the major challenges of interoperability

The heterogeneity of the different blockchains has revealed security, scalability and decentralization flaws to which interoperability tries to respond. The idea of ​​an Internet of blockchains has become a priority.

If the blockchain makes it possible to link transactions, how can the blockchains be linked? This is the question the web3 ecosystem has been trying to answer for several years. The creation of an Internet of blockchains was thus at the heart of the discussions at the last Paris Blockchain Week Summit.

The first challenge is to unclog existing blockchains, like Bitcoin or Ethereum called layer 1. These are autonomous infrastructures, capable of processing and storing transactions. However, all these blockchains have specificities, both in terms of the uses they allow and their consensus system, a fundamental step in securing the network, or even the programming language used. The best known method and which for many users remains the safest is consensus by proof of work, a hardware validation by which miners will be paid to secure the ecosystem. It is on this concept that Bitcoin and Ethereum are based, which is about to update its consensus system to move towards a proof of stake, and thus favor software validation, which is faster, but which for some is less secure.

And if the Bitcoin network is today a safe haven in the crypto economy, Ethereum and its EVM (Ethereum virtual machine), is the reference blockchain on which many protocols are based, like Solana, Cardano or Tron. “Today, most solutions are based on EVMs, with Solidity coding, except that Ethereum is not the most efficient blockchain, nor the cheapest, but it is the most decentralized”, observes Itai Elizur, COO of marketing agency MarketAcross. Decentralization being at the heart of the blockchain concept, Ethereum quickly fell victim to its own success, and more and more transactions resulted in higher and higher fees. The bulk of the challenge lies in the need for interoperability that responds to the trilemma of the blockchain, and its three sine qua non conditions which are security, scalability and decentralization.

To respond to this, in 2020 the platform developed a so-called layer 2 solution through which the Ethereum blockchain integrated more than twenty second-layer networks, such as Uniswap, SushiSwap and Loopring. These networks act as side chains of Ethereum and allow protocols to be built on top of them. The best known is the solution of the Polygon project and its token Matic, which aims to improve the scalability of the mother blockchain. “The heterogeneity of blockchains is still noticeable, not only in terms of the costs of switching from one platform to another, but also in the security of transactions”, notes Ruben Merre, CEO of Ngrave, a portfolio of digital assets. Developers therefore have to choose between being part of the Ether network or working on an independent solution that would allow the blockchain to be linked to other networks.

Layers 0

In this, the Polkadot blockchain and its token, the DOT, created in 2017 by the co-founder of Ethereum, Gavin Wood, aims to guarantee the stability of the network while allowing the simplified development of decentralized software. This is a common basis for all blockchains, it intends to supplant existing bridges, which allow digital assets to be moved from one blockchain to another.

The role of layer 0 protocols is also to facilitate the sharing of functionalities between blockchains, such as storage or consensus methods. “With layers 0, developers will no longer have to tinker with this or that feature on this or that blockchain, but they have the opportunity to set up a mode of communication that will allow the interoperability of blockchains, even if they still need bridges to exchange with each other”, observes Ruben Merre.

Security and interoperability

Improving the scalability and decentralization of a network, while guaranteeing its security, is this calculation that the developers of the crypto ecosystem must solve. The latter must still remember the last hack of the Ronin sidechain, based on Ethereum and dedicated to the game Axie Infinity, which was reduced by 550 million dollars last March. In this case, it is a wallet which is also a “poorly secure” bridge, according to Ruben Merre, allowing the link between the assets of a blockchain and a video game developed by EVM technology. . “Ether has 35,000 validators, the Ronin bridge only 9, the problem is there,” he points out.

Crypto wallets thus appear to be a major point for improvement. “All the recent bridge hacks have been possible because most were developed internally, it’s a method that lacks perspective and ends up revealing flaws,” continues Itai Elizur.

The idea behind the development of these bridges is first to improve scalability, so far to the detriment of security or decentralization. “The blockchain trilemma is undoubtedly the only way to foster interoperability, and it is also on this that the adoption of cryptocurrencies on a global scale depends,” concludes Itai Elizur.

If no solution has managed to impose itself, it is indeed because of the blockchain trilemma, and it is on this that the players in the ecosystem will have to make progress.

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