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Despite the cold market, June 2022 is a good month for events and news in the crypto space. Consensus 2022 and NFT NYC host some of the biggest names in Web3, DeFi, and NFT, and we were lucky enough to attend some interesting panels and hear about the best recent developments from industry leaders. While the bear market is indeed set, the event shows that there is much to be expected for cryptocurrencies in the future.
Web3, DeFi, and NFT may be the focus of discussion, but some of the most interesting conversations are about the future of built -in multichain. At Consensus 2022, speakers from blockchain scalability solutions such as Polygon, Cosmos Network and Moonbeam spoke during a four -part panel series, “Scaling the Multichain Future.”
The discussion suggested that interoperability will be central to the success of the blockchain in the years to come because of the hundreds, if not hundreds of thousands, of additional blocks coming on the scene. It is clear that interoperability has become one of the most important keys to growth and innovation in the blockchain space.
While panelists from established scalability and cross-chain solutions like Axelar and Boba Network discussed the urgent need for the future of this multichain to be operational and user-friendly, some new people in the space also caught our attention during the week. UniLayer NetworkThe emerging Layer-1 (L1) blockchain, presents itself as one of the most interesting problem solvers in the race for interoperability.
Why is interoperability so important to the future of multichain, and why do some claim that the survival of cryptocurrencies depends? In this article, we’ll examine in more detail about interoperability, what the future holds for cross-chain functionality across thousands of chains, and how emerging solutions like the UniLayer Network could eventually break the code for seamless multichain interoperability.
Why is there no block that will be a universal chain
Simply put, interoperability means the free exchange of data, digital assets, and information between blockchains. Because each block works independently with its own structure and logic, it becomes a major challenge to synchronize with each other.
Decentralization requires distributed ledger technology (DLT) to operate independently of other networks to ensure immutability, security, and autonomy. This is an important principle for decentralized networks. As a result, hundreds (if not thousands) of isolated blockchain networks have emerged, each with its own strengths and weaknesses.
The difficulty of creating the perfect universal network for all is best expressed in the “blockchain trilemma,” the belief that blockchain must sacrifice decentralization, security, or scalability. The result is we simply don’t have a fully decentralized blockchain, offer Bitcoin -level security, and are scalable enough to serve millions of simultaneous users with the app.
Hundreds of new blocks enter the market each year, creating an increasingly isolated ecosystem. Networks like Ethereum are decentralized and secure but small in size, while others like Solana can be scalable and decentralized but not secure enough due to network failures. The blockchain trilemma ultimately prevents a single L1 block from becoming a universal chain for all, directing users and developers to move from one block to another depending on their needs.
Peng Zhong, CEO of Ignite (formerly Tendermint), stated that “Web3 will certainly come to the same conclusion as Web2 about scalability and number of users, and it will not happen in one block or even a thousand blocks. The upper limit on the number of chains in the world is the number of companies in the world.”
Of course, in a multichain world that has the potential of millions of decentralized networks, there is a tradeoff that needs to be made. According to Zhong, the trade-off is interoperability. The Cosmos ecosystem, for example, now has more than 50 chains (called “zones”) with unique use cases. When Cosmos was developed, the assumption was that there must be multiple chains because there are applications to allow unlimited scalability while ensuring decentralization and security.
though Kosmos and other interoperable networks such as Polkadot have made important steps to lay the groundwork for Web3, both protocols having consensus mechanisms and logic that are not directly compatible with other leading blockchains such as Ethereum and Solana.
EVMs (Ethereum Virtual Machines) in Cosmos and Polkadot allow developers to deploy smart contracts and dApps based on Ethereum, but the host network cannot be operated. In other words, liquidity and assets cannot be shared in the network without the use of a cross bridge. As Vitalik Buterin notes, cross-chain bridges are difficult, dangerous, and vulnerable targets for hackers.
The future of multichain is essential to the success of blockchain and Web3. It is clear that we move into the world with thousands, if not millions, of different chains. Whether L1, L2, enterprise- or application-based, the main goal is to find ways to integrate these networks into a seamless ecosystem.
