Five years ago blockchain technology was a relatively niche topic, limited mostly to crypto traders looking to make money. Fast forward to today, and it’s being used over a huge range of industries, from money transfers, to insurance, to real estate, and even voting.
As the number of blockchains continues to rise, and blockchains continue to become more powerful, interconnecting chains is becoming increasingly necessary. Cross-chain technology has quickly become the primary solution for enhancing blockchain interoperability and improving the efficiency of value-transfer between blockchains. Over the past couple of years, there has been a sharp rise in the number of cross-chain interoperability platforms available.
In this article, we’ll be looking at two up and coming cross-chain decentralized platforms, Syscoin and PolyNetwork.
What is Syscoin and How Does it Work?
Syscoin is a decentralized, open-source project that was founded in 2014 by the founders of Blockchain Foundry. Essentially is a trustless computing platform that combines Ethereum and Bitcoin protocol into a single system. It provides Bitcoin’s safety with the excellent performance characteristics of Ethereum 2.0, while also being fast and cheap to use.
One of the major benefits of Syscoin is its high level of security. It uses a Proof of Work (PoW) consensus algorithm that secures the ledger and protects from “double spend” attacks.
Syscoin recently introduced their Syscoin NEVM product, which integrates Ethereum’s virtual machine and scalable smart contracts to the system. The smart chain is secured by Bitcoin's security model and Bitcoin merged-mining, with true L2 scaling via ZK-Rollups. This design keeps intact the "gold standard" security of the Bitcoin consensus model.
What is PolyNetwork and How Does it Work?
PolyNetwork, on the other hand, is a cross-chain DeFi platform launched by the founder of the Chinese blockchain project Neo. It operates on the Binance Smart Chain, Ethereum, and Polygon. Similar to Syscoin, it is designed to implement interoperability between multiple chains to build the next generation of internet infrastructure.
Chains that connect to Poly Network require no major changes to their core technology. For chains that do support smart contract technology, deploying two smart contracts is sufficient to support cross-chain functionality. For chains that do not support smart contract technology, interoperability can be enabled by integrating two modules.
Docking to the Poly chain also enables communication with all other isomeric chains that are connected -- including access to Neo and Ontology’s public resources. Poly Network has already integrated Bitcoin, Ethereum, Neo, Ontology, Elrond, Ziliqa, Binance Smart Chain, Switcheo and Huobi ECO Chain.
Given this large number of networks, users on the platform will be able to swap tokens or process transactions across these supported blockchains easily.
In August, hackers exploited a flaw in PolyNetwork’s code that drained $600 million in crypto
Unfortunately, PolyNetwork has a very significant drawback. As anyone who follows news within the crypto industry will already have heard, PolyNetwork was the subject of a major hack back in August 2021. The hacker drained approximately $600 million in crypto by exploiting a flaw in PolyNetwork’s code that enabled them to transfer assets to their own crypto wallets.
Following the attack, PolyNetwork promised the hacker a $500,000 bounty in return for restoring the user funds. In what seemed like a desperate plea to convince someone to own up, they even invited them to become the “chief security advisor” of the company.
This makes it one of the biggest crypto attacks in history. Ultimately, it demonstrates how vulnerable these new cross-chain protocols can be to attacks.
Syscoin vs. PolyNetwork: The Final Verdict
When it comes to announcing the final verdict between Syscoin and PolyNetwork, it seems impossible to ignore the primary drawback of PolyNetwork: Its poor security history.
No matter how much PolyNetwork has improved, and how many excellent features the platform has, there is no doubt that it will take years to shake its association with this hack, and will constantly be thought of as one of the most significant blockchain hacking incidents ever.
The new Syscoin Network-Enhanced Virtual Machine (NEVM), on the other hand, is designed to provide smart contracts and interoperability that can scale to smart cities and beyond, while remaining low-cost and performant, in order to create a more solid foundation.