Interoperability must be a priority to build Web3 in 2022

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This article was contributed by Sergey Gorbunov, co-founder of Axelar.

Currently, most of us are reading articles, communicating with friends, working with colleagues, and making purchases using applications built on top of Web2 infrastructure. This basically means that the technology that underpins our society and economy – the current version of the Internet – is centralized: controlled and owned by centrally operated systems. . This comes with a number of limitations, including vulnerabilities to hacking and corruption, lack of data protection, and proprietary ownership of Big Tech’s data, connectivity, and other internet services.

In 2021, the mainstream tech industry begins to acknowledge the huge potential of Web3. A decentralized online ecosystem, Web3 will undo the current architecture of the internet and replace it with infrastructure based on blockchain technology. This means decentralized ownership, protection from bad actors, peer-to-peer exchange of data and assets without intermediaries, and information with guaranteed verifiable sources. Fundamentally, Web3 will change the way we run our societies, businesses, and financial systems for the better.

Web3’s fundamental design pioneers are already in the works: Ethereum, Terra, Avalanche, Polkadot, Cosmos and many others. Each of these is a unique blockchain protocol, because it sits at the bottom layer of Web3 and supports the next generation of the digital world. A prominent vision for Web3 is that the technology stack will be open source – meaning the code will be available to everyone and everyone to read, build, and improve on, creating a better end-user experience.

On each of these blockchain networks, there are already direct decentralized applications (dapps) that allow us to communicate, trade assets, share stories and transfer data, helping us get started on the move to Web3. But despite the progress, these blockchain networks unfortunately stuck together. They function like independent cities – all hubs of economic activity and business opportunity – but without the highway infrastructure to connect them and make them part of a single nation. powerful, diverse but unified family. There is an urgent need for a seamless, universal, and decentralized method of sharing information and assets between blockchain ecosystems. If this is not achieved, the liquidity of digital assets will remain low due to poor development paths. This is one of the problems in the blockchain space due to the lack of interoperability and cross-chain communication. Ultimately, if these problems are not solved, the world will never move from Web2 to Web3.

Overcoming challenges

Acknowledging the problems caused by the difficult nature of the industry, individual blockchain protocols are spending too much time building their own bridges to allow users to share assets and data from the exchange. one protocol to another. So many decentralized finance (DeFi) dapps run on Ethereum that bridges have been built one by one between it and Terra, Avalanche, Binance Smart Chain, and many others, over the years. These bridges take a lot of time, money, and resources to build, are challenging to maintain, and still don’t offer a clear path to sending anything but specific assets directly. between two smaller chains in the ecosystem.

In addition to being time-consuming to build, one-off bridges are often highly centralized, acting as an intermediary between protocols. Built, owned and operated by a single entity, these bridges become the bottleneck between different ecosystems. The controlling entity decides which tokens to support and which new networks to connect to. This single centralized point of failure leaves them vulnerable to security threats and/or corruption, and ultimately poses the same risks as leaving assets or personal data to any intermediaries. any other concentration in traditional industries.

Another effect of the stupid nature of the blockchain space is that developers are forced to choose between blockchain protocols and end up building dapps that can only be used on one network and not others. . This greatly reduces the potential user base of any solution and prevents dapps from reaching mass adoption. Developers must then dedicate resources to deploying their applications across multiple networks, in many ways to fragment their liquidity across applications dedicated to their networks.

Towards an Interoperable Web3 Future

From these struggles and spending time and money, we know that a more universal solution for interoperability is the only way forward. Our industry, perhaps the most innovative in the world today and assembled by the most talented minds, must prioritize the principles of universality, decentralization, security, and scalability. access when it comes to interoperability. Only by doing this can we solve the problems that are causing our projects and users today.

To create such powerful connectivity and develop open protocols that create standardized pathways, industry collaboration is essential. The idea that protocols compete with each other is outdated. While protocols will continue to evolve individually for specific use cases, they cannot hope to fully scale without interoperability. Compare these protocols again with unique cities, they operate independently of each other, but to thrive must allow communication, commerce, commerce, and travel to and from each other. nearby locations.

Today, we may not always realize it, but much of the conversation we have about blockchain is completely focused on infrastructure and interoperability. Achieving interoperability in its truest form will allow end users and developers to seamlessly work and build efficiently across multiple blockchain platforms without knowing it. We don’t think about basic workplace protocols when we send emails or text messages, or even when we hold video calls. This is what we must strive to make the Web3 we all envision.

Interoperability is now at the heart of many protocols, which are coming to the realization that cross-chain communication will protect their stake in the future of the blockchain, rather than diminish their advantage. Implementing cross-chain communication means empowering developers to build on a network that best suits their needs knowing that their applications will be accessible to users across platforms other blockchains. This allows blockchain networks to continue to improve the applications they provide and their own infrastructure, rather than investing countless hours and huge amounts of money in building individual bridges.

In 2021, we have seen seeding in the minds of retail consumers, large businesses, traditional financial institutions, national governments and regulators, all of which recognize that blockchain and digital assets will be an important aspect of our future society. We have seen mainstream traction on the NFT; Explore the big tech of the metaverse; proofs of concept banking around stablecoins and Central Bank Digital Currencies (CBDCs); and new regulatory hearings on impact of cryptocurrencies across different economic sectors.

Now, 2022 offers us a unique opportunity to capitalize on what we’ve already achieved and make our underlying technology increasingly scalable and efficient. We must keep the big picture front and center in everything we do, not only asking ourselves what is best for an individual blockchain protocol, but also how can we develop and scale your entire industry in a decentralized and secure way. Interoperability is at the heart of Web3 and should be a priority for next year.

Sergey Gorbunov is the co-founder of Axelar.

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