IBC Protocol: A Review of the Major Developments of 2022
2022 has been nothing short of an eventful year for the Inter-Blockchain Communication (IBC) protocol.
From new chain integrations, to features and improvements, IBC has undeniably cemented its place this year as the gold standard for blockchain interoperability.
The Interchain continues to thrive. And the developments this year have reinforced our vision of building a global network of interconnected blockchains.
The purpose of this blog post is to look back at this year and summarize the major protocol developments and updates. The topics covered include:
- Major releases
- New features and protocol improvements
- On-chain and GitHub repo-related metrics
- Important ecosystem-wide developments
- Team update from Interchain GmbH
- Some of the major priorities for 2023
Releases🔧
There were 4 major releases to ibc-go this year, with each new release introducing a novel feature or improvements to the existing stack (summarized in the next section).
New features and improvements✨
Fee middleware
The implementation of the Interchain Standard (ICS) 29 known as fee middleware, introduced an on-chain mechanism to fund relayers. The purpose of this feature is to incentivize relayers so that IBC scales in a sustainable manner.
Fee middleware was included in the v4.0.0 release. You can read this blog post to learn more about the feature.
Interchain Accounts
In March of this year, Interchain Accounts (ICA) was released as part of the ibc-go v3.0.0 release. So far we’ve seen Stride and Quicksilver go live with the controller chain functionality i.e. chains that can open and control accounts on host chains.
In ibc.go v5.0.0, one of the main features added was the InterchainAccountgRPC query endpoint to the controller submodule, so that users can retrieve their registered ICA addresses.
Along with a host of other improvements, the v6.0.0 release added a MsgServerto the ICA controller submodule. These changes were made to improve the ease of implementation and adoption of ICA.
See here for a summary of the changes made to ICA in ibc-go v6.0.0. If you’re interested, you can refer to this blog post to learn more about how ICA works.
Client refactor
Light clients are a key component of IBC. One of the main hurdles to the adoption of IBC was the development of light clients to track different consensus algorithms.
The 02-client refactor was done to alleviate this concern and to make the development of light clients easier. We tagged 02-client-refactor-beta1 with the 02-client refactor work, which will eventually be released in ibc-go v7.0.0 next year. v7 will also bump the SDK version to v0.47.
On-chain metrics⛓️
Number of active chains: Figure 1 below shows the number of active chains interconnected over IBC. This number has consistently been increasing quarter-over-quarter. The interchain currently comprises of 53 active chains.
Total USD value of IBC transfers: in 2022, IBC accounted for a total volume of $30.3 billion of cross-chain transfers.
Figure 2 depicts the total USD value of incoming and outgoing IBC transfers. While the volume has been on a decline throughout most of this year, we can see that the value of transfers seems to be recovering from November onwards.
Interchain Accounts: after launching early this year, Interchain Accounts (ICA) is being used on mainnet by Stride and Quicksilver — two interchain liquid staking protocols.
Stride launched in September. And since then, a total of $14.5 million worth of assets have been managed by ICA on their chain. Figure 3 above shows a cumulative view of the total USD value of assets bonded on Stride per day, which are then delegated on host chains via ICA.
For a full analysis on the usage of ICA on Stride, you can refer to this report.
GitHub repo metrics💻
A robust community of external contributors and our phenomenal engineering team has delivered amazing software time and again.
The table below summarizes some of the important GitHub metrics for the ibc-go and ibc (spec) repos this year.
Figure 4 shows the total number of commits to ibc-go over time this year.
We’d be remiss if we didn’t give a massive shoutout to our external contributors for the amazing work they do, as well as for fostering collaboration and innovation across ibc-go development.💪✨🔥
Other ecosystem developments🚀
Bringing IBC to Polkadot [Composable Finance]
By developing the BEEFY light client and a novel cross-chain smart contracting platform called XCVM, Composable Finance — with the help of Strangelove Ventures — is building the infrastructure to interconnect the Cosmos and Polkadot ecosystems. Their go-to-market plan for next year will include leveraging the Wasm and GRANDPA clients.
