Interoperability Insights
A review of important protocols to be aware of in regards to interoperability.
A wise man once said "It's all connected"...
Interoperability is a key puzzle piece of the blockchain. It helps solve the problem of assets and data interacting across multiple blockchains. Many overlook the beneficial factors and the potential of connectivity amongst all of these different networks. Blockchains have to communicate with each other for a vast majority of functions. There are various protocols that are contributing on different scales to help piece everything together and we will cover some of these throughout this review.
Cosmos
Most people think Cosmos is just a network when they should look at it as a toolbox for blockchain development. There are 3 core components to this toolbox which are Tendermint Core, Cosmos SDK, and Inter-Blockchain Communication (IBC) . Cosmos is definitely the most notable interoperability protocol I can think of at this moment. Their CEO's initial pitch was to be the "Internet of Blockchains" and they are achieving at doing so. They achieve this by making sure their tools and kits create scalable, decentralized, interoperable blockchains that can seamlessly communicate data all-together. They focus on making sure that these creation would be less complex and time-consuming to create as well. The beauty of this is that they can still maintain their governance in doing so and can participate in the governance of the corresponding blockchains and use its native token.
Over 20 blockchains have been built on Cosmos which constantly gets overlooked. Many are also connected to Cosmos like I mentioned earlier in some way or another. Popular blockchains like Terra was actually built on the Cosmos SDK and has enabled IBC which allows Terra users to trade their assets cross-chain with other IBC-enabled blockchains. Some other IBC-enabled blockchains include Near, Ethereum, Polkadot, Solana, and many more. These chains make up more than $60 billion in market cap combined. There is continuous growth and we will see more as builders keep building.
Polkadot
This chain is normally considered as a OG Interoperability Protocol by their introduction of Parachains so early in this space. Polkadot has had a lot of hype but struggled with the final rollout making it 100% usable. This has created a gap in time for protocols like Cosmos and Octopus Network to get a leg up and attract more builders in their direction. These Parachains essentially creates parallel chains that can process not just assets but data as well at very high speeds. The bonus of Parachains is that they can be configured for almost any use case. The downfall is that there are slots that teams have to lease while also meeting set requirements.
Therefore, they have to host auctions and crowd-loans which help incentivize protocols. They also have to lockup a specific amount of $DOT in doing so. Over time, I believe this could get clunky and projects may not want to hold auctions and undergo these procedures when they could just simply build somewhere else and make their time worth it. Polkadot is more security focused while Cosmos is more focused on mass adoption. These two are both major aspects so it still helps increase competition for that top spot.
Octopus Network
Built upon NEAR Protocol, my favorite underdog is currently Octopus Network. Octopus is an interoperable network for launching application-specific blockchains (appchains). This launched upon the arrival of "Web3.0". Their goal is to lower the barrier to entry for all innovators which is always a key value in technology. They also introduce the concept of infinite scalability, along with cost-effective security. This solves the blockchain trilemma as a whole! If executed correctly, I can see Octopus Network becoming a major player in this space. The best part is that this network also works alongside the Cosmos Hub making it able to be interoperable with any IBC-enabled blockchain as well. The options are also extended to any chain that can be bridged to NEAR. This will open the door for creators and builders to do what they do best on Octopus Network.
The ease of launching makes Octopus a no-brainer. Instead of having to hold slot auctions and lock up $DOT, builders can deploy projects much faster and cheaper. Their model is more cost effective than both Cosmos and Polkadot making their network very enticing to deploy on. This allows everyone to partake in building, not just the wealthy, prominent protocols. Octopus Network is creating a whole new innovation wave on Web3 which will open the door for the influx of people merging with it.
What about Avalanche?
I have noticed a lot of crypto twitter obsessed with Avalanche and their subnet ideas but I like to be realistic when comparing and contrasting anything in this space. Subnets sound like a great idea but the functionality of it isn't happening in the near future as of right now. They are currently not interoperable and the team has a lot to do before these cross-subnet transfers can be attainable. I fear that they may keep delaying a rollout similar to Polkadot, but I am bullish on the idea of subnets. I still don't agree that this will surpass Cosmos or Octopus Network in terms of interoperability.
"So far, the notion of chain interoperability has seen much theory and little practice" Vitalik Buterin
I would like to conclude by agreeing with Vitalik's quote. There is much speculation upon topics such as these but there isn't enough action being implemented behind it. Those who do so effectively will remain prominent and lead the way for the others to follow. Interoperability is one of the many futures of blockchain and I can't wait to see the creations that are birthed out of it.