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- Vitalik Buterin critizes that we still can’t easily transfer assets between the two biggest blockchains, Bitcoin and Ethereum.
- Hybrix is a newcomer on the crypto-market that has big potential, according to experts of the crypto space.
Blockchain interoperability is one of the most significant focus areas for developers in 2020. Since Bitcoin and later Ethereum emerged, dozens, if not hundreds of blockchain platforms have sprung up around them. Many of these offer similar or even complementary use cases to their predecessors. However, until now, blockchains have generally operated within walled gardens. Now, there’s finally a recognition that the lack of interoperability is hampering the development of the overall ecosystem.
For example, consider the idea of cryptocurrencies replacing fiat currencies. Imagine if, rather than having to go to a money changer or an exchange, you could simply swap one currency for another via a user-friendly interface that didn’t involve using a third party?
Or consider that currently, the vast potential of the DeFi ecosystem is tied inextricably to Ethereum. This dependency prevents DeFi developers from accessing the speed and scalability offered by other blockchain platforms without excluding the large DeFi community already attached to Ethereum.
Even Vitalik Buterin recognizes the need for interoperability, calling it “embarrassing” that we still can’t easily transfer assets between the two biggest blockchains.
Even on the enterprise side, it’s known to be a problem. Earlier this year, the World Economic Forum weighed in on the argument with a white paper written in collaboration with Deloitte. The paper cites the global coronavirus pandemic as exposing the weaknesses in global supply chains and points to interoperable blockchain systems as the answer.
Unlocking value across multiple blockchains
Blockchain interoperability isn’t an issue that’s only just come to the fore. As far back as 2017, some forward-looking developers saw the opportunities afforded by interoperability. Hybrix was crowdfunded three years ago and developed as a blockchain-agnostic cryptocurrency wallet.
The core of this project now forms the basis of Hybrix – a second layer with capabilities of connecting to multiple blockchains. At the time of writing, Hybrix supports 31 separate platforms with over 400 tokens integrated.
The Hybrix Protocol utilizes the data layer of the connected blockchain to enable transactions to take place across different chains. Within each block of a blockchain, there is a section for transactions and another section for data. Hybrix uses the data section on the block to add an attachment with a representation of the token value and a computational proof of its chronological order.
That means that all of the transactions, even those taking place across multiple chains, become entwined. It’s possible to follow the path of any token movement between chains by following this data path. Because data is aligned across the different chains, there’s no risk of forking, and no atomic swap is needed.
Hybrix was conceived as a means of enabling the seamless transfer of value across different blockchains in a way that stays true to the original principles of cryptocurrency and blockchains – privacy, trustlessness, and open-source development. The founder of the project, Joachim de Koning, was an early adopter of Bitcoin and Litecoin. As such, he holds strong beliefs that freedom and privacy are fundamental to personal finance.
Hybrix operates on three levels, multi-ledger platform layer for developers, cross-chain value transfer for businesses, and dApps for consumers. Unlike comparable platforms such as Polkadot that are still under development, Hybrix is already live and operational across different assets and tokens.
Bringing interoperability to DeFi
Hybrix isn’t the only project targeting interoperability – in fact, there are several other platforms. However, in terms of bringing some of the features and applications of Ethereum to multiple blockchains, Kava is one that shows a lot of initial promise.
Maker has become the most successful project in DeFi, accounting for approximately half of the overall ETH staked, according to DeFi Pulse. Kava aims to replicate the functionality and success of Maker – however, in a way that’s blockchain agnostic. Currently, users can stake a variety of tokens, including BTC, XRP, ATOM, and BNB, to create collateralized debt positions against Kava’s stablecoin, USDX.
The project is one of the few to be selected for token sales on the Binance Launchpad platform, which successfully concluded in October 2019. Recently, venture fund Framework Ventures invested $750k in the project by buying tokens without taking a share of the equity.
The only way that the blockchain ecosystem can genuinely thrive is if it sticks to its original principles – openness, inclusivity, and trustlessness. Now that there are so many projects out there, these principles become lost without true interoperability and tribalism starts to rule. As we move closer to a fully connected blockchain ecosystem, the industry can once again return to the principles it holds dear and become greater than the sum of its parts.
