Despite the market cooling off, June 2022 is a great month for events and news in the crypto space. Consensus 2022 and NFT NYC have hosted some of the biggest names in Web3, DeFi and NFTs, and we were lucky enough to attend some fascinating seminars and hear about the best new developments from the industry leaders. While the bear market has really begun, these events have shown us that there is a lot to look forward to for cryptocurrencies in the near future.
Web3, DeFi, and NFT may be at the heart of the discussions, but some of the most interesting conversations around the omnidirectional future are under construction. At Consensus 2022, speakers from blockchain scalability solutions such as Polygon, Cosmos Network, and Moonbeam spoke in a four-part series, “Expanding the Future of Multimedia“.
The discussions made it clear that interoperability will be central to the success of the blockchain space in the coming years as hundreds, if not hundreds of thousands, of additional blockchains emerge. It is clear that interoperability has positioned itself as one of the most important keys to growth and innovation in the blockchain space.
While panelists from established cross-chain and scalability solutions such as Axelar and Boba Network discussed the urgent need to make this multi-channel future interoperable and user-friendly. users, several newcomers to the space also caught our attention during the week. UniLayer Network, an emerging Layer 1 (L1) blockchain, has established itself as one of the most exciting problem solvers in the race for interoperability.
Why is interoperability important for the omnidirectional future and why are some claiming that the existence of cryptocurrencies depends on it? In this article, we’ll take a closer look at what interoperability is, what the future with cross-chain functionality between thousands of chains looks like, and emerging solutions like the UniLayer Network that can finally crack the code. for seamless multiline interoperability.
Why no blockchain will be the common chain
Simply put, interoperability means the free exchange of data, digital assets, and information between blockchains. Since each blockchain operates independently with its own structure and logic, synchronizing them with each other is a big challenge.
Decentralization requires distributed ledger technology (DLT) that can work independently of other networks to ensure immutability, security, and autonomy. These are important principles for any decentralized network. As a result, hundreds (if not thousands) of isolated blockchain networks emerged, each with their own strengths and weaknesses.
The difficulty of creating a perfect global network for all is most evident in the “blockchain trinity,” the belief that a blockchain must sacrifice decentralization, security, or scalability. As a result, we don’t have a fully decentralized blockchain that offers Bitcoin-grade security and is scalable enough to serve millions of concurrent users with applications.
Hundreds of new blockchains enter the market each year, creating an increasingly isolated ecosystem. Networks like Ethereum are decentralized and secure but scale poorly, while others like Solana are scalable and decentralized but not secure enough due to network failures. The ultimate blockchain trio prevents a single L1 blockchain from becoming a common chain for all, causing users and developers to switch from one blockchain to another depending on their needs.
Peng Zhong, CEO of Ignite (formerly Tendermint), stated that “Web3 will certainly come to the same conclusion as Web2 in terms of scalability and number of users, and that will not be the case. out on a blockchain or even a thousand blockchains. Above the limit on the number of chains in the world is the number of companies in the world.”
Of course, in a multi-channel world made up of potentially millions of decentralized networks, there are trade-offs. That trade-off, according to Zhong, is interoperability. For example, the Cosmos ecosystem currently has more than 50 chains (called “regions”) with unique use cases. When Cosmos was developed, it was assumed that there had to be more chains with more applications to allow for unlimited scalability while ensuring decentralization and security.
Although Cosmos and other interoperable networks like Polkadot have taken important steps to create the foundation for Web3, both protocols have consensus mechanisms and logic that are not directly compatible with other leading blockchains such as Ethereum and Solana.
The EVM (Ethereum Virtual Machine) on Cosmos and Polkadot allows developers to deploy Ethereum-based smart contracts and dApps, but the server networks cannot interact with each other. In other words, liquidity and assets cannot be shared across these networks without using cross-chain bridges. As Vitalik Buterin noted, cross-chain bridges are difficult, risky, and vulnerable targets for hackers.
An omnidirectional future is crucial to the success of the blockchain and Web3 space. It is clear that we are moving towards a world with thousands, if not millions, of different chains. Whether L1, L2, enterprise- or application-based, the ultimate goal is to find a way to integrate these networks into a seamless ecosystem.
