Blockchain interoperability

Blockchain Interoperability:

Source

In a blockchain, there is usually a bridge between two different blockchain networks which is what Interoperability means. Just as we all speak different languages, use a different currency, and have separate culture rules and protocols it is the same way that blockchain has. For example, people from one island cannot trade, communicate, or share common resources if there is no bridge on the island.

Blockchain Interoperability creates the bridge between networks of a blockchain, allowing them to communicate and exchange information smoothly, without needing the support of third parties. This simply means that tokens, data, and smart contracts can flow freely from one blockchain network to another blockchain network increasing the overall efficiency, flexibility, and potential of a blockchain network. What blockchain Interoperability does is transform a network that is isolated into a connected ecosystem, enabling them to work together towards achieving a shared goal.

Types of Blockchain Interoperability Solutions:

There are several types of blockchain Interoperability solutions and the best way that we can take a look at this is by looking at the well-known cross-chain interaction.

• Token Swaps:
  This involves trading a token on a source chain and receiving a different token on a destination chain. Token Swaps that are cross-chain are mostly made possible by atomic swap protocols and or cross-chain automated market makers that have separate liquidity pools to facilitate the swapping of one token for another.

• Token bridges:
  This involves the locking or burning of tokens via smart contracts on a source and unlocking or mining tokens through a separate smart contract on the destination chain. This allows assets, to move freely across the blockchain networks increasing token utility by making cross-chain liquidity possible.

• Native payments:
  This involves the use of an application on the source chain triggering a payment on a destination chain in its native asset. Cross-chain payments can also be made on the source chain in its native token based on data obtained from a separate blockchain.

Other types of blockchain Interoperability solutions are Contract calls which involve the use of smart contact on a source chain and Programmable token bridges which involve a combination of token bridging and arbitrary messaging.

My Research for this post was obtained from Here

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