Is the future of blockchain interoperable? The prevailing headwinds say yes. In recent years, the cryptocurrency industry has gradually transitioned from siloed individual networks to a vast interconnected ecosystem, enabling users to transfer value more freely.
Chain Reaction
From cross-chain DEX aggregators to wrapped assets (wBTC, etc) via interoperable NFT marketplaces and bridging solutions, the evolution of the multi-chain environment is a sight to behold. While this multi-year pivot reflects a shared vision among developers of an interoperable future, it is also a necessity: the number of defi projects building on Ethereum, for example, has caused eye-watering gas fees and constant congestion, leading to the emergence of layer-two solutions (Polygon, Arbitrum, etc) that lighten the load.
The desire of token-holders to leverage certain coins on dApps native to other networks, meanwhile, has given rise to cross-chain wrapped assets – mostly wBTC and wETH. In essence, these synthetics represent tokenized versions of bitcoin and ether pegged to the value of the original. Just as stablecoins like USDT and USDC allow users to essentially ‘wrap’ the dollar for use in decentralised finance, wrapped crypto allows coins that live on one chain to be used on another.
By enabling better communication between disparate blockchain networks, as well as their tight-knit developer communities and token-holders, the overall crypto ecosystem is becoming more cohesive and attractive to mainstream users: barriers to entry are falling and the complexity of swapping in and out of assets and connecting various different Web3 wallets is being planed away. In recent months, multi-chain bridge protocols have recorded all-time high volumes as users take advantage of low-cost value transfers between over a dozen different networks.
The Cambrian explosion of lending, savings and trading protocols during the so-called Defi Summer of 2020 gave rise to the first wave of functional cross-chain solutions, though the pace has certainly accelerated since NFTs captured the public’s imagination the following year. Although non-fungible tokens representing artwork, virtual land and commodities for use in gamefi are usually minted on – you guessed it – Ethereum, emerging multi-chain marketplaces are giving NFTs cross-chain capabilities. Thus, users can buy and sell NFTs using a range of cryptocurrencies or mint their own NFTs on alternate networks.
NFTs are already hot commodities, having generated sales worth $24.9 billion during 2021. If such growth is to continue, though, the industry cannot rely on Ethereum. Users should be able to mint and trade tokens on the blockchain of their choice, and to seamlessly exchange and use their NFTs in different ecosystems and metaverses. No-one wants to be locked into one network, one play-to-earn game or one currency.
A Cross-Chain Future
One project with interoperability at its heart is Spherium. Not only has the startup developed a cross-chain bridge, but its incubation program HyperLaunch facilitates the seamless entry of innovative blockchain projects into the cross-chain ecosystem. Spherium also has its own cross-chain DEX, which supports trading among tokens between EVM and Non-EVM compatible chains.
To date, Spherium has partnered with leading NFT, DeFi, P2E, and general blockchain projects. The alliance seeks to “expand the multi-chain experience for creators and buyers to bridge major blockchains and add certain defi functionalities into their platform.”
Through HyperLaunch, Spherium offers projects the opportunity to integrate a bridge solution into their core functionality and enable the deployment of their native tokens on different networks. With the audited Spherium bridge, token swaps can take less than one minute currently and is free to use for projects in the HyperLaunch program.
Geared towards defi, NFT and meta-world platforms, the incubation program offers more than just bridge access; staking and dual-farming solutions are also provided, along with extensive technical support. As if that wasn’t enough, Spherium has announced that it is preparing to create a community-driven cross-chain DAO for the sole purpose of funding relief for world peace.
Spherium and other defi-centric projects acknowledge that when it comes down to it, users want the same things: fast execution speed, low fees, cross-chain liquidity, transparency and security. Embracing a frictionless model is thus becoming inevitable for projects that want to meet user expectations.
It will be fascinating to track the evolution of blockchain in the months and years to come. As ever, projects that steadfastly refuse to move with the times risk obsolescence as the multi-chain ecosystem continues its inexorable expansion.