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Butalik Viterin
@cypherpunk1
How Is Blockchain Interoperability Achieved? Most existing Layer-1 blockchains lack built-in features that support cross-chain interoperability. However, there are a variety of tools today that are increasing the level of interoperability between blockchain networks: Sidechains: A type of Layer-2 platform, sidechains are separate blockchain networks that are compatible with a single mainchain. Each sidechain has its own consensus mechanism, security parameters, and tokens. These sidechains generally have their own specific use cases that are distributed accordingly in order to improve the overall ecosystem’s processing efficiency and self-sovereignty. Several major crypto projects such as Polkadot and Cosmos were designed from the ground up to be comprehensive cross-chain infrastructure solutions, with the ultimate goal being to establish an interoperable “network of networks.” CONTINUED BELOW
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Butalik Viterin
@cypherpunk1
Oracles: Within the context of blockchain technology, oracles bridge the information gap between on-chain and off-chain environments. Decentralized oracle services like Chainlink and API3 play a crucial role in feeding off-chain data to blockchain-enabled smart contracts and contribute to blockchain interoperability by ensuring that different ecosystems are referring to a common source of truth. Bridges and swaps: Cross-chain bridges enable a digital asset owned by a party to be locked on one chain while an identical asset is “minted” on another chain and sent to an address owned by the original owner. In contrast, atomic swaps enable users to exchange tokens from different blockchain networks in a decentralized manner. Both are automatically enabled through the use of smart contracts and play a central role in facilitating seamless cross-chain value transfers.
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