Interoperability, a key feature for the future of blockchains
Blockchains and the assets created on them are far from having reached their full potential. The asset and payments ecosystem continues to grow and will likely include multiple blockchains, digital tokens, cryptocurrencies, stablecoins, and central bank digital currencies (CBDCs). This ecosystem that was once limited and exclusive now includes governments, corporations, institutional investors and individuals who are all becoming dynamic parts of this evolving space.
With this new popularity, the ecosystem is in a critical phase of its development as the number of users of the decentralized technology exceeds the possibilities of the technology itself. The result is regularly congested networks and a demand for solutions.
The “maximalist” players seem convinced that interoperable standards for blockchains are unnecessary, given their view that the blockchain they have chosen will somehow be the only one that will endure, in the long run. Many refute this possibility and agree that the future of the cryptosphere will undoubtedly be multi-chain. No major technology solution has evolved into a single platform or vendor ecosystem. Additionally, geopolitical considerations alone and the development of CBDCs will likely lead to a combination of multiple platforms, vendors, and variations of the technology.
The benefits of interoperability
First, interoperability promotes the development of innovation: as individual ecosystems grow, they develop their own strengths, such as increased security, faster network speed, lower transaction, better privacy and unique communities. Gateways are important because they allow users to access these platforms, which in turn encourages developers to improve their products, develop new features and use cases, and integrate their protocol design with others. blockchains. Interoperability therefore improves productivity and capital efficiency for existing crypto-assets.
Interoperable smart contracts could give industries such as healthcare, law or real estate a boost, for example by allowing important business information to be sent between private and public networks in customizable ways. and controllable.
Second, interoperability drives decentralization: many crypto users still depend on centralized entities to transfer or convert their assets between ecosystems. Although this situation is unavoidable due to the recent nature of blockchain technology, it nevertheless presents a high point of failure, vulnerable to malicious actors and regulatory risks.
Current tools for implementing interoperability
Interoperability is generally implemented in three ways:
Side chains:
Sidechains are separate blockchain networks that are compatible with a single mainchain. Each sidechain has its own consensus mechanism, its own security settings and its own tokens. These sidechains usually have their own specific use cases that are distributed accordingly to improve processing efficiency. Several major crypto projects, such as Polkadot and Cosmos, were designed from the ground up to be complete cross-chain infrastructure solutions.
Oracles:
In the context of blockchain technology, oracles bridge the information gap between on-chain and off-chain environments. Decentralized oracle services like Chainlink play a crucial role in feeding smart contracts off-chain data and aiding interoperability by ensuring that different ecosystems refer to a common source of information.
Bridges and "swaps":
Cross-chain bridges allow a digital asset belonging to an individual to be locked to one chain while an identical asset is "minted" to another chain and sent to an address belonging to the original owner. Atomic "swaps" allow users to exchange tokens from different blockchain networks in a decentralized way. Both are automatically enabled through the use of smart contracts and play a central role in facilitating transfers of value between multiple chains.
The crypto-asset ecosystem is currently fragmented and barriers