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“I started contributing to a couple of DAOs… [and] receiving payments, though not on Ethereum. Many companies prefer to pay on Polygon”, Kravi writes, because of lower gas fees and convenience. Trying to convert his crypto earnings to fiat, Kravi was confronted with a predicament: “There’s no way I can transfer or convert my crypto balance on the Polygon wallet to my bank account”. Confused by the process, Kravi investigated further and settled on a path forward. “First”, he writes, “I need to open a custodial account with the likes of Gemini, or WazirX.” After some delays in the verification process, he did manage to activate a custodial account. Yet, what seemed like an adequate solution only opened the door to another issue: “These [accounts] don’t accept transfers from Polygon.. only Ethereum.” Further perplexed, Kravi concluded that he needed to bridge assets from his Polygon wallet address to his Ethereum address. And that only introduced more friction, leading to a failed transaction and lack of gas funds. In the final analysis, Kravi was left thinking, “What a convoluted way to access my own money!”. Read his full story here [1].

Surely, Kravi is not alone. His story reflects the experience of many crypto users and that of broader society for that matter. We have a real lack of interoperability across systems, and it impacts the way institutions transfer data, value, and messages. In the crypto sphere, an absence of interoperability is felt across the existing and growing number of blockchain ecosystems, each with its customs and “rules of the road”. A future without blockchain interoperability is akin to the Internet before TCP/IP. It creates a real barrier to mass adoption.

ZetaChain Twitter Poll

Over the past few weeks, we embarked on a quest to understand how crypto users think about the current and future state of blockchain interoperability. We launched a writing contest on the topic and received over 60 submissions from across the globe. What we found is that poor interoperability does seem to be a major bottleneck plaguing users and developers. In this article, we shine a light on these stories, insights, and predictions about the future of blockchain.

What good is a multichain world without interoperability?

Article submissions revealed a strong belief by crypto users that the future of blockchain is multichain. “While some people tend to favor one blockchain to rule them all”, says contest winner Thelayer3guy, “it’s becoming increasingly clear that the future of the ecosystem will be made up of multiple blockchains” [2]. At the same time, despite greater blockchain optionality, it remains challenging for users to conveniently interact across them. Emmanuel Akubuilo writes, “Currently, we are in an era of blockchain proliferation…”, but, today, and since blockchain’s inception, it’s always been an issue to efficiently, affordably, and safely transfer value from one chain to another [3].Another contest winner Haggs points out that the challenge starts at the development level. He says projects are “limited to the blockchains where they operate. And even though they can launch their protocol on multiple chains, interoperability between them is very complicated” [4]. The result is something like the graphic below by Daoordao where neither the user’s wallets, the contracts, nor the network truly spans across chains [5]. The user experience is something like having four log-ins. Both authors identify how fragmented development, by natural extension, leads to fragmented end-user experience.

Image by Daoordao

In so many words, the majority of authors expressed frustration with the current landscape of cross-chain solutions. Even so, they remained idealistic in their thinking that crypto users in the future will be able to operate across different ecosystems seamlessly.

The continuum of interoperability solutions

Blockchain interoperability is not a set rule book. Many solutions, precipitated by the influx of alternative Layer 1 blockchains, attempt interoperability. As Om Singh so eloquently points out, blockchain interoperability ”refers to a broad range of techniques that allow different blockchains to listen to each other, transfer digital assets and data between one another, and enable better collaboration” [6]. Singh helps us realize interoperability is not simply a yes or no categorization. Rather, it’s more appropriate to think of it as various features along several continuous dimensions.

Challenges in cross-chain

The problem with standard cross-chain approaches such as token bridges is that users are subject to high fees, delayed transaction settlement, and worst of all, potentially lost assets from hacks. For these reasons, the word “cross-chain” carries a negative connotation and is a hot area of contention among prominent crypto figures.

Vitalik Buterin correctly argues bridges that lock assets introduce a ton of risk and interdependencies. What happens behind the scenes is that most bridges wrap tokens into synthetic assets that are effectively an “I owe you” on assets parked at the bridge. Contest winner and crypto blogger Yakugakusei writes, “Cross-chaining is problematic because it means that a lot of money is gathered at the bridge, and hackers have an ever-increasing incentive to attack there” [7].

And attack they have. Lucky Ducky cites examples of recent bridge exploits including Ronin Bridge at 620 million USD, Poly Network at 610 million USD, and Wormhole at 325 million USD [8] (Source: Coin98 Insights). Undeniably, these are not trivial events. They raise important questions about security and the future of multichain.

Advancing toward interoperability

Emerging from the rumble caused by questionable cross-chain solutions are some pretty remarkable new multi-chain developments. For example, in the realm of cross-chain communication is the Inter-Blockchain Communication (IBC) module. For chains that adopt it, IBC establishes strong interoperability between sovereign blockchains such that it can support coin transfers, atomic swaps, cross-chain DEXs, and even cross-chain smart contracts. The catch is that the protocol only works with compatible blockchains that adopt IBC. Therefore, IBC cannot extend to non-smart contract chains such as Bitcoin and is not future proof-against new chains with their own consensus mechanism. Several other approaches and projects aim to provide more generalized inter-blockchain connectivity, but they either use questionable trust models or are limited in their genericness.