We still have a long way to go, but if Web3 is to replace Web2, it must be scalable, user-friendly, and secure. Interoperability is key to creating a decentralized Internet where people don’t even know they’re using multiple chains or ecosystems.
Building towards a multi-pronged future
One of the most exciting aspects of the cryptocurrency movement is seeing how unexpected innovations reshape what we think is possible. In less than 20 years, Bitcoin, smart contracts, DeFi and NFT have created new creative and financial economies that were previously unimaginable. Among crypto enthusiasts, few dare to bet that another disruptive innovation is near.
A highlight of Consensus week was the UniLayer Network, a multimodal interoperability platform that takes a different approach to solving isolated ecosystem and data dilemmas. The UniLayer network is an L1 blockchain that connects heterogeneous blockchains by embedding their nodes into the server chain.
UniLayer Network’s cross-chain transport control protocol (CCP) acts as a common transport bus to transfer data between addresses on each connected blockchain. This creates the opportunity for a seamless transfer of information, liquidity, and digital assets across any connected chain. It’s a unique approach that opens up some interesting possibilities for cross-chain communication without the need for third-party bridges and gods.
One major obstacle to interoperability is blockchain logic, which varies between networks. Like countries with different languages, they cannot understand each other. However, UniLayer Network’s cross-chain logic removes this barrier. As a result, the smart contracts of the UniLayer Network can deploy cross-chain applications that leverage different functions of the connected chains. For example, a cross-chain dApp could use Ethereum to optimize revenue, source liquidity from Solana, and make payments on Algorand.
Cross-chain technology is still in development, but it opens up a whole new world of possibilities for developers as well as investors. There is still a lot of work that needs to happen before this technology is widely adopted, but UniLayer Network is certainly on track to create a more streamlined, interconnected digital future.
Creating a new economy
While some members of the crypto space claim that there is no need for more than one chain – especially Bitcoin maximalists – in fact much depends on fostering a multi-chain ecosystem. Chain. “This is a socioeconomic movement that is reinventing more than just economic infrastructure,” said Violent Abtahi, COO of Boba Network. “We can create a borderless economy and allow everyone in the world to participate in the global economy. Multichain seems like the right way to expand exponentially.”
In addition to creators, businesses and NGOs can also greatly benefit from interoperability by having the ability to freely forward and validate information from their own chain with source DLTs. open. Cross-chain data transfer can help these entities ensure accurate data in their supply chains, audit records, nationality information, and more.
Blockchain still has many barriers to entry for many people around the world. However, an omnidirectional ecosystem can accelerate adoption by reducing network congestion, transaction fees, and technical learning curves. For Web3 to achieve the scalability, accessibility, and security of Web2, an omnichannel ecosystem must emerge to support millions, if not billions, of new users. Additionally, interoperability allows users to own and control their own Web3 data by aggregating it across multiple chains.
In the omnichannel world, there is no inherent limit to the number of blockchains that can be part of an overall ecosystem. While we’re still in the early stages of Web3 and its components, having multiple build options is a huge boon for developers looking to explore limitless possibilities for applications. and decentralized infrastructure.
Dawn of Interoperability
Interoperability has the potential to improve every nook and cranny of the crypto space, especially in a multi-link ecosystem consisting of thousands or even millions of chains. Currently, however, the blockchain space is experiencing technical shortcomings that prevent cross-pollination of communities, developers, and protocol liquidity. In fact, most L1 chains are economically and socially isolated.
“There is a bubble in Cosmos and a bubble in Ethereum. Each chain has its own bubble,” said Reynand Otida of UniLayer Network. “We need to pop all these bubbles and create a single ecosystem for the entire blockchain industry.”
On the foundation of technology like Cosmos IBC and Unilayer Network, we can see a new wave of decentralized networks and applications emerge. Where we are now, we are at the dawn of the Web3 era, but it is certain that it is coming and the transition is near. As this evolution unfolds and Web3 grows in adoption, more developers, entrepreneurs, and startups will be captivated by all it has to offer. By then, there will be more options for building dApps with polyline support than we can imagine.