Prepare to witness a future of unprecedented blockchain interoperability, as top executives at Korea Blockchain Week predict the demise of “chain tribalism” and the rise of numerous interconnected chains, all while eliminating the threat of cross-chain bridge hacks.
Fueling these bold claims is a lineup of cutting-edge products set to launch before the year’s end, promising to revolutionize blockchain interoperability by surpassing current solutions deemed nonsensical and vulnerable to hackers.
Vance Spencer, the visionary co-founder of Framework Ventures, shared with Cointelegraph during KBW his firm belief that the abundance of upcoming solutions, including Chainlink’s Cross-Chain Interoperability Protocol (CCIP), will render the choice of blockchain irrelevant for projects.
He emphasized that most startups initially adopt layer-2 solutions like Optimism or Arbitrum, but soon yearn for their own roll-up, as if everyone is striving to establish the new industry standard.
According to Spencer, in a future where cross-chain interoperability reigns supreme, the dynamics will shift drastically, rendering the choice of rollup inconsequential. “It’s really not gonna matter which rollup you’re on,” he confidently stated. Instead, the focus will be on the ability of contracts to seamlessly communicate with one another.
Spencer provided an example of the Cross-Chain Interoperability Protocol (CCIP), which enables users to possess assets on one chain while effortlessly interacting with contracts on another chain, all through cross-chain messages rather than relying on a blockchain bridge.
Brandon Truong, a core contributor to ZetaChain, explained that their platform operates similarly to CCIP, with the added advantage of facilitating programming interoperable smart contracts. Truong believes that interoperability will soon become the norm among app builders, leading to a reduction in “chain tribalism” and a greater emphasis on utility. He also criticized older blockchain bridge solutions for their fragmented and insecure nature.
Another exciting product on the horizon is MetaMask Snaps, which empowers developers to launch feature-rich apps for the crypto wallet. This innovation opens up compatibility with various blockchains, including Bitcoin, Solana, Avalanche, and Starknet.
Hundreds of chains
Georgios Vlachos, the co-founder of cross-chain protocol Axelar, shared his bold vision during a captivating panel discussion at KBW. He firmly believes that in the near future, we will witness the emergence of “hundreds of chains” bustling with significant economic activity.
Vlachos backed his argument by pointing out the indisputable fact that numerous influential individuals and companies in the industry are actively developing cross-chain solutions and are driven to launch their own Layer 1 blockchains.
Highlighting the necessity for multiple blockchains, Vlachos expressed his belief that a single blockchain simply cannot handle the colossal volume of transactions required. He emphasized that even the most ambitious blockchain would struggle to surpass 10 million daily transactions, which pales in comparison to the astounding 530 million daily average transactions processed by the payment behemoth Visa in 2022.
“If we want to become foundational architecture for Web2 we need to scale this by an order of magnitude and this is really, really hard,” he said.
“The answer is to scale horizontally and create many, many different blockchains.”
How Cross-Chain Bridges Can Protect You from Hackers’ Traps
In the realm of asset transfer between networks, the prevalent use of blockchain bridges is riddled with vulnerabilities, according to the insightful Founder and CEO of Router Protocol, Ramani “Ram” Ramachandran. In his view, these bridges are highly susceptible to hacks and are destined to be replaced by more advanced cross-chain solutions, including the one developed by his own protocol.
During a stimulating conversation with Cointelegraph at KBW, Ramachandran shed light on the flaws inherent in cross-chain bridges. These bridges necessitate the locking up of value in order to represent it on another blockchain, making them an enticing target for malicious actors. This vulnerability has resulted in numerous bridge hacks, highlighting the urgent need for a superior alternative.
Describing the current state of affairs as highly inefficient and a significant honeypot risk, Ramachandran vividly illustrated the perilous scenario where billions of dollars are held captive within a bridge, causing hackers from around the globe to salivate with anticipation, eagerly attempting to breach the defenses and claim their share of the spoils.
To address this critical issue, Ramachandran proposed a workaround that involves sourcing liquidity from multiple wallets, a method that Router Protocol intends to implement in the forthcoming weeks. This innovative solution aims to mitigate the risks associated with centralized bridges and provide a more secure and efficient means of asset transfer.
In the future, individuals seeking to transfer funds between different chains will employ a user-friendly tool that resembles a peer-to-peer transfer, with an intermediary serving as the facilitator of cross-chain swaps in exchange for a fee.
Describing this intermediary as a courier, Ramani Ramachandran elaborated on their role in the process. They fulfill the transaction on the destination side and subsequently provide proof of completion, prompting the release of the corresponding funds. This system eliminates the need for locked liquidity on a bridge or semi-centralized platform, as all funds remain safely stored in intermediary wallets.
Adapt or perish
According to Chainlink co-founder Sergey Nazarov, achieving immediate cross-chain interoperability is not only beneficial for users but also crucial for the industry to establish its legitimacy by offering practical real-world applications.
In his keynote speech at KBW, Nazarov emphasized the importance of Web3 applications being able to effortlessly connect with all blockchains. He envisions a seamless user experience where individuals can confidently utilize applications across different chains without any worries or complications.
According to Sergey Nazarov, the concept of being confined to a single blockchain with its limited market and infrastructure is illogical, as it contradicts the principles of the internet.
Nazarov emphasized that the success of our industry relies on our ability to provide reliable systems that currently do not exist. He stressed that when users invest their value into an application, it should be securely and consistently accessible to them even if it moves to a different platform.
If we fail to meet this basic standard, Nazarov warned that our industry will be perceived as trivial or lacking direction.
Nazarov expressed his belief that the banking system will be instrumental in driving the adoption and utilization of Web3 to the next level due to the value they hold.
He highlighted the importance of finding a way to transfer the value from banks to blockchains. Nazarov stated that banks and the global financial system recognize the value of blockchain and digital assets. Chainlink is actively working on establishing connections between banks and public blockchains to enable the flow of value from banks to the public blockchain environment.
However, Nazarov identified two major obstacles hindering the connection between banks and blockchains: the lack of legal clarity on how they can connect and the absence of a technical process to facilitate this connection.
He emphasized that as more value enters our industry, we all stand to benefit.