Solving The Blockchain Interoperability Dilemma

Blockchain interoperability is the key to unlocking the potential of Web3.

The Web3 vision is a future where all data is decentralized, and the internet becomes a fully distributed system.
Blockchain interoperability is the key to unlocking the potential of Web3. Interoperability allows different blockchain protocols to communicate with each other, paving the way for an ecosystem of decentralized applications (dApps) that can share data and interact with one another. It will make it easier for people to use different blockchain networks and streamline the process for developers to build on these networks.

Blockchain games, decentralized finance (DeFi), and the crypto ecosystem, in general, are all growing at a furious rate. However, the lack of interoperability between blockchains has been a significant issue industry0wide. Even though the blockchain ecosystem currently sports an aggregate capitalization of more than $2 trillion, it is highly fragmented as dApps, NFTs, and DeFi products remain scattered across different blockchain networks.


Many projects are working to address this problem by providing open-source frameworks designed to help developers construct cross-blockchain applications and smart contracts. In the meantime, the increasing adoption of blockchain has accelerated the demand for dApps to deliver a fast and frictionless user experience in the expanding digital economy. 

The future is multi-chain, and to reach this plateau, the blockchain ecosystem needs high levels of interoperability. Moreover, blockchain interoperability will make Web3 adoption more feasible by bridging the entire ecosystem, thereby removing the complexities of using blockchain (wallets, switching networks, and such). 

So what’s the best way to achieve interoperability?

In the simplest terms, blockchain interoperability means the ability to share, view, and access information (data) across different blockchain networks. For instance, person A sends some data to person B, who is on a different blockchain. In this case, the process should be simple enough for A and equally simple enough for B to understand and react without any extra effort.


Since most blockchains are siloed off from one another, they are unable to communicate directly. This means that one chain can’t directly benefit from the strengths of another chain and vice versa. As a result, these fragmented networks are limiting the true potential and value of the blockchain ecosystem, further hindering adoption and eroding user experience.

Public blockchain networks, especially Ethereum, the de facto home for DeFi, NFTs, and blockchain games, too, are focusing on interoperability and scalability. In recent years, the influx of hundreds of new projects on Ethereum has clogged the network, limiting its throughput and simultaneously increasing the network’s fees. 

Blockchain interoperability is a critical challenge that needs to be addressed. Taking the cue, blockchain platforms like Cosmos and Polkadot have rolled out a novel solution called Inter-Blockchain Communication Protocol (IBC). 

IBC: A New Force In The Blockchain Interoperability Race?

Since its launch in March 2021, IBC has been considered a key catalyst for the forthcoming “Internet of Blockchains” reality being pursued industrywide. IBC unlocks the ability to exchange value and data across compatible chains with a fully open-source protocol that can relay messages (value and information) between standalone distributed ledgers, thereby seamlessly linking one blockchain to another. Due to the interoperability offered by IBC, users can directly transact one chain’s token for another in real-time and securely, without engaging the services of a third party. 

Peng Zhong, CEO of Tendermint and a core contributor to the Cosmos ecosystem, explains the concept of IBC with a simple-to-understand analogy. He notes, “Imagine every blockchain right now as a small tribe living on an island in a vast archipelago. So what IBC enables is the discovery of shipbuilding, which allows these tribes to travel between each other. So it’s really big, it’s huge for community building… the moment a blockchain flips IBC on, people can start traveling back and forth and participate in cross-island trade of various goods that each island is specialized in creating.”

Simply put, IBC opens up an entirely new world of possibility allowing blockchains to exchange value, assets, and communicate directly with one another without running into the scaling issues – something pretty common across today’s largest blockchain networks. Any application can use IBC as long as it is built on reliable and secure inter-module communication. 

Applications include cross-chain asset transfers, atomic swaps, multi-chain smart contracts (with or without mutually comprehensible Virtual Machines), decentralized oracles, and various kinds of data and code sharding.

The Icing On The Cake

Currently, Ethereum can’t scale enough to meet the growing number of dApps on its network. Fortunately, solutions like Polygon. Optimism, and Arbitrum have emerged, offering support for cross-chain transactions and full Ethereum Virtual Machine (EVM) compatibility. 

EVM compatibility is critical for interoperability (and scalability), as it enables developers to easily migrate dApps without needing to rewrite the entire code from scratch.

Now, imagine a solution that combines the best features of IBC and EVM compatibility.

Although it sounds too good to be true, has introduced a novel solution, Cronos, built on the Cosmos SDK-based EVM-compatible chain. Since it is constructed atop Cosmos, it is IBC compatible, meaning it can leverage secure bridges to facilitate transactions between all IBC compatible chains. At the same time, it also offers EVM compatibility, thus allowing dApps on its network to leverage both EVM-based and Cosmos-based assets, addressing users’ needs across all EVM chains and Cosmos chains.

Since its mainnet launch, Cronos has already established connections (bridges) to Terra, Cosmos, and, where users can send & receive LUNA, ATOM, and CRO to & from those chains, respectively, via IBC bridging. In the coming days, Cronos aims to expand IBC connections to more IBC-enabled chains across the Cosmos ecosystem, allowing more Cosmos-native assets to be interoperable between EVM and IBC-powered chains. 

With Ethereum still dominating the DeFi, NFT, and GameFi ecosystems, Cronos will enable the free flow of ERC-20 tokens between Ethereum and other EVM-compatible tokens to the Cosmos and other IBC-compatible ecosystems. This development will simultaneously empower dApps to scale and expand their scope and benefits across multiple chains. Additionally, Cronos will also enable IBC-compatible tokens to be sent to Ethereum and other EVM compatible platforms – building a genuinely interconnected multi-chain ecosystem of standalone blockchain networks.

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