What are the current issues in interoperability? What does Cycle do differently?

As we all know there are too many projects in the blockchain industry competing for the same number of users whilst developers have to re-create the same code over and over again. This is where interoperability comes in.

Interoperability in the context of blockchains refers to a blockchain’s capacity to freely exchange data with other blockchains. For example, on a given blockchain, every asset that is owned and every transaction that is made are documented. Whatever economic activity takes place on one blockchain can be represented on another blockchain with the right interoperability solution.

However, there have been many new attempts to define interoperability, such as from academic researchers: Hardjono (2021) and Belchior (2020), where interoperability is seen as the most important issue in blockchain with their conclusion deeming interoperability as important for its “survivability”, where the whole intrinsic value of every blockchain’s ecosystem depends on its interoperability with other eco-systems.

How current projects try to solve interoperability

Right now many mainstream projects (Polkadot, Multichain, etc) are trying to solve the issue of interoperability through various means such as:

Sidechain/Relay:

A secondary blockchain is created linking both the parent chain and the sidechain. This allows assets locked on one chain to be shown the equivalent asset on the sidechain. If it connects to multiple parent chains, it can be defined as a relay. However, if one sidechain is too popular, it may lead to congestion and high gas fees, furthermore, every sidechain that operates independently may have different rules or protocols hindering the transfer of assets and possibly leading to security issues.

Notary Schemes:

Here a 3rd party acts as a validator, with cross-chain information being executed by the consent of the majority of the validators in the DeFi eco-system. However there is a risk that the validators may collude or act within their self-interest, therefore it is not fully decentralized.

Distributed private key control:

As private keys are now distributed amongst the nodes or held by various owners, therefore even if one private key attack is successful, other private keys remain safe and are not compromised. However, development is difficult due to wait times for the confirmation of the original chain and adopting the characteristics of the original chain.

As you can see each of these methods has its weaknesses such as the lack of full decentralization, the risk of security issues, or the difficulty in implementation. And this explains why many users are only at the “Web2.5” stage.

What Cycle Network does different

At Cycle, we have created a different method for solving interoperability.

We have created the Omni Decentralized Ledger (ODL), where developers can create their dApps on a new layer without having to re-create the code on different chains. Through Abstract Account, users will no longer have to use their private keys or seeds in order to use the DApp, therefore decreasing the number of gas fees involved. Furthermore, this new layer will adopt the same security as Rollup technology allowing users to feel safe in cross-chain asset transfer.

Through Cycle, we users can have an easier experience and enjoy Web3 more seamlessly than where we are now. This single issue of interoperability will allow every project to connect to each other and unlock the potential of blockchain technology. We hope during this bull market through ODL, more users from Web2.5 will fully immerse themselves in Web3!

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