Truly decentralized finance will not be possible with siloed Blockchains

Blockchain technology must embrace the old-fashioned quality interconnectivity to be the future lifeline for industries.
“Yahoo users won’t be able to communicate via mail with Google email users (Gmail)” — If tomorrow’s headlines were like this, the earth might come to an abrupt halt. This headline will never see the light of day for all the right reasons. But, blockchain tech and Decentralized Finance (DeFi), its favorite son, are heading down this rabbit hole. They are dominating the space. Interconnectivity is fundamental and is synonymous with primitive human qualities such as being social. Transfer and exchange have been the core practices of the world since the days of the barter system. Blockchain applications and the DeFi Juggernaut are a fragmented group of solutions that fail to realize their true potential. This concern must be addressed by blockchain networks. They need to make friends with other networks and open themselves up to the possibility of a sovereign network made up of interconnected blockchains. The Inter-Blockchain Communication protocol (IBC), will facilitate this exchange. It provides a platform that allows data to be transferred across networks and facilitates cross-chain transfers of tokens and assets. IBC is a protocol that can transfer data across different networks. It also facilitates cross-chain transfers of assets and tokens. This limits their capabilities. Imagine Bitcoin being able power Ethereum-based smart contract in a permissionless fashion. If this were possible, users would be able to enjoy the unlimited functionality of Ethereum’s smart contracts alongside the world’s most popular currency, Bitcoin (BTC).Related Article: Why Inter-Blockchain Communication is necessary for siloed Blockchains. Transactions can be done in parallel to avoid congestion by making networks interoperable. Using IBC, Ethereum can validate transactions quickly with fewer gas fees, attracting more people to use the network and its applications.Moreover, blockchains seeking to be enterprise-level solutions need IBC and interoperability to cater to their clients at scale. Cross-chain transactions can be made possible by networks like Ethereum and Bitcoin. How does it work? These networks are based on the probabilistic conduct and finality of transactions. But with IBC, chains and peg-zones can be used to guarantee finality.With blockchain tech desirous of revamping the working of huge industries like supply chain and healthcare, IBC injects a potion of reliability into the technology and its solutions.Prior efforts to achieve IBC were unitedly fragmentedInter-Blockchain Communication and interoperability are not novel concepts in the blockchain world. There have been many projects working towards interconnecting different blockchain networks for years. However, the projects that champion interconnectivity were themselves fragmented because their approaches, designs, and use cases varied.Protocols such as Cosmos with its Tendermint Core, Polkadot, and Chainlink have advocated IBC and interoperability. These solutions are a huge step towards interoperable technology. Exclusive networks are dangerous in a time of decentralization, community-first approaches, and other times when there is a lot to be done. Protocols must embrace IBC to provide solutions at scale. Future protocols can also equip themselves with blockchain agnostic or omnichain. This would eliminate the exclusivity element and allow them to access unlimited utilities across all networks. It would make it easier for corporations, governments, and institutions to adopt blockchain-based solutions. The DeFi juggernaut was instrumental in the growth of crypto and blockchain space in 2021. Interoperability is the key to the future. Sifchain is an omnichain solution for decentralized trading. Jared has extensive experience with crypto exchanges.

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