Author: Five Fireball Leader / Source: Vernacular Blockchain
Author | Five Fireball Leaders
Produced | Vernacular Blockchain (ID: helloBTC)
Before you know it, time has entered 2022.
It has been 4 or 5 years since we first proposed the concept of cross-chain in 2017-18.
No one thought that our “cross-chain” progress would be like this.
A bunch of bridges with huge security risks are responsible for the mutual transfer of assets on our various chains every day, and there are tens of millions or even hundreds of millions of stolen news every one or two months. The real “interoperability” at the contract level, which was dreamed up before, is even more vague.
How else to say, a new technology, people always overestimate its short-term impact and underestimate its long-term impact!
It now appears that it is not just an impact. The speed of realization, we are often “overestimated” optimistic, just as the merger of ETH2.0 has been delayed again!
I’m really not surprised at all…
However, in any case, we have stepped into the door of interoperability with at least one foot, we have officially entered the multi-chain universe, various cross-chain bridges, and cross-chain companies have sprung up like mushrooms. We are not far from true “interoperability” .
This article will list most of the interoperability solutions currently on the market . Due to space limitations, only an introduction will be given to each type. If you are particularly interested in a major category, you can only use DYOR (Do Your Own Research).
This is the first part, listing the current asset-level interoperability solutions, and the second part will talk about inter-chain contract-level interoperability solutions. Asset-based interoperability, which is our current interoperability routine, is the foundational application of interoperability.
01
bridge
The most common is naturally to transfer assets through a cross-chain bridge. Cross-chain bridges are currently divided into the following categories:
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Third-party external validator mode – the most common Multichain (formerly Anyswap), Synapse, and various official bridges are basically this mode.
This mode is the most flexible , because you use this bridge to bridge an asset from chain A to chain B. The contract of chain A on the bridge will lock (lock) the asset for you, and chain B will give you Mint (cast) a fake ( White bars), in theory, any asset can be crossed.
The disadvantage is also obvious . You have to trust the third-party nodes on this bridge. After all, the real money is locked in the contract controlled by the node. First, you have to believe that the node is not evil, and secondly, you have to make sure that the node is not hacked. Front-end time Ronin’s $600 million is not that much.
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Light client mode – This is naturally represented by Cosmos’s IBC, which is theoretically the most comfortable mode because it fully implements Trustless.
Of course, Trustless here does not mean that this model is 100% safe. What he means is that in the process of assets from A to B, you do not need to trust a third-party validator or node, you The security of Chain A and Chain B are all provided by the security of Chain A and Chain B themselves.
Of course, the price is that the deployment cost of this model is too high in many scenarios. For example, IBC can only be deployed on the chain made by the Cosmos SDK. If it is to be deployed directly on ETH, the cost will be astronomical, so the flexibility is greatly limited.
LayerZero, which has been very popular recently, also belongs to this category in essence, but it has been improved. We will talk about it in detail in the next chapter on interoperability between chains.
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Liquidity network – represented by Celer, Connext, and Hop. Generally speaking, the cross-assets will be assets that have both the source chain and the target chain, and then achieve relatively safe cross-chain through atomic swaps and hash locks. The reason why it is safe is because for users, there is no “real money and fake money” mentioned in Case 1, and with the blessing of the above two technologies, the cross-chain will either succeed or fail, and there is no intermediate state, so don’t worry Assets damaged. But for LPs (liquidity providers), the security of their funds is essentially the same as the third-party external validator model, and they still have to worry about nodes doing evil or being hacked.
It is worth mentioning that recently OP and Nomad jointly developed a fraud proof bridge solution called Optimistic Bridge , which applied the technology of Optimistic Rollup. To put it bluntly, there are Updater (working) and Watcher (tracking) in the system. Similar to Rollup, if a cross-chain node is evil, Watcher finds that it can be challenged at any time, and then if successful, it will get rewards and evil nodes. You will receive a financial Slash penalty.
The price of doing this is a 30-minute challenge window . Although it is much smaller than the 7-day window of Optimistic Rollup, for cross-chain users, asset transfer may be barely acceptable. If the contract call waits for 30 minutes, the day lily will be lost. It’s cold…so it feels like the scene is more restrained. Furthermore, I am now used to 1-2 minutes for assets to arrive across the chain. Although 30 minutes is intuitively acceptable, maybe the market just won’t buy it for this time…
02
DAPP
At present, some leading DAPPs have also begun to create a native cross-chain experience, and the two major transaction protocols AAVE and Compound are the first to bear the brunt.
