Interoperability is a big word with even bigger connotations for the cryptosphere. In Fact, apart from the burgeoning DeFi movement, no other industry vertical is attracting so much investment and interest.
What is Interoperability?
Essentially, interoperability is all about making crypto networks compatible with one another. By doing so, it is expected to unlock a world in which value can be transferred seamlessly across seperate chains and smart contracting languages, while capitalizing on the strengths that are inherent to each protocol.
Crypto Projects Are Racing to Crack the Interoperability Problem
Given that crypto networks have been incompatible with one another since day one, why so much hurry to solve the problem now? While attempts at bridging protocols have been made numerous times, in the last 18 months, developers have been actively competing to find a way. Currently, a few projects are moving ahead with plans to roll out proprietary solutions in the works.
There are many reasons fr this new found urgency. Mainly, the project to ship a viable solution for bridging major crypto networks first is most likely to dominate the market. Ethereum isa good example of this: it might not be the most user-friendly or scalable smart contracting blockchain, but its first mover advantage for developers cannot be overlooked.
There’s more than one way to cook an egg, and as the following projects working on three of the leading blockchains are demonstrating, there’s more than one way to achieve interoperability.
Bitcoin: RSK and Syscoin
RSK and Syscoin both utilize merge mining to tap into Bitcoin’s unparalleled security model, while providing a bridge to other protocols. In the case of RSK, this is achieved through RSK Infrastructure Framework Open Standard (RIF OS), a series of open protocols for dApp development. It provides interoperability between different blockchains, enabling developers to create applications that draw upon the strengths of specific crypto networks. Examples of RSK’s interoperability in action can be seen in solutions like the Lumino Network, which creates payment channels for every token issued on RSK, facilitating cross-token payments and providing full interoperability with the Lightning Network.
Syscoin is also looking to bridge the gap between Bitcoin and other crypto networks – primarily Ethereum. It achieves this through Syscoin Bridge, which provides trustless interoperability, making it easy to move from one protocol to another without requiring a mediator. Jagdeep Sidhu, Core Developer and Syscoin Foundation Chairman, explains: “The Syscoin developers have chosen Ethereum as the first integration for two reasons: to enable new and existing Syscoin Platform Tokens with Ethereum's time-tested smart contracts and toolkits, and to help address Ethereum Network's growing need for a viable scaling solution by giving ERC20s access to fast, secure, low-cost transactions on a scalable layer.”
Ethereum and EOS: LiquidApps
What RSK and Syscoin are doing for Bitcoin-Ethereum, LiquidApps is doing for Ethereum-EOS. Just like RSK aims to make dApps connectable to any crypto network, LiquidApps is facilitating the creation of multi-chain dApps. This is done via the originally named DAPP Network, making it cheaper to develop, launch and scale dApps.
To understand it better, think of EOS and Ethereum like Android and iOS. LiquidApps enables developers to launch dApps on both operating systems simultaneously, without having to substantially rebuild the application in the process.
The DAPP Network also reduces resource costs, which can get expensive on EOS for high volume dApps. LiquidApps takes much of this off-chain, significantly increasing efficiency. LiquidLink, is the company’s solution for integrating dApps with multiple blockchains. Data and assets from chains such as Telos, Ripple, Stellar, Tron, Cardano, and Bitcoin Cash can all be fed into dApps using LiquidLink.
To Interoperability and Beyond
The next step in the development of interoperability solutions will be the creation of pan-protocol products that can effectively unite all the chains under one banner. It may sound utopic, but this has got to be the endgame for crypto networks: complete compatibility and interconnectedness, enabling blockchains to overcome the sort of barriers that are synonymous with the traditional financial world. There are regulatory and protectionist reasons why payment networks such as Visa fiercely protect their payment rails. In crypto, however, there is no justifiable reason for crypto networks to be siloed.
Lowering barrieres to entry will be good for consumers and businesses alike, which is why everyone is looking for a way to make this a reality. However, there is still a way to go before this vision is actualized. While companies such as Wanchain, Cosmos and Quant Network are pressing ahead with solutions, AI-based PoS chain Velas is making significant inroads themselves. Through clever usage of game theory and Artificial Intelligence, the project aims to align incentives between network contributors, while providing a connection to multiple blockchains and a reputation mechanism to prevent cartels from forming. It’s already implemented inter-chain token transfers within the Velas wallet, with full cross-chain compatibility within reach.
When the interopability race is over there will be companies who triumph and ones who fail. However, for the industry at large and the end users, the exciting thing will be the possibilities of interoperability realized which will be a major game changer for all.