Three stages of crypto industry development

Stage 1: Bitcoin The birth of the Bitcoin peer-to-peer e-cash payment system created the crypto industry and stimulated the development of centralized exchanges (CEXs) since 2009.

Stage 2: Ethereum The emergence of the programmable smart contract of Ethereum boosted the development of public chains and decentralized applications (Dapps) since 2015.

Stage 3: Multi-chain - Call for cross-chain Although cross-chain infrastructure competition is neck and neck, cross-chain infrastructure makes cross-chain dapps possible and significantly boosts development.

Cross-chain field

Let’s start by explaining what blockchain and cross-chain are. Blockchain is a network in which one block of transactions sequentially follows another and the network is supported by miners/nodes. The first blockchain is the Bitcoin blockchain, since its launch many other blockchains have been created. An important milestone in the development of blockchain technology was the launch of the Ethereum network with the support for smart contracts. Ethereum dominated the market, Dapps started to deploy on Ethereum. After Ethereum, more public chains were launched to challenge Ethereum, and Dapps started to explore possibilities on different chains. Nowadays, Dapps are deployed on multiple chains and as a result, users also own digital assets on multiple chains, and they are desperately in need of a secure and efficient cross-chain solution. Not just a bridge, but a cross-chain interoperability protocol as a solution.

Existing problems - Centralization

  • CEXs

  • Centralized

  • Non-interoperable

Existing cross-chain solutions in the crypto industry

The solution to the problem of blockchains interoperability can be the very factor to ensure world recognition of blockchain technology and all its derivatives, primarily, cryptocurrencies. Having a cross-chain protocol in place gives projects freedom of choice and opens up fair competition: if one network is cheaper or faster than the other one, assets can move freely. This will mean, neither more nor less, a new economic era, which will be determined by genuine economic freedom and the broadest financial and working opportunities.

Solutions without a Relay Chain

  • Cross-chain bridge dapps with MPC super administrator

  • Oracle verification mechanism with ambiguity and collusion risk

  • The transitional solution in MPC with PoS. (Slightly better than pure MPC)

  • Optimistic roll-up with long verification waiting time

  • Light-client verification mechanism with ultra-high gas fees during cross-chain among heterogeneous chains

Polkadot & Cosmos Solution

  • It is difficult for the EVM and other heterogeneous chains to connect the cross-chain network through SDK.

  • The relay chain is dedicated to blockchain mainnet developers instead of cross-chain dapp developers.

  • Although Thorchain and Terra are Cosmos’s ecosystem chains, the cross-chain mechanism of Thorchain is still MPC, and dapps developed on Terra are mostly mono-chain dapps.

  • Polkadot has not yet developed any cross-chain applications.

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