AAVE V3 was just updated not long ago, which is a big upgrade. In addition to the most popular fund pool isolation function, the most important thing is the Portal function in V3.
What does it mean, in simple terms, it allows you to mortgage ETH on ETH, borrow USDC on Arb for various Farming, and finally return USDC on Polygon to get back the ETH that was first mortgaged on ETH.
Does it look fancy?
As long as it is a chain deployed by AAVE, you can basically access this Portal to realize the “full chain sharing” operation of your assets.
Compound and AAVE have similar ideas but different implementation methods. Compound uses Substrate to make a Compound Chain named Gateway. Users can directly connect this chain as the entrance to perform operations such as all loans and repayments of other Compound chains. . It is still under development, and the progress is slower than AAVE. After all, it needs to be upgraded from a DAPP to a chain…
03
Multichain Liquid Aggregation
In addition to the mutual transfer of assets between various chains, for DEX, multi-chain liquidity aggregation is a new way to play in the multi-chain/cross-chain era.
At present, there are mainly four players in this track, Rune, Osmosis, Chainflip, and Renlab. The first two are online, and the latter two are still under development.
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Rune
Rune should be regarded as the only Dex Chain that can truly aggregate multiple heterogeneous chains . On it, native BTC, ETH, BCH, LTC, Luna, Doge can be exchanged through a single wallet… It uses threshold signature technology, so it does not exist Wrap assets, the exchange of this heterogeneous native asset is also the main selling point of Rune. In addition, Rune serves as the pairing and routing asset for all trading pairs, and forces nodes to mortgage Rune Token twice the TVL amount. It is also the only company on the market that uses “pure economics game” to limit nodes from doing evil. These means It also gives Rune a very high Token capture ability.
Of course, there are also many problems, such as being hacked twice, for example, a separate multi-chain wallet is required to use it, the depth of many assets is not enough, and the overall number of users is several orders of magnitude worse than Uniswap…
But in any case, Rune is the only seed on this track. The real competing product Chainflip has not been launched yet. In addition, Luna and UST have been connected to ThorSynths synthetic assets some time ago. In the second half of the year, there will be another one to complete the last link of the Rune ecosystem. Thorfi stablecoin, Rune is still a content that is worth looking forward to.
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Osmosis
If Rune is the Dex representative of aggregated heterogeneous chains, Osmosis is undoubtedly the Dex representative of aggregated isomorphic chains.
As the earliest and largest Dex Chain in the entire Cosmos ecosystem, Osmosis has attracted a lot of attention in the past few months.
In addition to being connected to various Cosmos SDK Chains that support IBC, Osmosis also has its own very unique innovations, such as Superfield staking, which releases the capital efficiency of ATOM, so that the ATOM part of the LP can directly participate in staking and get double benefits.
Osmosis will also be the first batch of Cosmos chains to support the Interchain Account not far from us. When the era of real IBC interoperability comes, I still look forward to it~
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Chainflip
Chainflip should be a direct competitor of Rune, and it is also a Dex Chain that focuses on aggregating multiple heterogeneous chains.
The difference is in a lot of details.
Rune is Cosmos SDK, Chainflip is Substrate (but people have no intention of connecting to Polkadot as a parachain);
Rune requires a separate multi-chain wallet, Chainflip does not , but it also requires you to have the kind of wallet you want to exchange assets;
All Rune LPs need to be paired with Rune as routing assets, but Chainflip does not.
Overall, I feel that if you are doing Swap between various EVM chains, Chainflip may have a better experience. If you need to exchange non-EVM chain assets such as BTC and LTC, Rune may be more suitable .
All have to wait for the line to see!
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Renlab
Ren also set his sights on cross-chain asset aggregation, so he established Renlab and created a product called Catalog.
However, the Catalog has not come out yet, but a Varen X will come out first.
Varen X experienced it and felt that it may be similar to Chainflip. It does not require a specific wallet. The target chain address can be used when Swap (naturally, you have to master the private key of this address).
And any asset supported by Ren can be used on it, but it may not feel the same as the pure native assets such as Rune and Chainflip. The bottom layer of Renlab seems to have native – Mint/Burn synthetic assets – and return to the original process (After all, synthetic assets were the main focus of Ren before) , but the whole process was black-boxed, so from the user’s point of view, the assets he exchanged were native, and there were no synthetic assets. I think this is why Ren named it Host to Host. .
The Catalog is also expected to be seen in the second half of the year, when the cross-chain Dex battle is imminent, remember to set up a small bench in advance to watch.
That’s all for the interoperability of assets. In the next episode of next week, let’s take a look at what the real “inter-chain interoperability” looks like.
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