The team at Composable is also working on bridging Substrate-based chains with the Near ecosystem using IBC.
ZK-IBC [Polymer]
Polymer is set to be one of the first consumer chains of Interchain Security. Using zero-knowledge proofs, Polymer aims to connect IBC-enabled chains with non-IBC chains.
IBC on a non-Cosmos SDK chain [Penumbra]
This year we saw the first non-Cosmos SDK chain — Penumbra — connecting to the Cosmos Hub via IBC on testnet. This is an important milestone which shows that implementing IBC is not limited to chains using the Cosmos SDK.
Bringing IBC to Ethereum and Near [Electron Labs]
With the use of zk-snarks, Electron Labs aims to use IBC to bridge together the Ethereum and Cosmos ecosystems (and eventually other EVM chains).
Transferring security over IBC [Babylon]
By leveraging IBC as a vehicle to transfer security, Babylon aims to provide Cosmos chains with the security of Bitcoin. Using a method of checkpointing, Babylon uses the IBC transport layer to aggregate and timestamp transactions from Cosmos chains onto Bitcoin.
Check out their blog to learn more about how Babylon works.
Interchain Queries
ICS-31 Cross-chain queries, developed by Informal Systems and Interchain GmbH, is a protocol that allows a ‘querying’ chain to request data from the ‘queried’ chain over IBC. Both Stride and Quicksilver are currently using the cross-chain queries module in production.
Interchain NFTs [Bianjie]
Developed by Bianjie, Interchain NFTs will allow users to send their NFTs between different chains over IBC. See this blog post to learn more.
The IBC team at Interchain GmbH🌐
As one of the three core teams funded by the Interchain Foundation (ICF) to develop IBC (along with Informal Systems and Strangelove Ventures), we at Interchain GmbH act as the stewards and maintainers of the IBC protocol spec and ibc-go repo.
Our vision is to enable a future where IBC acts as the connective tissue between all blockchains — creating a network of networks where blockchains can interact and exchange information securely.
Our team began the year with a headcount of 6 individuals. Today, we are a group of 9 members working in engineering and product verticals.
What’s in store for 2023? 🛣️
Our objectives for next year can broadly be categorized into three main themes: 1) upgradability, 2) application composability, and 3) ecosystem expansion
Upgradability: aims to enable the future-proofing of IBC and the ability to upgrade the core protocol without sacrificing network effects or accumulated state.
This will include work surrounding channel upgradability to leverage new features like fee middleware, upgrading IBC smart contracts, enhancing ICS-20, changing the order of a channel, etc. The theme of upgradability also involves work surrounding the upgradability of connections and clients.
Application composability: aims to extend the functionality of IBC and make it easier for developers to create custom IBC applications in Golang or CosmWasm.
Key deliverables within this theme include path unwinding (ICS-20 v2), PubSub queries, supporting new application workflows, and enhancing smart contract composability with IBC.
Ecosystem expansion: involves supporting teams implementing IBC for other ecosystems or light clients (ZK-IBC, NEAR, Substrate), the release of localhost connection, ensuring IBC security and compatibility with dependent projects.
Conclusion
Despite the bleak macroeconomic backdrop throughout 2022, the interchain continues to go from strength to strength, and IBC has been at the vanguard driving growth and innovation across the ecosystem.
Going into 2023, it’s clear that IBC will continue to play a crucial role in the evolution of blockchain interoperability. Whether it’s enabling new use cases and applications, or driving innovation across different networks, the future of the interchain has never looked brighter.
IBC is a fundamental paradigm shift in interoperability by allowing for arbitrary data transfer across blockchains in a trust-minimized, secure, and extensible manner. Refer to our Interchain Developer Academy material to learn more about IBC.
If you have any questions, you can reach out to us here on our Discord.
About the Author:
Adi Ravi Raj works at Interchain GmbH and is the Protocol Analyst for the IBC team.
Shoutout to Carlos Rodriguez, Charly Fei, Susannah Evans, and Thomas Dekeyser for the feedback and review.
