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Blockchains are not merely storage and communication protocols. Each of them has a history, community and culture worth protecting.
Some communities are more focused on creating “sound money” alternatives to current fiat systems. Others are working hard to maximize raw computing power or storage capacity. Some blockchains allow users to collect basketball shots and other sports moments. Others are emerging as metaverses for developing a particular cultural or gaming culture.
We need to nurture spaces for these communities to grow and innovate. Like borders, languages and currencies, blockchain designs allow cultural particularities to thrive instead of being absorbed by the more powerful neighbor.
We need to promote diversity. And, just like in the real world, we must also encourage dialogue between communities. We must invest in bridges that allow blockchain ecosystems to communicate, as long as these bridges emerge organically to serve the needs of their users, rather than top-down as a result of government-sponsored standards.
Interoperability holds the key to a multichain world
Blockchain interoperability is not a set rule book. It refers to a broad range of techniques that allow different blockchains to listen to each other, transfer digital assets and data between one another and enable better collaboration. There are decentralized cross-chain bridges that facilitate the transfer of data and assets between Ethereum, Bitcoin, EOS, Binance Smart Chain, Litecoin and other blockchains.
Currently, the main use cases of interoperability are: first, the transmission of a given cryptocurrency’s liquidity from one blockchain to another. Second, allowing users to trade an asset on one chain for another asset on another chain. Third, enabling users to borrow assets on one chain by posting tokens or NFTs as collateral on another chain.
Each bridging technique makes its own design compromises in terms of convenience, speed, security and trust assumptions. Each blockchain operates on different sets of rules and bridges serve as a neutral zone where users can switch between one and the other. It greatly enhances the experience for users.
For end-users, these trade-offs may not be easy to understand. Furthermore, the risks associated with each bridge technique may compound each other whenever an asset crosses several bridges to reach the hands of the end-user.
Call to action
As members of the Web3 ecosystem, we share a responsibility not just to promote a multichain world, but also to make it safer as more users begin to enter Web3.
Everyone has a role to play. Cross-chain bridges must be transparent about risks and resist the temptation of growth at all costs; they must also publish bug bounties. Security researchers and analytics platforms should publish public risk ratings and report incidents. Blockchain protocols and wallet operators should agree on lists of cryptocurrencies and smart contracts officially supported on each chain. Dapp developers should aim to deliver simple user experiences without throwing away the core tenets of decentralization and user ownership. And media outlets and key opinion leaders must help end-users to “do their own research.”
We must move away from “winner takes all dynamics” and offer a better future to user and developer communities. The Web3 movement gained traction because we wanted — and still want — to move away from the shackles of centralization. The seamless flow of information and tokens between different blockchains will be a major push towards a truly decentralized, multichain economy.
Ken Timsit is the managing director of Cronos.