New hope for crypto interoperability

The pursuit of scalability is breaking the crypto sector into smaller and smaller pieces. In addition to new sidechains and layer 2 networks, some projects are now developing blockchains that are designed solely for one application. Because of this fragmentation, there could be millions of blockchains in the future – each with their own token, their own dApps, and their own liquidity.

The interaction therefore turns out to be particularly tedious for users. They want access to various applications that are based on various blockchains. But they usually only keep coins and tokens on one network. To get onto the chain they want, they need to access risky and costly bridges and purchase the respective gas token to pay transaction fees. The new technological approach of “chain abstraction” could help here.

Krypto’s usability problem

One of the first concepts for chain abstraction came from connected, an interoperability protocol. The idea behind the technology is simple: the front-end application should come to the fore, the blockchain-technical processes in the background. They are quasi “abstracted”. Instead, special smart contract modules in the back end handle bridging and exchanging tokens between networks, paying gas fees and signing transactions. Users no longer have to do these operations manually.

It becomes irrelevant to them which blockchain the desired liquidity pool or trading pair is on. The whole process takes place on a front-end platform. This removes one of the biggest barriers to entry for crypto adoption – the complex “user experience”. For developers of the crypto dApps, the integration of the smart contract modules should be made easier by means of special tool kits. You can use it to create crosschain apps, so-called xAppsdevelop.

Every asset, every chain, in one place

If you want to surf the Internet, you don’t have to be an expert in back-end software. Jumping from website to website is usually just a click away. The blockchain sector has so far lacked this simplicity. The abstraction of the technical processes should now enable new projects to unite the crypto sector. One of them is catalyst.

Catalyst is one of the first omni-chain DEXes designed to allow token exchange blockchain-independent. It follows the idea of ​​Thorchain, but builds on the increasing trend towards modularity in the blockchain sector. Modular blockchains are easier to customize and launch, and also integrate more easily into existing networks. This breaks down existing barriers between the chains. If successful, the project could form a universal “liquidity plane” for the crypto sector.

So while crypto users prefer some chains for their current scalability, their future compatibility and modularity could be even more important. Chain abstraction, along with cross-chain messaging protocols like LayerZero, is seen as a beacon of hope for the industry in this regard.