We still have a long way to go, but if Web3 is to replace Web2, it should be scalable, user-friendly and secure. Interoperability is key to creating a decentralized Internet where people don’t know if they are using multiple chains or ecosystems.
Build into the future of multichain
One of the most exciting aspects of the cryptocurrency movement is watching how unexpected innovations can change what we think can. In less than 20 years, Bitcoin, smart contracts, DeFi, and NFT have produced novel financial and creative economies previously unimaginable. Among crypto enthusiasts, some will oppose the disruptive innovations that still exist.
One of the highlights during Consensus week was the UniLayer Network, an omnichain interoperability platform that takes a different approach to solving the dilemma of data and isolated ecosystems. A UniLayer network is an L1 block that connects heterogeneous blocks by inserting these nodes into the host chain.
UniLayer Network’s Cross-Chain Transport Control Protocol (CTCP) acts as a universal transport bus to transfer data between addresses in each connected block. This creates opportunities for the seamless transfer of information, liquidity and digital assets across all connected chains. It is a unique approach that opens up some interesting possibilities for inter-chain communication without the need for third-party bridges and oracles.
One of the main barriers to interoperability is blockchain logic, which varies from network to network. Like a nation of different languages, it is impossible to understand. However, the cross-chain logic of the UniLayer Network removes this obstacle. As a result, UniLayer Network smart contracts can deploy cross-chain applications that use a variety of connected chain functions. For example, a cross-chain dApp can use Ethereum for revenue optimization, source liquidity from Solana, and perform settlements in Algorand.
Cross-chain technology is still being developed, but it opens up new world possibilities for developers and investors. There is still a lot to happen before the technology gains widespread adoption, however UniLayer Network certainly on the right path to creating a more streamlined and interconnected digital future.
Create a new economy
While some members of the crypto space claim there is little need for more than one chain – especially Bitcoin maximalists – in fact much depends on fostering a multi -chain ecosystem. “This is a socio -economic movement that is rebuilding more than just economic infrastructure,” said Violent Abtahi, COO of Boba Network. “We can create an infinite economy and enable everyone in the world to participate in the global economy. Multichain seems to be the right way to grow exponentially.”
In addition to creators, companies and NGOs can also greatly benefit from interoperability by having the ability to transmit and validate information independently of their personal chains using open source DLT. Cross-chain data transfer can help these entities ensure accurate data on the supply chain, audit records, citizenship information and more.
Blockchain still has a high barrier to sign up for many people around the world. However, multichain ecosystems can accelerate adoption by reducing network congestion, transaction costs, and technical learning curves. For Web3 to achieve the scalability, accessibility, and security of Web2, a multichain ecosystem must emerge to support millions, if not billions, of new users. In addition, interoperability allows users to own and control their own Web3 data by integrating it into multiple chains.
In a multichain world, there are no limits associated with how many blocks can be part of an overall ecosystem. While we are still in the early stages of Web3 and its components, having a variety of options to build has tremendous benefits for developers who want to explore endless possibilities for decentralized applications and infrastructure.
Interoperability has the potential to enhance every corner of the crypto space, especially in multichain ecosystems consisting of thousands or even millions of chains. Currently, however, the blockchain suffers from technical shortcomings that prevent cross -pollination of communities, developers, and protocol liquidity. In fact, most L1 chains are socially and economically isolated.
“There are bubbles in the Cosmos and bubbles in Ethereum. Each chain has its own bubble,” said Reynand Otida of UniLayer Network. “We need to pop all these bubbles and create a single ecosystem for the entire blockchain industry.”
On the basis of technologies like Cosmos IBC and Unilayer Network, we can see a new wave of decentralized networks and applications emerging. Where we are now, we are at the very dawn of the Web3 era, but there is no doubt that it will come and the transition is near. As this evolution occurs and Web3 grows in adoption, many developers, entrepreneurs, and startups will be drawn to everything it has to offer. Then there will be more options for building dApps with multichain support than can currently be imagined.