Filling the gap with ZetaChain

ZetaChain blockchain offers the first public, decentralized, and permissionless cross-chain smart contract platform that connects to any existing or future blockchain and layer. You can think of it as a programmable public computer that directly reads and updates the status on all connected networks — a blockchain for all important blockchains — with anti-fragmentation at its core.

Image by Sagitario [9]

A couple of important features make ZetaChain inherently agnostic. First, it supports externally managed smart contract capabilities meaning it can access and manipulate assets on any chain including even non-smart contract capable chains such as Bitcoin and Dogecoin. Secondly, it offers developers a single, trustless environment to build, deploy, and maintain dApps that natively work across any chain. For existing smart contracts, developers can add a few lines of code to transform their dApps into “omnichain dApps” or odApps. These techniques circumvent the need for ZetaChain to wrap tokens or bridge assets.

Native cross-chain asset swap

You could imagine a plethora of odApp ideas made possible by an all-purpose cross-chain smart contract platform. From AMM exchanges to omnichain governance tools and NFT ownership transfer, the possibilities are limitless. Ultimately, one very foundational use case will influence the next generation of odApps, that is, native cross-chain value transfer. Camillo777’s creative article submission analogizes ZetaChain’s one-way peg design and revert function for cross-chain swaps to cosmic space travel. Let’s take a look at what he calls, ZetaChain Logistics [10]:

Need to safely move your assets from one planet to another? Ask the ZetaChain Logistics protocol! We safely and automatically transfer your assets (tokens, NFTs) to the destination planet. Our ZetaChain Connector shop handles all of the fees, gas, and cross-planet transactions for you.

We have the licenses to lift off and land on every planet across the galaxy as we natively connect to all of them (even Bitcoin, Dogecoin, and Monero). You just need to pay with $ZETA tokens, which allows our spaceships to fly. You can track the shipping in real-time with our blockchain Explorer app (AKA ZetaScan), making the shipping status fully transparent and explorable.

Our spaceships are atomic: if we cannot land on the destination planet because of traffic or prohibitively high fees, then the payload is automatically and safely reverted to the starting location. We don’t ship wrapped assets to the destination; we ship your original assets!We use the latest, state-of-the-art spaceships and technologies: Proof of Stake (PoS), Cosmos SDK, Tendermint PBFT consensus engine, standard ECDSA/EdDSA keys, with multi-party threshold signature scheme (TSS).For more information on the technicalities of ZetaChain Logistics, please refer to the spaceship manual (ZetaChain whitepaper).

Revisiting Kravi’s swap experience

With the first native cross-chain swap app on the horizon, it makes you think back to Kravi’s crypto bridging experience and how things could have gone better. In fact, before his story concludes, Kravi ponders what it would have been like if he had ZetaChain [1]:

“Gas fees for cross-chain transactions can be step/bundled and paid in ZETA coins (which can be issued natively across any blockchain) at the time of initiating.” Kravi states, “there would not have been a transaction fail on Ethereum, due to lack of enough balance… it would have been a breeze!”. It also would have meant “seamless transfer of funds to my custodial wallets/trading accounts, from where, I would have been able to transfer to my bank accounts anytime.” With ZetaChain, “I can swap onto any coin, and more importantly onto any blockchain, and I would have a vast array of DeFi options across different chains… that’s giving me goosebumps.” Kravi concludes, “…most of the issues I faced, as someone new to the crypto space, will soon be a thing of the past.”

Join our community

A new wave of omnichain dApps powered by ZetaChain is coming. We invite you to join our Discord community and follow ZetaChain on Twitter @zetablockchain so you can partake in testing this next generation of groundbreaking crypto products.

About ZetaChain

ZetaChain is the foundational layer to a multichain future. The novel blockchain enables multichain functionality without using bridges or wrapped tokens and the easy deployment of omnichain-dApps, or odApps. These applications can manage and connect data and value across all smart contract platforms as well as non-smart contract platforms like Bitcoin and Dogecoin.

References

1. ZetaChain: The Meta Layer of Blockchains, Kravi

2. la première blockchain “omnichain” décentralisée, Thelayer3guy

3. An Article On ZetaChain, Emmanuel Akubuilo

4. The future of multiple chains, Haggs

5. 拥抱多链世界, Daoordao

6. The Rise of Blockchain Interoperability, Om Singh

7. ZetaChain: 全てをつなぐブロックチェーン『オムニチェーン』の到来, Yakugakusei

8. Tìm hiểu về Zetachain — Giao thức tương tác Omnichain, Lucky Ducky

9. ZetaChain: Eine neuartige Omnichain-Lösung für das Blockchain-Interoperabilitätsproblem, Sagitario

10. ZetaChain Logistics, Camillo777

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