Post the introduction of blockchains, one thing that the community rejoiced was owning the rights to their assets. However, as time passed and the dust of FOMO settled, unequivocally an epiphany set in that blockchains are but beautiful islands with no means of accessing them easily as one complete ecosystem.
Transfer At Your Own Risk: Blockchain Bridge is Falling Down
When you speak of the narrative that 10% GDP on blockchain by this date or that date, at one end of the spectrum, it intrigues me. While, at the other end, I am amazed by the fragmentation blockchain has created, which makes this dream a chimera. For context, suppose, if you have a token on the Solana chain. Now, if you wish to transfer the same to the Ethereum or the Binance Network. What’s the best way out?
Everyone would weigh in favor of the bridges being treated as holy grail. However, they have ended up as necessary evil. And necessary evil does not help build up a next gen trustless, decentralized space. In such a case, we are simply drinking the same old wine from a new bottle because Chainlaysis, a crypto analysis firm report says that from 2021 onwards, the crypto space has lost more than $2 B to bridge attacks. All of that has happened because of smart-contracts compromise, bugs, and centralization of custodians. Now, the problem is that there’s no means to bridge different blockchains for interoperability sans bridges. And bridges are indeed falling down after looking at such data as mentioned above.
Into the Future: Beyond Bridges
The best thing about time is that it evolves and the crypto space has evolved beyond trust bridges post the introduction of Native Token Transfer. In the Native Token Transfer, the blockchains are absolutely sitting on the driver’s seat while transferring assets cross-chain. So, there’s no intermediary or a trusted authority controlling the asset transfer across multiple protocols. On the contrary, there are CCPT or Cross-Chain Transfer Protocol that relay messages in packets to cross-chains through market makers to execute orders.
So, if you are sending a message on the source chain about an event, the destination chain will receive the messages in packets through the source chain which will be remitted via the CCPTs to trigger an event. Now, the user on the destination chain will transfer the asset to the liquidity network that bridges all the blockchains through message packages and trigger an event chain on the destination chain through the network messaging. Now, the market makers on the destination chain will execute the event and the respective person will receive the asset they demand.
Such a practice will significantly improve the challenges that protocols face while communicating through bridges because bridge’s wrapped token execution functions are severely impacted by the volatility of the primary assets providing value to the wrapped tokens. So, if anything happens at the source of the custodian, be it an exchange or a smart-contract accepting the original tokens to mint the wrapped tokens, it significantly impacts the liquidity and the value of the wrapped token on the destination chain. CCPTs solve this problem because they create an event trigger and decentralized market makers act as the gateway to bridge different protocols.
Though one may say that it sounds more or less like the same wine in a new bottle, but there’s a difference, this wine is more decentralized and secure from its predecessors because there’s no token locks or liquidity fragmentation obstructing the value of the wrapped tokens, when used across different blockchains ecosystem.
The Way Forward………
We have to realize that blockchain technology was conceptualized with the idea to decouple ownership and centralization. However, if you continue serving the same old wine with a new narrative in a new bottle, at one point or the other, we might see the problem of adulteration. The same is going along with bridges and there’s the need for a new way forward. CCTPs have envisioned Native Token Transfers across blockchains which can undoubtedly help blockchains gain mainstream adoption until we again see a new bug in the making like that of the bridges.
Our innovative approach to Cross-Chain Token Protocols (CCTPs) can play a pivotal role in overcoming the challenges of blockchain adulteration and interoperability. For further assistance, contact us directly to know more and explore our innovative digital solutions to read more such blogs.
