallets.

Cross-chain technology details of Poly Network

Wang:

Does Poly Network need to deploy nodes on all chains?

Tan:

Nope, Poly Network can be implemented through smart contracts. For example, if this chain can run smart contracts, then two smart contracts need to be written and deployed on this chain, one for management and the other for interoperability. In addition, we can also integrate COSMOS-SDK and other cross-chain modules.

Wang:

Does it mean that Poly Network could query the data of transactions and balances on the original chain?

Tan:

Poly Network does not monitor the status of each chain, but check cross-chain information for security, which will ensure the integrity of cross-chain information and the uniformity of interfaces.

After users make operations on the original chain, Poly Network will monitor the cross-chain information, which will be pushed to the relayer of Poly Network. The relayer will check the validity of that information to verify whether the operations really happened on the original chain or not, which will involve cryptographic verification.

After the verification is passed, the relayer will push the result to the target chain, meanwhile the relayer will have a corresponding invocation of contract. We also build an integration inside the cross-chain management contract for reading parameters. This is the main logic of how Poly Network runs.

Wang:

That is equal to upgrading a gateway-based process to smart-contract-based process to do cross-chain transactions, which works with a more complex ledger logic.

Tan:

You can explain it in that way. To sum up, it’s the uniformity of lots of standards and verifications of cross-chain information.

The more chains linked, the more complex the model will be. What we build are heterogeneous chain architectures, which need more adaptations. We need to have a unified protocol to adapt to different heterogeneous chain architectures.

Heterogeneous chains may have some differences in working algorithms, as well as inconsistencies in block structure, signature encryption and information flow, which require a lot of protocols to regulate and a common set of protocols to be designed.

Wang:

Solve the data availability problem first, then the transaction consistency problem.

Tan:

Yes, the underlying principles involves a lot: How to ensure transaction consistency? How to ensure cross-chain security? How to ensure data availability? How to unify data format? We need a lot of logic to design Poly Network architecture.

Poly Network already supports cross-chain assets transfer to BSC chain and Heco chain

Wang:

Got it. If I use product of Poly Network, like Poly Bridge, how can I analyze the stability of this network?

Tan:

Poly Network is now a semi-centralized solution, as it is not yet running a complete governance and economic model. Poly Network currently has 4 nodes.

The consensus algorithm uses VBFT, and the overall architecture system is similar to that of public chains, but without the incentive model. Instead, those well-known public chains stay as our credit endorsement.

Wang:

From this perspective, Poly Network’s stability and security are guaranteed, and there will be no unexplained downtime or single point of vulnerability.

Tan:

Normally, an unexplained downtime is caused by the central server. Poly Network is actually decentralized. Our partner from different projects will run a node of their own for synchronization.

Wang:

Got it. It might be slow, but not down.

Tan:

Yes, there is no single one failure happened since our mainnet online from last August. However, some nodes will need to synchronize with some target chains, for example, they may need to get some data from BSC or Heco, which will cause Poly Network executes process a little bit slowly.

Wang:

I’ve checked your product like Poly Bridge, which is now supporting assets exchange from BSC and Heco.

Tan:

Yes, Poly Network has been incorporated as the cross-chain partnership in the both of BSC and Heco ecosystem.

Wang:

That is, Poly Network is actually encapsulated into a service which will be invoked to server by other chains , as the Poly Enterprise mentioned above.

Tan:

Yes, Poly Enterprise works for enterprises, but Poly Network provides service for much more customers, including public chains.

Wang:

And will Poly Network evolve into a stream payment which will be called by other chains with gas or token as fee?

Tan:

We are still exploring about that. The roadmap is divided into two steps, first step is to link more chains and introduce some authenticate consensus nodes to do endorsement.

But our purpose is not to make profit, we hope to develop a product that has not been existing yet on the market, and our vision is to facilitate seamless connectivity for the blockchain world. We hope our system grow bigger, but there is no particularly clear conclusion about the form it will eventually evolve into.

The second step is to promote the process of decentralized asset swap, so that assets can be directly transferred between chains without the centralized exchanges and gateways. For example, BSC’s assets and Heco’s assets can be transferred directly through Poly Network nodes. In addition, we are preparing to link with some public chains and some partners that we have not yet revealed.

Innovation possibility of Poly Network

Wang:

And is Poly Network Turing-complete? For example, running smart contracts on Poly chain, adding virtual machine module, etc.

Tan:

Yes, we are actually thinking about that, because virtual machines on the chain would improve the current condition. It is possible to call more services on Poly Network in the process of cross-chain to realize the unified exchange of assets from different chains. However, we are still focusing on doing the cross-chain asset transfer well and providing services to more projects that need us. Other features will probably be released in the coming versions of Poly Network.

Wang:

After all this talk, if you were to find a counterpart for Poly Network, which one do you think it would be?

Tan:

What we actually do is a Layer1 aggregator, structurally very similar to another Layer2 product called Polygon, even namely.

Wang:

Got it. Which type of assets could be transferred through Poly Network? For example, ERC20 and ERC721.

Tan:

There are no problems with ERC20 and ERC721 now. We have also explored into the NFT area and are currently working on an NFT cross-chain transfer bridge.

Wang:

I’d like to extend the discussion a little bit more.

Layer2 requires a new network, so it will be less combinatorial. If many DeFi contracts are deployed in Layer2, customers use Poly Network for asset transit, and DeFi also connects to exchanges and its chains through Poly Network, then it is possible to form a structure as large as the scale of Ethereum Layer1. Because the assets transferred from Ethereum layer1 may not have much chance to go back.

Tan:

For now, the above situation seems possible, because many DeFi projects have plans of Layer2.

But the reason why we still focus on layer1 is that Layer2 has not had well-developed smart contracts and virtual machines yet. Later we may integrate Layer2 solutions into Poly Network to make a cross-chain based on both Layer1 and Layer2.

Layer2 will be the main battlefield for applications, in another word, an application may build its infrastructure on Layer1 and services for customers on Layer2.

As mentioned above that some assets are escaping from Ethereum Layer1, but the main bodies of those assets are still locked in Ethereum Layer1. When the security of one asset still depends on the Ethernet Layer1, Layer2 itself will not practically improve security, which will always have positive effects on Ethereum’s development.

Wang:

Yes, it’s an opportunity in the short term, and also good for Ethereum in the long term.

Tan:

There are more possibilities, or the value of an asset on the chains will have a greater amount.

Wang:

One last question, which new public chains would your team be more bullish on?

Tan:

Solana and Flow, whose performances in terms of speed and storage are very impressive. Flow focuses on NFT, which will be a relatively large market.

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Representing both a technical breakthrough and a milestone for blockchain adoption, Poly Network is well positioned to become the pillar of NGI and the smart economy of tomorrow.

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