A fresh start: reconsidering interoperability

Imagine this: you’re on the verge of depositing your hard-earned savings at a new bank. Yet, as you’re filling out the paperwork, you stumble upon a news article detailing a massive $624 million theft due to a catastrophic breach in the bank’s computer system.

Feeling a bit uneasy, you start exploring other banks as a safer option, but it’s not as simple as it seems. Distinguishing between each bank’s backend systems is a challenge, and thefts are alarmingly common. In fact, a whopping $2.9 billion was stolen from banks due to similar backend system vulnerabilities between 2021 and 2023 alone.

Understandably, you might be feeling cautious about your next steps!

As surprising as it may sound, the above is not referring to traditional banks but rather cross-chain bridges.

We’ve witnessed breaches triggered by a variety of factors—from unforeseen complications due to overly complex designs to sneaky loopholes and outright deceit. What ties these incidents together is the severe impact on users relying on cross-chain solutions and the tarnishing of blockchain’s reputation as a whole.

Looking beyond the alarming news headlines reveals a crucial truth: cross-chain infrastructure serves as the backbone of the blockchain industry. As long as you believe in the transformative potential of blockchain technology and champion mainstream adoption, cross-chain solutions are here to stay. Let’s take an open and candid look at the current landscape of blockchain interoperability.

For those unfamiliar, blockchain interoperability holds the key to bridging the fragmented and isolated nature of various blockchains. Since blockchains operate as trustless systems, they lack the ability to communicate with one another without external aid. This is where cross-chain solutions step in. These solutions facilitate the seamless transfer of data from one blockchain to another. For users of dApps and DeFi protocols, embracing cross-chain solutions is almost essential, especially since many innovative projects are emerging outside of the Ethereum L1 blockchain.

At present, blockchain interoperability stands as a fractured landscape of conflicting standards. Numerous competing interoperability projects strive for supremacy, offering custom cross-chain solutions with varying levels of security and credibility. This diversity only serves to complicate the blockchain ecosystem without providing any tangible benefits. The lack of compatibility among different cross-chain solutions presents a major challenge for users, businesses, and regulators in assessing security measures, ultimately hindering the widespread adoption of blockchain technology.

The remedy? A unified framework for interoperability.

Blockchain interoperability cannot be the sole responsibility of a single project; it requires a collaborative, industry-wide initiative. Instead of operating in silos, it’s imperative that we come together to establish clear guidelines for transmitting, receiving, and verifying data across different blockchains.

Although some may raise objections, adopting a shared framework for interoperability does not threaten the existing business models of interoperability projects. Rather, it lays the groundwork for a secure foundation of core infrastructure that allows projects to develop unique products catering to diverse use cases. This distinction is vital.

Reflecting back on the earlier scenario, the traditional finance sector has thrived on the foundation of secure, shared infrastructure, with thousands of banks building loyal customer bases. Similarly, web2 businesses globally rely on the Internet protocol suite, a communal framework enabling seamless data communication among different network devices online. Embracing a shared framework for interoperability—one that clearly defines architectural principles and interface specifications—is the logical way forward. Blockchain interoperability must prioritize core infrastructure over individual products.

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