Blockchain interoperability is becoming critical because the future of decentralized finance (DeFi) will more than likely feature thousands of tokens with a wide range of use-cases. Since there will be many different token formats, like ERC-20, ERC-712 or BEP-20, we will need effective ways to allow different blockchain networks to communicate with each other.
The exchange of data and monetary value must become seamless and frictionless in order to support mainstream crypto adoption as well as high-performance enterprise-grade applications. At present, investors and traders are already using a wide range of crypto tokens such as Bitcoin (BTC) as a store of value or Ether (ETH) to build and deploy decentralized applications (dApps). Since each token has its own use-case or unique value proposition, they might not necessarily be competing with each other, but may serve to complement each other.
In order to support the fast-evolving DeFi ecosystem, we need robust bridging solutions that will enable the exchange of data and tokens. Already, there are a number of high-potential projects currently in the market that aim to facilitate blockchain interoperability at scale.
Serving as Cross-Chain Interoperability, Liquidity Transfer Mechanism
Highly anticipated project deBridge aims to serve as a cross-chain interoperability and liquidity transfer protocol. It has been designed to enable the decentralized transfer of assets between various blockchains.
As explained by its development team, the cross-chain intercommunication of deBridge smart contracts is being powered by a network of independent Oracles/validators who are elected via deBridge governance. As noted by its creators, the deBridge protocol is an infrastructure platform and hooking service for the cross-chain composability of smart contracts and cross-chain swaps. The protocol also supports the bridging of any arbitrary asset and data, along with facilitating the bridging of non-fungible tokens (NFTs).
deBridge, a cross-chain interoperability and liquidity transfer protocol that enables decentralized transfers between all blockchain or distributed ledger tech (DLT) networks, has become a key player in the nascent DeFi space. After launching its testnet version 1.0, which came after winning the Chainlink Global Hackathon, the team reported receiving meaningful feedback from their partners and community.
As noted by deBridge, the last version served its purpose quite well with more than 1,400 Ethereum (ETH) staked via Kovan and thousands of successful transfers. The deBridge team confirms that it was a "great" first iteration.
The team is now pleased to announce that Testnet 2.0 has successfully passed internal testing and is currently open to the public.You may check out Testnet 2.0 here.
Continuing to Make Refinements to User Interface (UI), User Experience (UX)
With the latest version, users can expect an improved user interface (UI). Users will also be able to transfer their assets cross-chain with the same feel or familiarity of a Uniswap-like approach and seamless layout.
Additionally, there are no listing mechanics. Any arbitrary asset may be bridged. The wrapped asset gets automatically deployed when a digital token is transferred into the target chain for the first time. Wrapped assets have the same crypto addresses in EVM blockchains and the deployment of the wrapped asset costs around ~725k of gas.
In addition to these updates, there are now gas optimizations for affordable cross-chain transactions. Moreover, the claiming of crypto tokens on the target blockchain costs only around ~250k of gas.
While sharing other updates, the developers noted that the deBridge explorer is able to show all protocol statistics and cross-chain transfer details. The receiver of the transaction will know the sender’s address in order to validate the transfer is actually from a trusted protocol/smart contract. Notably, deBridge smart contracts now have equal addresses in EVM blockchains.
Improved Implementation of Smart Contracts
As explained by its developers, the new design of the deBridge infrastructure layer comes with off-chain validation of cross-chain transactions. Validators are able to operate a deBridge node alongside full nodes of supported blockchains or DLT platforms.
deBridge validators are able to track all transfers and as soon as the transaction achieves its finality, and each validator may sign its unique identifier. The resulting signature gets saved into IPFS so that anyone is able to retrieve it.
Any arbitrary user or keeper may obtain validators’ signatures from IPFS and pass them onto a deBridge smart contract in the target chain alongside all cross-chain transaction parameters. If the minimum required signatures are valid, the smart contract will proceed to execute the transfer via the target chain.
Validators no longer need to cover validation costs as all signatures get stored off-chain on IPFS. As noted by its developers, deBridge operates as a self-sovereign protocol and does not depend on gas prices or the uptime of supported blockchain or DLT networks.
The deBridge team has clarified that their product is still in beta mode. They would also look forward to getting feedback, including recommendations on how they can improve the current version. We may also expect more regular updates to be announced soon.
Consumers and businesses are looking for more accessible digital financial services. These new requirements will have to be offered via robust digital infrastructure that is able to support interoperability between various blockchains and diverse financial ecosystems.
Initiatives such as deBridge are primarily focused on offering critical cross-chain solutions so that digital asset trades can be performed easily. It should also become easier to exchange information across different blockchain or DLT networks. Already, there are numerous crypto token standards that aren’t compatible. This has resulted in highly fragmented systems and there’s currently not enough liquidity to support a scalable DeFi ecosystem. But if these protocols can achieve greater interoperability, then the global tokenized economy may attract more mainstream users.