Ethereum, Bitcoin, Binance Smart Chain, Polygon, Cosmos, Polkadot, Optimism… the list goes on.
As more blockchains are being created with a multitude of decentralized applications (dApps) being built and used on each one of them, the conversation around the need for an interoperable future has never been more important. There have been many discussions about the opportunities that a “multi-chain future” will bring. But how useful would it really be to have multiple ecosystems operating in silos? This is where cross-chain communication and bridges come in. Blockchain oracles are vital in enabling cross chain communication and the interoperability of smart contracts across different blockchain environments as they are responsible for ensuring that data from one chain is available on another chain in an accurate, secure and timely fashion.
In this panel, our speakers share their own experiences with cross-chain bridges and delve into the complexities that come with interoperability, as well as the role that oracles will play in a multi-chain future.
Before diving into the panel above, here are some important concepts to take note of.
Cross-chain bridges & Interoperability:
Cross-chain bridges enable the transfer of data and digital assets across different blockchains, thus facilitating a more interconnected and interoperable Web3 ecosystem. Interoperability ensures that users are able to interact with dApps on different platforms and transfer funds across blockchains with greater ease while enjoying reduced fees. For example, Alice has a Polygon wallet and wants to pay her friend, Ben, who only has a Bitcoin wallet. Both wallets will not be compatible with each other unless there is a bridge connecting them. Some examples of cross-chain bridges include Wormhole, Relay and pNetwork.
Unlike monolithic blockchains like Bitcoin, that require all nodes and validators to execute the same transactions, modular blockchains separate the main functions of a blockchain into different layers. These layers are – the consensus layer, data availability layer and the execution layer. These layers are independent of each other and help to ensure the continued scalability of the network as more users and applications enter the ecosystem. This medium post goes into more detail about how modular blockchains can improve network scalability.
EVM Compatible Blockchains
Ethereum Virtual Machine or EVM compatibility refers to smart contracts that can be easily migrated from Ethereum to other EVM compatible blockchains, and vice versa. Some examples of EVM compatible blockchains include Binance Smart Chain, Polygon and Avalanche.
Soulbound non-fungible tokens (NFTs) are essentially non-transferable tokens. This means that these tokens can never be sold or transferred from one wallet to another. Due to this characteristic, soulbound NFTs can be used as permanent digital identities for Web3 participants. Another exciting use case would be for reputation. In a decentralized world, it can be difficult to know for sure if an individual or project can be trusted. With soulbound reputation, anyone in the ecosystem would be able to make a fully informed decision before participating in communities or transactions with others based on their reputation. This post by Vitalik Buterin explains full details of the origin of the term “Soulbound” and its applications.
Layer 0, Layer 1 & Layer 2 Networks
Layer 0 (L0) blockchains refer to the underlying infrastructure of a blockchain network. They are made up of software development kits (SDKs), and communication protocols that support the operation of the blockchain. It is the foundation upon which layer 1 blockchains are built. Examples of L0s include Cosmos and Polkadot.
Layer 1s (L1s) refer to the core protocol or set of rules that govern the operation of a blockchain network. This includes the consensus algorithm that is used to validate and record transactions, as well as any other protocols or standards that are necessary for the proper functioning of the network. Layer 1 blockchains are built on top of the underlying infrastructure (layer 0) of the blockchain. Examples of Layer 1 blockchains are Bitcoin and Ethereum.
Layer 2 (L2) blockchains are secondary networks that are built on top of underlying layer 1 protocols. Some examples of layer 2 blockchains include the Lightning Network, which is built on top of Bitcoin, and Metis, which is built on top of Ethereum. These layer 2 networks help to ease congestion on the L1s they are built on, thus improving the efficiency and overall scalability of the system.
A more detailed explanation of layer 1s and layer 2s can be found in this article by our media partner The Defiant.
Thomas Bertani, Project Lead, pNetwork
Thomas Bertani is the founder of Provable Things and project lead at pNetwork. Provable Things, formerly known as Oraclize, is the longest serving oracle service for smart contracts and blockchain applications. pNetwork is a multi-chain routing protocol, with a focus on DeFi, NFT and gaming. It enables the transfer of assets into over 10 supported blockchains, including Bitcoin, Ethereum, Algorand and many more.
Barney Mannerings, Founder, Vega Protocol
Barney Mannerings is the founder, lead architect and designer of Vega Protocol. Vega Protocol is a purpose-built Layer-1 blockchain built on top of Tendermint. It was designed specifically with trading in mind. As such, it contains features such as having no fees on orders and fast trading.
Pavel Sinelnikov, Ex-Integration Lead, Metis (now Co-founder/CEO of KORIS)
At the time of recording, Pavel Sinelnikov worked as the Integration Lead at Metis, working with projects at all stages of development for deployment onto the Metis ecosystem. Metis is an Ethereum Layer 2 Rollup platform which was created to provide more scalability, security and speed to both users and developers.
Yanislav Malahov, Founder, Aeternity
Yanislav is the Founder of Aeternity. Aeternity is a blockchain protocol and smart contract platform with built-in features such as state channels for smart contracts, a human-readable naming system, as well as built-in oracles.