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4 Interoperability Protocols For Seamless Cross-Chain Asset Transfers

4 Interoperability Protocols For Seamless Cross-Chain Asset Transfers
Paul L.
GUIDES

Blockchain interoperability remains one of the crypto industry’s most pressing challenges. The majority of decentralized networks operate in isolation from one another, and this means it’s difficult to transfer assets and data between them. It’s a state of affairs that’s disadvantageous to the industry, though, as it means developers and resources are spread thinly across multiple, competing networks instead of working together in a unified ecosystem. 

Yet the blockchain space has long since become what many refer to as a “multichain” world, where decentralized applications have been deployed across multiple competing networks. For instance, the decentralized exchange Uniswap was originally based on Ethereum but has since launched on BNB Chain, Polygon, Arbitrum, Optimism, and others. This has been made possible through the emergence of so-called “interoperability protocols” that exist to link disparate blockchains and enable the new multichain reality. 

Flare Network

Interchain communication and data acquisition is the name of the game for Flare Network, which provides dApp developers with a trusted method of accessing high-integrity data from blockchains and the internet. 

Flare enables cross-chain data exchange through a pair of data acquisition protocols. First is the Flare Time Series Oracle, which acts as a decentralized time-series data feed for dApps to tap into. Data is provided by an independent network of data providers, who are delegated and incentivized to deliver accurate information. The second component of Flare is the Flare State Connector, which makes it possible to reach consensus on events that took place outside of the blockchain network. So, a dApp might use this to access the result of a football match that’s published to an internet database. The score of the game is verified by a network of independent attestation providers who are incentivized to reach consensus. 

Earlier this year, Flare Network demonstrated how the Time-Series Oracle and State Connector can work in tandem to record the purchase of a Non-Fungible Token on Flare’s canary network Songbird, using an asset from another chain, Dogecoin. The two protocols provide chains with unparalleled, decentralized access not only to data from other networks, but from the internet itself.

Analog Network 

Analog is a Layer-0 protocol that’s building the foundation of an “omnichain network” centered on the concept of time stamped event data. Analog’s Timechain relies on a novel “proof-of-time” consensus mechanism to establish an indisputable history of events that is validated and made available through an Event Data marketplace dApps can subscribe to. The Timegraph API can then securely transfer this event data across blockchains, enabling assets to be transferred across networks in an entirely original way. 

Traditionally, multichain transactions in DeFi would be forced to use bridges, oracles or sidechains, a highly inefficient process with multiple steps involved. For instance with bridges, tokens from one chain must be locked in a smart contract to generate wrapped tokens on the other chain. The transaction means paying fees on both chains, and also introduces security risks via the smart contracts. 

Analog’s Timechain eliminates this inefficiency by creating a seamless connection between any two chains. When a cross-chain transaction is implemented, the verified event data is secured by “event proofs” before being shared across the two platforms involved automatically and securely. This makes it possible to transfer assets across different chains without using a bridge, oracle or sidechain, and is a highly promising solution to the problem of fragmented liquidity in DeFi.  

RocketX

RocketX has set itself the laudable goal of seamlessly uniting all blockchains into a single network, which it does by enabling one-click cross-chain swaps across all major chains. 

Its platform can be thought of as an advanced Centralized and Decentralized Exchange aggregator. It’s original in that it acts like a search engine for crypto users, helping them to find the best possible price on every crypto swap and trade by surfacing the available asset from hundreds of different platforms. Users can select the trading platform of their own choosing, and consider factors such as the asset price, processing time, security, slippage and protection from MEV. 

RocketX is uniquely able to simplify access to more than $100 billion worth of liquidity, aggregating all of the leading CEX platforms and more than 300 DEX platforms. It claims to offer seamless interoperability across 88 blockchains, and eventually aims to cater to more than 200. The project not only acts as a CEX and DEX aggregator, but also caters to dApps and institutions looking for a way to enable in-app swaps. 

IBC Protocol

The Inter-Blockchain Communication protocol was developed by the Cosmos ecosystem to fulfill its vision of creating an “internet of blockchains”, or network of independent chains that communicate with one another in a decentralized way. It works by relaying messages across this network of independent distributed ledgers. Using the IBC protocol, heterogeneous chains can trustlessly communicate with one another, exchanging value such as NFTs and cryptocurrency tokens. 

The majority of cross-chain bridges are developed by third-parties and their security can vary drastically depending on which two networks the user is interacting with. IBC differentiates itself by sending packets of information through a dedicated channel, with the transaction handled by a trustless relayer and authenticated after reaching the destination chain. 

IBC’s trustless and permissionless nature ensures that any party can serve as a relayer, meaning that the two participating blockchains do not need to trust the parties that send the information. It’s this essential component that makes possible the secure transfer of assets across chains. 

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